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Kobe Bryant's Early Termination Option: The $135 Million Elephant in the Room

First Things First:

Second Things Second- Central Tenets of My Belief System That Frame Points to Come:

  1. All the individuals to be discussed below are, relative to you (I presume) and me (this I can MoneyElephant confirm), rich.  They will, no matter what happens this summer, remain so.  Or ought to, at least.  This is not a crass, "pity the poor school teacher, fireman, and blogger" bit of pseudo-moralistic twaddle (yes, I said twaddle).  Just a statement of fact.
  2. The higher the dollar amounts involved, the more I consider "sacrifice" to be relative.  Take 15% from my paycheck, and it's going to hurt.  Take 15% from a guy making $5 mil, and it hurts less.  Take it from a guy making $25 million, and it becomes closer to a rounding error.  Not that the money doesn't matter or have real value- it most certainly does- just that the blow is softened by what's left over.
  3. Do not compare NBA contract negotiations with with "real world" scenarios of how you and I would respond to similar questions in the workplace.  They just don't apply. 
  4. Owners are entitled to make a profit, and a healthy one at that.  They also have a responsibility to deliver a winning product whenever possible, particularly when a franchise has the means (i.e. they make money) and place a burden on their fans (i.e. game costs approximately 60% higher than league average, inflated a great deal by tickets that are, generally speaking, really freakin' expensive). They are obligated to spend, rather than pocket, all that booty.
  5. Owners are also entitled to set a ceiling to the payroll.  For profitable teams with a history of winning, say... the Lakers, it should be appropriately high.    
  6. Basketball players have a limited window to earn gobs of money from the game, and can't necessarily be vilified for taking full advantage, but as the dollar amounts grow the more other considerations (happiness, family connections, winning) ought have room to enter the equation.  Money doesn't buy happiness, but it buys a whole lot of stuff, including flexibility and options.

(By now, you can probably guess where this is going...)

Other stuff important to establish/clear up before proceeding: 

  • Kobe Bryant is silly awesome at basketball, isn't going to slack off no matter how much money he makes, is as good a bet as anyone to keep his aforementioned awesomeness into his 30's, and has given a great deal to the Lakers organization.
  • The Lakers, in turn, have given much to Kobe, from the $127 million in salary over the course of his career to loyalty during difficult times, and a strong commitment to winning.  
  • I believe this is what's defined as a symbiotic relationship.  
  • Sometimes, everyone has to give a little. 

How's that for a preamble? 

Nothing, with the exception of Phil Jackson deciding to hang it up, will dominate the consciousness of those who inhabit Planet Lakers this summer more than money.  Money to bring back free agents Kobe Bryant with the Larry O'Brien and Bill Russell MVP Trophy Trevor Ariza, Lamar Odom, and Shannon Brown, money to sign Kobe to an extension should he decide to opt out of his current deal and lock into something a little more long term.

Throughout the season, we've heard Odom and Ariza talk about how they'd like to stay, and Kobe has confirmed he's not going anywhere. That's not a surprise.  (Where exactly would he go?)

What we're still waiting on is word about whether Kobe will start next season on his current deal or with a fresh piece of contractual parchment in his file cabinet.  The answer could play a major role in how the Lakers are constructed over the next few seasons. (Note: Kobe has an early termination option for next season that he must exercise by June 30th, and a player option next summer.  If he doesn't opt out this year, he'll almost certainly do it 12 months from now.)  And while there are all sorts of questions about how this will play out, one thing is clear:

The simplest and easiest way for Kobe Bryant to help the Lakers afford to bring back a fully competitive roster would be to opt out this season and agree to a contract for less than the max to which he's entitled. 

Last week on the blog there was a healthy mini-debate on this subject in the comments section, with readers and hosts voicing their opinions.  It's clear that a lot of Lakers fans don't think Kobe owes the Lakers any slack here, nor believe he's obligated to do anything but take the most he can get.  Others worry about this debate turning into another way to stoke the Kobe Is Selfish! fire. I get all that, and sympathize with the argument.  I don't think Kobe deserves to be vilified if at some point he demands a max deal, which, assuming he opted out this summer, would mean about $135 million over five years. 

But criticized?  Yeah. 

