Buyers or Sellers?
January 21, 2009 -
Fact: More millionaires are made during a recession than at any other time. Why? Because resources (stocks, real estate, materials, labor, etc.) are typically available at discounted prices, and those willing to take calculated risks have the potential to reap significant rewards.
Now replace “millionaire” with “title contender,” and let’s talk about the NBA. The weak economy has put a number of teams into a difficult financial position, so much so that premium talent is available at a discount. Other teams with deeper pockets are clearly looking to take advantage of the potential fire sales offered by their cash-strapped counterparts.
The Utah Jazz are at a major crossroads right now. The young team with a promising future that reached the Western Conference Finals in 2007 has actually regressed each season since. Greg Miller and the rest of the front office must decide whether they are gong to be buyers or seller in this market.
The Maynor/Harpring “trade” was a strong indication the Jazz are looking to sell. They gave up a promising young player for nothing more than financial relief. Considering how far above the luxury tax line the Jazz were, it’s easy to understand why management felt this was a necessary move. To a fan, however, it sends the message that winning is not the top priority. And fans are the ones who buy the tickets, memorabilia, etc that generate revenue. Alienate the fans, and you lose money.
The NBA is a business. I get that. But as with any business, focusing on short-term cost cutting can end up hurting your long-term profit potential. Conversely, absorbing some short-term risk/pain can pay huge dividends down the road. If you stop investing in the future of your business, the competition will eat you alive. The best thing the Jazz can do right now from both a basketball and a financial perspective is to buy aggressively.
The Jazz have an impressive collection of tradable assets in the form of all-star talent, expiring contracts, young players with upside, and even an unprotected 1st-round pick (likely to be in the top 10). They also have a number of roster defects they need to address. Only the most optimistic fan could believe that this team as currently constituted will ever win a title. One or two aggressive deals, however, could position Utah as a championship contender for at least the next three years.
A winning team is good for the bottom line.
Perhaps most importantly, the Jazz may be able to convince a certain Olympic point guard they are committed to winning so he doesn’t skip town three years from now. In case you're reading, Greg, his departure would be extraordinarily bad for the bottom line.
(P.S. I’m still working on my list of potential trades, but I’ve already come up with numerous “realistic” deals that would make the Jazz better.)