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Chris Paul, David Stern, & Collusion

First post on SS&R.

On the topic of Stern's recent veto-ing of Lakers and Clippers proposals for Chris Paul...

There's a reason why (I assume, and I'm sure you can agree with me on this) the NBA doesn't allow owners to own more than one team, and that's because of collusion - there's a definite conflict of interest if Jerry Buss owned both the Kings and the Lakers and decided to swap players for ridiculous deals between them to establish a powerhouse for one, for example.

Yes, the 29 owners own the New Orleans Hornets and theoretically, they should have a right in what the Hornets trades should be. However, based on antitrust policy and collusion laws in the USA (which are standard for almost every industry and every business in the USA), it is highly illegal for owners to have an invested interest in multiple businesses in the same industry - aka Dan Gilbert in Cavs and Hornets. Hence, the NBA shouldn't have bought the Hornets in the first place, and Phil Jackson actually predicted this dilemma when it happened that Chris Paul would be a huge issue in terms of avoiding conflict of interest.

Yet, the NBA already bought the Hornets for economic reasons and it's spilled milk - that's not the issue of my argument. Given the circumstances, however, the NBA should have done all they could to ensure that the Hornets were run from an owner's standpoint.

There's two types of owners in the NBA: basketball owners and economic owners. Basketball owners: Mick Arison, Jerry Buss, Mark Cuban - owners that want their teams to win and are willing to spend accordingly. That's the best type of owner for the NBA. However, there's also economic owners, like Donald Sterling is for the Clippers. They just want to make money off their teams, and that's fine - basketball franchises are businesses, after all.

However, this is where the actions of David Stern - assuming that he was acting in the best interests of the Hornets as an economic or basketball owner - violated any degree of disinterest and non-conflict of interest. From a basketball standpoint, what Stern did completely violated the intentions of any basketball owner - the trade was good for New Orleans Hornets and even if you argue that it wasn't, it's at least on par with anything else the Hornets could have gotten and definitely better than the deal the Hornets would've gotten with Chris Paul walking in free agency (read: collapse of the Hornets franchise with several years in the shitters of the NBA). No matter what, Stern screwed the Hornets' chances of improving their chances at the title (even if they were pretty slim, but it is the goal of every 'basketball' owner in the NBA). Even if you say the Lakers' deal wasn't a good one, Stern similarly rejected the Clippers, so it's illogical to argue that Stern's intervention was for the betterment of the Hornets.

From an economic owner's standpoint, Stern's actions don't make any sense either. Letting Chris Paul go was not a bad economic move: they got Lamar Odom with a great contract and had enough room under their cap space to accommodate the likes of Scola, Martin, and Dragic, with the departure of Chris Paul (and I think likely, Okafor as well). The maintained basketball revenues (I'm assuming that they would have stayed in a similar basketball-competitiveness situation) are far better than the loss in basketball revenues from not making the playoffs a year later when Chris Paul departs in free agency. Add that to the fact that basketball is a competitive business, where owners do compete to a certain measure with each other for revenue in terms of advertising, fans, marketing, products, and more. Chris Paul walking in 2012 certainly would have decreased 'basketball-related income' with drops in shirt sales, with no franchise star or even modest stars bringing in any money. In fact, Stern helps other franchises because he diverts much of the money that Hornets would have brought in to other teams instead.

Hence, Stern's decision was purely made on improving the competitiveness of the NBA and preventing the possibility of teams like the Lakers from dominating the championships for the next five years. This is a decision that was influenced by other owners in the NBA and had nothing to do with ownership of the New Orleans Hornets in either a basketball or economic ownership sense. I'm not even going into how this affects the Houston Rockets, who also would have benefited from this deal greatly (Gasol + Nene possibly soon to follow). This was a gross manipulation of a team that Stern had direct control of, at a time where the players union was hopeless to protest the decision in the immediate aftermath of ratifying the new CBA. Stern's decision had nothing to do with the Hornets and had everything to do with benefiting other select teams in the NBA - in other words, collusion.

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