I have to be honest, here.  I'm struggling to get past the notion that if winning is truly the number one priority for 24, it would be foolish for him not to recognize the relationship between his salary, which could encompass over a quarter of the team's total obligations over the next few seasons, even if the Lakers push past $90 million in payroll- an incredibly high number by NBA standards in the luxury tax era- and the team's ability to keep good players around him. 

To terminate and re-up now would give the team cost certainty going forward, the sort of predictability that makes it easier to maneuver. A 10% discount would mean about $13.5 million, give or take, worth about $27 to Dr. Buss because of the dollar-for-dollar tax penalty. That would still leave Kobe with $121.5 million dollars guaranteed, or an average of $24.5 million a season over the life of (what is widely assumed to be) a five year deal.  A 15% discount, worth about $20.5 million in real dollars and $41 million in luxury tax savings to the Lakers, leaves Bryant earning nearly $115 million Kobe in Game 5over the next half decade.

These are still extraordinary amounts of money, and doesn't get into any endorsement income the guy makes.  Call me un-American, but as I mentioned earlier, the notion of real, painful sacrifice here is tough to wrap my head around.   Kobe wants Ariza, Odom, and Brown back, but has said it's management's responsibility, not his, to figure out how to keep the team together.  That's true on the literal, but not practical, level. Assuming Kobe realizes that there is a ceiling to LA's payroll, he must too realize that every dollar not spent on him can be put towards another player, whether this summer or beyond (at some point, the Lakers might need to add a piece, right?). Just looking at Thursday's draft, where the Lakers sold the 29th and 42nd picks for a combined $4.5 million, indicates the team is looking under every rock and couch cushion to fund this summer's expenditures. 

Other stars in salary cap sports have accepted less money or reworked deals to accommodate other players and keep a winning crew together. What Kobe could do is a fantastic expression of team and his desire to win, but isn't unprecedented. 

Fortunately, to opt out for less would have some advantages for Bryant, though they aren't necessarily financial.  (Could he make up some of the lost income in extra off-court activities?  Maybe, maybe not. I have no idea. He certainly shouldn't count on it.)  Beyond the massive and deserved PR pop he'd get, the biggest would be leverage.  The onus would be on the organization to continue to fill holes when they pop up, using that money to continue to field a championship quality roster (as opposed to seeding a trust fund for some random Buss nephew).  Every day, Kobe could walk into the office and ask Dr. Buss where his $40 mil is going. 

He would place the ultimate pressure on the organization to stay at a championship level while helping keep a core together with the potential to give him more jewelry in the next few seasons.  

Kobe is correct that it's not simply his responsibility to ensure the Lakers can keep some fiscal sanity.  It's not all on him.  Everyone has to give for that to happen.  From Kobe and Dr. Buss.  From Trevor and LO, both of whom are likely to get bigger offers from other teams than they will from the Lakers, meaning they'll need to leave money on the table to stay in purple and gold.  Each of the parties involved will have to come up with his personal price for a shot at more titles.  For players, the sacrifice is salary, for ownership, profits.  But Kobe's status as the BMOP (Big Man On Payroll) puts him in a different position than the rest of the squad.  It just does.

The Lakers have already shown a willingness to spend big for a competitive team, and will have to again this summer and into the next few seasons.  They can't, shouldn't, and likely won't ask Kobe to take less, but should they have to?

BK

 
Comments () | Archives (154)

The comments to this entry are closed.

"Would you ask Kobe to gamble on losing money instead of
making it next season? Then why would you ask Buss to
do so?"

That's a good point. If TA somehow regresses and LO can't play 6th man again and SB does then Buss losses out and has to pay the salary tax for quite a bit so in that way Buss would rather Kobe to opt out.

I could flip it around and say if they all regress then Kobe would have taken less money for a team that regressed and that too is a gamble for him as well for that money.

Like I said he SHOULD do it. It would give him more credit Gilbert Arenas did it to retain Antawn Jamison and it isn't a bad move. Yet again it is a gamble for him since if they don't produce like they did last year then he's stuck on a team that wasn't as strong as the year before and he can't opt out the next year.

One of the reasons why I say Kobe won't opt out this year. He can still opt out NEXT year and I don't think he wants to lose the power to opt out if things go sour or if the Lakers want to build more to Bynum. Plus this will be a better chance to chase one big contract until he really slows down.

Conclusion: Kobe Bryant doesn't opt out. He already hinted he won't and while it is good for business and will no doubt help retain all three free agents, he just prefers to have the power still to opt out and currently the situation doesn't DEMAND that he opts out.

SD32,
Ummmm...neither Phil nor Kobe are in contract negotiations buddy. Kobe has already stated that he will not opt out this year. Phil, just like Kobe, is in the last year of his contract. Phil, just like Kobe, can decide to renegotiate his contract early if he so chooses. So is Phil selfish? Does he not care about winning? Don't answer as these questions are obviously absurd, unless they're addressed to Kobe of course.

Again, Buss has every right and deserves to make as much profit as he can, and Kobe has every right to get paid market value. Both parties have performed beyond expectations. It's the people that are calling Kobe selfish for not taking a paycut who are turning the signing of Trevor and Lamar into a battle between Kobe versus Buss. All I am saying is if Kobe takes less, GREAT, if not, I'm not going to sit here and call the hardest working player who brought us 4 rings and made a positive return on investment for ownership a selfish player that does not care about winning, just as I'm not going to question Buss' desire to win if he does not match Detroit's $50 million 5 year offer to Ariza, just as I'm not going to question Phil for not volunteering to lessen his salary.

At the end of the day, if signing Lamar, Ariza and Brown will lead to being in the red, than it simply is not going to happen, but I am confident that Kupchack will do everything to make it happen. He already got $4.5 mil in cash, he has Ammo's $5 mil expiring contract, which leads to $10 mil in savings for ownership, and I am sure he is researching every other avenue possible to make it happen. After all, IT"S THEIR JOB. Kobe is being paid for alot of things, but auditing Buss's balance sheet, and ensuring maximum profit for ownership is not one of his job duties.

LAKER FAN:

"So for a ballpark figure, divide 47.9 million by 2 and add it
to 74 million. That comes out to 97.5 million."

I'm not sure I follow your figs. Why take operating revenues and divide it by 2?

I don't follow when you say "If Buss goes overboard on salary, it's not the difference between 23 million and 20 million, it's the difference between making 20 million and LOSING 20 million."

Since 2000, the Laker franchise has made at least 30 million every year, the exception being 2003 when they made 23 million.

TIA - just trying to follow along... as far as I know, operating income reflects player salaries, right? So I don't see how you can get the kind of swing you suggest, reasoning that every $1 of added salary reduces operating income by $1. Unless I am missing something...

http://www.forbes.com/lists/2008/32/nba08_Los-Angeles-Lakers_320250.html

Doug

what a bunch of meddlers!

if the team asks Kobe to help with some money to keep the team together(like maybe because a small amount 1 or 2 million is the difference in what JB feels he can pay and what Trevor or Lamar wants, or similar), then that's something for Kobe to consider. if they ASK him, it would be because of actual hardship, and then opting out and resigning for less might be worth it. many years ago, Magic was asked to do this with the promise of a percentage of team ownership and other considerations after retirement. Magic was still repayed for what he gave back, that's just good business for everybody. Magic and JB had that type of relationship.

for Kobe to just give back money when JB may well be willing to spend it makes no sense, and no one with real business sense would respect such a deal. Dr. Buss has good business sense.

it MAY be a good idea for Kobe to opt out and sign for a reduced paycheck, and it might be a good idea to opt out and sign for a time extension, and it might be a good idea to not opt out. there are a number of other scenarios and NOONE here knows more than the briefest of details. the people involved will figure it out and we, as fans, will witness it.

i hope that Kobe takes less money if that's what it takes to win 3 or 4 more championships, probably even for one more in Kobe's career, but i'm not in any way convinced that a pay cut is the deal clincher. well, it's fun to talk about the Lakers anyway....

more endorsements for kobe this year, especially with winning the championship. championships = more endorsements. he could take less. taking 10-20 million won't kill kobe

Holy crap. people get really upset when they start talking about other people's money. I haven't seen this much idiotic internet like argument since...well, i don't think on this blog, ever. Even stupid arguments about kwame vs Bynum were at least about something.

It's been a couple of years since I've taken any economic classes, but as I understand how it works, in every economic transaction, what you give up (the cost) and what you get back (the reward) should be equal in your own mind, as rewards and cost can be measured in other things than money. Leaving aside the issue of opportunity cost, we can just assume that money has some value to people, but other things can have value as well. Like time, or being able to work at a job you like, or the potential for groupies, etc.

So, the Laker fan makes the decision of how much money (cost) he is willing to pay in order to attend a game, drink a beer at a game, etc (reward). This pretty much decides the income of the team owner, not counting things like advertising revenue, tv revenue, etc. I guess income of the team owner is partially but not always tied to the quality of the team he puts out, but is probably more or less dependant on how much cost the consumerwill pay for the product.

The economic decision the owner must make is how much cost (salary, mostly) he is willing to pay for his reward (actual income from consumer, as well as non- monetary rewards like prestige, the enjoyment of owning an nba team, the steady supply of groupies, etc) This is a decision that only the team owner can make, because only the team owner can decide if his costs equal his rewards.

The decision the player has to make is whether his cost (money that he could make playing for another team, actually having to play, etc) is equal to his reward (a greater chance of winning a title, playing with a team he likes, potential for endorsements, etc). This is of course not a factor if the amount that the owner will pay is greater than the amount the player could get somewhere else. Then it's a much easier decision. But only the player can make this decision, because only the player knows how much he is willing to give up (cost) in order to get what he wants (reward)

So frankly, as near as I can tell, everybody on this whole thread is arguing about absolutely nothing, since nobody here actually has any say in the decision.

The only input we as fans have is whether or not we buy tickets or posters or car flags. And I will expect that the Lakers will continue to sell out home games with or without the small number of people who are so upset about this.

Well, thanks for letting my review my econ 101. I'm probably wrong about a lot of it, but hey, I was waiting for a program to load, so I had a few minutes to kill.

It really is all about the love, guys.

and yes, that last post was meant to sound patronizing and pedantic. Try imagining some snooty british guy reading it to you really slowly.

tiger,

I'm sorry, but your post was nothing but crazytalk.

What do we play for? RINGS!!!

Lakers Today... Lakers Tomorrow... Lakers Forever.

GO LAKERS!!!!

I think we have seen the new Dumbest player in the NBA..
Brandon Jennings made Smush Parker look like a brain Surgeon....Scott Skiles will eat him alive...

Fan of the Mamba,

I'm very surprised you're attacking BK for saying that owners deserve to make a healthy profit.

Of course they do, if they manage their business properly. That's the American way.

Just as Kobe deserves a multi-million dollar salary, so does Dr. Jerry Buss deserve to earn some annual profit on a business he has cherished and run impeccably for decades.

It's that simple.

What? Would you like to have Dr. Buss lose money? His stewardship has brought us all this joy as Lakers fans.

In the end, my key point is that EVERYONE (EVERYONE!) should compromise on some level, because something much bigger is at stake here than just money.

Everyone can make money (and WILL make money) if they still compromise, but they'll also have the opportunity to experience Greatness.

I don't know if you have ever experienced something truly Great in your life. I have. And it is far more valuable than money.

Trust me on that.

It lights your life in ways that words cannot express.

What do we play for? RINGS!!!!

Lakers Today... Lakers Tomorrow... Lakers Forever.

GO LAKERS!!!!

I think the first post on this blog hit on "let's cut Sun Yue"....yeah...$736,000 will solve the HOLE problem. Ya idiot, do the math...learn from the past, plan for today, project for the future...why are you putting the onus on Sun Yue as if he is the roadblock to the Willy Wonka bpat that has PJ, KB, LO, TA, and SB on it. LOOOOOKKKKKKKK!!!!Realize this, after the Lakers pay Kobe and the others what they deserve, Kobe deserves max, the other 2 deserve and have conceded they will take less than max, SB will probably get paid appropriately....


...tell me, why do people keep bringing up Sun Yue as chum? Sun is a player that can be someone really special, or he may not. We alredy are overpaying a few "are nots" on the team. Leave him out of contract talks and let him develop. Hopefully he will find playing time be it with next years team, or back in China, and come back and make you guys eat "chop suey" because here's the joke....I'm Chinese and it's not the first thing I look for on the menu of a Chinese restaurant. Enjoy whatever it has evolved into....

"how about another scenario: Kobe opts out, Lakers offer a less than Max deal, but with incentives, like if he scores over 25 ppg, grabs X amount of rebounds, X amount of assists, he gets bonuses..."

Nope. I'm gonna have to veto that right here and now. You can't pay Kobe like that. Have you lost your mind? I'd put out an APB on your sanity before it gets abducted for good.

Wes

Everyone is talking about Kobe taking a pay cut. What we should be hoping that don't happen is that some team will offer Lamar and Trevor so much money that they can't turn it down and the Lakers can't match and we lose both. Get real this is a business.

BK,

I finally understand that this thread is just an argument for argument's sake. It's not gonna to sway anyone's opinion one way or the other and in some instances some bloggers have used it as an opportunity to name call and disparage one another and go all negative about things that aren't even our concern. We don't own the Lakers and it's really not our business what decisions are made by the Lakers or Kobe Bryant.

Initially I didn't read the link at the beginning of the thread but when I finally did I realized that after all of the various scenarios the author discussed he got to the actual bottomline with the following:

Is it really an either/or decision between Kobe getting paid or keeping the team together? Do they really have to let either Lamar Odom or Trevor Ariza go if Kobe doesn't sacrifice?

Let's be clear -- the Lakers have never said that this is the case. They have not made any indication that they will ask Bryant to take less, or are even thinking about it along those lines.

So what do you think will actually happen?

In my opinion the Lakers, fresh off a title, will spend what it takes to retain Odom, Ariza and Brown. They will then look to shed salaries elsewhere, either before the season or at the trade deadline. Bryant will not opt out of his contract this year, but will do so next year and sign a maximum contract that lasts through the 2013-14 season.

And I agree that the Lakers will spend what it takes to retain Odom, Ariza and Brown because it's a good business decision, nothing more. As Kobe will not opt out because it's both a good personal and business decision for him and it keeps the focus where it should be, on the Lakers organization.

Like so many have tried to say, we've just won a championship and rather than continuing to celebrate our team's hard won victory, we've jumped headlong into an imagined controversy about other people's money.

I'd like to take this opportunity to thank you guys for a great blog and to say have a nice summer. Can't wait til training camp, it's gonna be fun chasing title #2.

We are the Champions, We are the Champions, no time for losers cause we are the Champions of the world!

Wooohoooooo!!!

kobe deserves all the pennies he is receiving from the lakers. unlike other players who doesnt want to lose weight or doesne perform well in the playoffs and in the game. i dont think he needs to take less for the greatness that he brings to the lakers.

Yellofever-
"for the last week and a half this topic has been tossed around and beaten to the pulp countless times. kobe has stated to the press on several occasions that HE IS CLEARLY NOT OPTING OUT. now i ask you this: why are we still on this topic?? its beyond me why anyone knowing this especially someone of BKs stature cannot drop this and bury the hatched unless they had an axe to grind??"

A) I said last week I'd be writing about it, b) "we" may have kicked around the topic (meaning people who leave comments), but that doesn't mean it was widely read. The vast majority of people who visit the blog don't leave comments, and large swaths of people don't even read them. But it hasn't been presented in any organized form, and it's not about having an axe to grind, but talking an issue that is very important during a summer where the main topic of discussion will be getting LA's free agents to return.

BK

I always get uncomfortable when talking about other people's money. It's easy to spend the other guy's money.

Dr. Buss is running a business, and it is a business where guys like him who pay a large payroll actually get taxed heavily (100% on the incremental dollars) for doing so.

Part of his business is also winning - that is the product. Dr. Buss has ALWAYS been willing to pay to win. But it isn't just paying that leads to championships. Look at the Yankees the last few years.

There is a limit to what a smart owner will do, a limit on his total payroll dollars that make sense, given his revenue streams and the uncertainty of playoff revenue. Plus he needs to worry about multi-year deals for guys who get injured or whose skills decline. So there is also a limit on what he can pay for a given player, and on the time he commits to. Expensive long term contracts for non-performing players can really tie a team up. Look at the Knicks, who ended up committed to huge salaries for players who weren't winning. Or at Shaq, who is being traded like a journeyman not because he no longer has value, but because he isn't worth what he is paid.

So Lamar Odom is really a challenge. He is aging. He is a key bench player for the Lakers, who would love to keep him. But to most other teams he is a starter, probably a #2 option on a lot of teams. So if some other team says, Lamar, we're going to pay up for you, make a starter and give you a five year deal, the Lakers propbably should not match that, and should look for other options to fill the role of big guy off the bench.

Dr. Buss has been a smart owner who has committed to winning, has won over the long haul far better than anyone else, and has seemingly still attended to the business end. If signing all the free agents doesn't fit his salary budget, that is his decision. This is not a charity he is running.

For Kobe this is his career and it is his money. He certainly earns it, relative to the other guys in the league. If he wants to maximize his earnings for his career, that is his right. If he takes a pay cut because winning is more important to him, that's great. It isn't really unselfish, it's about him winning, but I'm all for it. Kobe's choice.

I am not comfortable vilifying Kobe for getting paid or Dr. Buss for putting limits on his payroll. I'd love to see them both do what they can to put the best team on the table, but over the years I have seen very litttle that shows me Kobe and the Doc don't both care a whole lot about winning.

Jon,

Sorry that you see it as an attack on BK. It's not personal it's just business. LOL!

As I've said earlier this is an imagined controversy about other peoples money. It really is a silly argument and one that won't influence or change anything in the real world.

But it's nice to see you come to BK's defense. That 's what the blog family is all about.

Have a great summer Jon, and if you're still in Ohio when the season starts, it'll be time to start a new winning streak on the lucky barstool.

Go Lakers

>>>"So for a ballpark figure, divide 47.9 million by 2 and add it
>>>to 74 million. That comes out to 97.5 million."
>>>
>>>I'm not sure I follow your figs. Why take operating >>>revenues and divide it by 2?

"Operating revenue" is business-speak for profit.

I'll spell it out a bit more.

In 2007-08, the Lakers made made 47.9 million profit, and were
spending about 74 million in salary and luxury tax.

That was the season they made it to the finals and lost to Boston,
so it already includes additional revenues for extra playoff games
all the way to the finals. So the amount of money the Lakers
take in will likely be very close to the same next season,
assuming they make it to the finals.

So if they take in the same amount of money, and the amount
of salary they're paying out goes up, then the profit (or operating
income) goes down.

Since they're already in luxury tax for next season, then every
dollar the salaries go up is TWO dollars of decreased profit.

So for the team to break even (no profit, no loss), divide the
profit by 2 and add it to the salary+tax was paid in 2008.

Make more sense?

If all other things were equal, then given the 2008 numbers,
if Buss increases player salaries (not counting tax) by 1/2 the
amount of his profit, then his profit is 0.

Of course, it's very rough. Things could be way different.
They could play 7 game series in each round and make more
money from extra playoff games. They could go 4-4-4-4 and
make LESS from playoff games, and he could end up losing
money because the team is TOO good. He could raise ticket
prices 20% to increase the net income.

But if all things were about the same in 2009-2010 as they
were in 2007-2008, except Buss handed out 24 million in
salary to Odom-Ariza-Brown, then Buss makes no profit.

>>>kobe deserves all the pennies he is receiving from the
>>>lakers. unlike other players who doesnt want to lose
>>>weight or doesne perform well in the playoffs and in the
>>>game

Nice dig on Shaq.

But Kevin Garnett, Tim Duncan, and Magic Johnson have also
taken big pay cuts to leave more money on the table to make the
team better.

Do you think KG is over weight? Does Duncan not perform
in the playoffs? Did Magic not perform in the game?

Nobody (except maybe KL BEAST) would dispute that Kobe
is worth every penny the Lakers are paying him and more.
This isn't about what Kobe is worth.

What this is about is three-fold:

1. The league added rules in the last CBA that intentionally
penalize good teams to try to not allow dominant teams to remain dominant. It's trying to balance out the talent in the
league so that the lesser teams like Memphis and Minnesota
can stay in business and maybe even field a decent playoff
team sometimes.

The intention of the luxury tax is specifically for situations
like the Lakers are in right now. The intension is that the
Lakers would say, "Oh, we're paying too much in salary",
so they would let Lamar and Trevor go, and they would go
make other teams better (and the Lakers worse). THAT is
the intention of the Luxury tax.

---

2. Fortunately for us (Laker fans), some teams (the Lakers)
make more income than other teams (e.g. Memphis). If Memphis' salaries got up to just the edge of the luxury tax,
the team would be losing money. That is why they dumped
Pau Gasol on the Lakers - to return the team to profitability.

Because the Lakers get a lot more income, they can afford
to spend more on players (as can New York, Boston, Chicago,
and a few other teams) and still remain profitable. But there
is a limit. There is a number at which any team (including the
Lakers) becomes non profitable.

----

3. Owners of businesses do not like to lose money on their
business. For a couple of years, billionaire Mark Cuban was
willing to have Dallas lose money to acquire and hold onto
better players. But when it didn't bring him any rings after
losing money for a couple of years, he decided to rein the salary
back in to make the business profitable again.

Basically, spending until you're losing money doesn't guarantee
you a championship. And there is still a possibility that losing a
few big dollar players and gaining a couple of cheaper players
could still get you a championship. San Antonio is the key example
of this.

It is possible that the Lakers could let Lamar and Trevor and
Brown go, get less expensive players to replace them, and
still win a championship. But if they spend too much on those
three guys, then they still might not win a championship, and they
very possibly could lose money.

---------

So far, Kobe hasn't come into the equation. The above illustrates
the situation facing Jerry Buss. Is he willing to gamble on losing
money to keep the players that just won a championship together?

4. If Kobe believes that keeping Ariza and Odom and Brown
with the team will increase his odds of winning championships,
and if Kobe WANTS to win more championships, then he can
make Jerry Buss' decision easier.

If Kobe agrees to take 5 million less per year, that equates
to 5
million more that Buss can spend on other players while still
remaining profitable.

Buss is not a cheapskate, by any means. But he is a good
businessman and I guarantee you he won't pay out 100 million
in player salaries and let the team lose money. Not a chance.

-----

So there you have it. I don't think AK & BK are saying that
Buss should ASK Kobe to take less money. And if Kobe were
to opt out, I'm absolutely positive that the first contract the Lakers
offered Kobe would be a maxed out deal with any options he
wants in it.

What they're saying is, Kobe could make a decision that he
wants to make it easier for the team to remain profitable and
still keep around the players that give him the BEST chance
of winning championships.

"Initially I didn't read the link at the beginning of the thread but when I finally did I realized that after all of the various scenarios the author discussed he got to the actual bottomline with the following:"

That link was a must read before anyone critized BK. There is ALOT of vital information on that link. It's a great article!

Laker Truth

ummmm... Kobe has never said that he won't opt out. Not once. He has said that he's not going anywhere. Did you miss that?

And, really Phil's not negotiating? Wow.. Ummmm.. where did I say he was? I was answering questions about Phil making a sacrifice.

Kobe *may* opt out.. it's a business move. The biggest reason (read Larry Coon on this) is as insurance in case of a career ending injury.

And, do I think it's fair to question Kobe if he *wouldn't* work on a compromise (if all other parties are compromising) in order to keep together a championship team? Yes. Unfortunately, I believe in the spirit that Magic showed "doing whatever it takes" to get a championship team. It doesn't always work, but it shows commitment and leadership in a *different way than Kobe has to this point. And... I don't think Magic's ever sweated the lost cash...

I also think, that more than anything... it would be a good thing for *Kobe* long-term to take the cut. It would change the perception many have of him as "selfish".. and yes, I think that would translate into real dollars in endorsements and opportunities down the road. It absolutely blows a hole in anyone arguing that Kobe only cares about himself.. and if you don't understand where that could help him in the marketplace during and after his career, then I understand why you wouldn't want him to take a cut.

Once again... I would not place any burden on Kobe to make a sacrifice if others were not willing to do the same. That would be silly. But if they are.. he should too. In my opinion.

yellofever,

No one, and I mean no one, has ever suggested that anyone in the Lakers organization *ask* Kobe to take a paycut. No one.

But, as mentioned in another post... it would be great for Kobe's image... and in my opinion.. long-term financial gain.
Do you think Magic's missing the money he gave back in salary?

And, again, Kobe has *not* said he's *not* going to opt out.. .He has not. Saying he has is either a lie, or you can't read well. He has said that he's not going anywhere. There are numerous stories on this... if you don't believe me.. just go to google news and type "kobe opt out". So, yes... it's a very real option and we're approaching the window for him to do it so it's a very relevant conversation.

If other's show a willingness to sacrifice, it will only benefit Kobe to do the same. It takes a team.

Everyone is talking about Kobe taking a pay cut. What we should be hoping that don't happen is that some team will offer Lamar and Trevor so much money that they can't turn it down and the Lakers can't match and we lose both. Get real this is a business.

Posted by: the candy man | June 27, 2009 at 04:52 AM

=====================
This is very true but remember this is the NBA we are talking about. There are a lot of franchises out there that are LOSING money espcially based on poor business decisions.

They over pay for players and end up in financial straits. Now that is a reality and therefore a possibility teams may overpay for FA's.

humananomaly,

"why do people keep bringing up Sun Yue as chum?"

Because the guy can't play. He hasn't shown a single moment of potential on the NBA court. That's why. We don't need dead weight on this team and with us going into the luxury tax this year every dollar matters.

What do we play for? RINGS!!!!

Lakers Today... Lakers Tomorrow... Lakers Forever.

GO LAKERS!!!!

Fan of the Mamba,

Thanks. I hope I get out of here soon and back to the West (California ideally).

It's not as bad as I say it is. It's worse.

I have no idea how the giant egoed Shaquille O'Neal is going to handle his Cleveland experience. Even a couple Clevelanders have told me (literally, but speaking metaphorically), "He's too big for this town."

What do we play for? RINGS!!!!

Lakers Today... Lakers Tomorrow... Lakers Forever.

GO LAKERS!!!

Why do we pass this financial thing to Kobe. It is Dr. Buss' problem. He owns the team and not Kobe. Mr. Buss keeps the trophy, not Kobe. Mr. Buss get the income from the gate receipt, not Kobe........

the candy man,

If fricken Gilbert Arenas can take a pay cut, then Kobe Bryant can take a pay cut!

What? Is Kobe Bryant going to say to the world that Gilbert Arenas is more willing to personally compromise to win than he is?

So, if he's not willing to take a pay cut, then Gilbert Arenas wants to win more than Kobe Bryant? Is that the world you want to live in?

What do we play for? RINGS!!!! (Note the answer: "RINGS!!!" Not max contracts. RINGS!!!!!)

Lakers Today... Lakers Tomorrow... Lakers Forever.

GO LAKERS!!!!

JustaLakerFan,

Your response to the candy man was right on target.

What do we play for? RINGS!!!!

Lakers Today... Lakers Tomorrow... Lakers Forever.

GO LAKERS!!!!!

Jon,

When I heard that Shaq was traded to Cleveland, I couldn't wait to hear your take on it, which by the way I believe is right on the money.

If you're still stuck in the closest thing to hell on earth come Fall, I imagine you will have quite a few interesting conversations with the locals and quite a few laughs at the occassional sideshow that will be the Cleveland Cavaliers.

You're the best man, stay cool.

Maybe Buss's can give Kobe part ownership in the Lakers in lieu of salary - like a stock option program that matures certain percentage every year ? not sure if it's feasible but if Magic can be part owner then there's a possibility of working something like that out.

GerryP,

"Why do we pass this financial thing to Kobe. It is Dr. Buss' problem. He owns the team and not Kobe. Mr. Buss keeps the trophy, not Kobe. Mr. Buss get the income from the gate receipt, not Kobe........"

When I hear talk like this, I get REALLY nervous. REALLY NERVOUS. This is a perspective of ego (that agents thrive off of) that can completely screw up the situation. Your perspective is the ONLY perspective that can really screw things up.

It's not about Kobe getting the best of the deal.

It's not about Dr. Buss getting the best of the deal.

It's about everyone negotiating in good faith to work towards a mutually beneficial common goal. Like all healthy negotiations for a difficult situation, this involves:

1. A mutual commitment to compromise.

2. A mutual acceptance of sacrifice.

3. A mutual acceptance of personal responsibility.

4. A mutual expectation of respect and personal reward.

This is a win-win mentality and THAT is the only way this negotiation will work out in a positive way.

If ANYONE comes into this discussion with your "win-lose" mentality, well, everyone loses then and none moreso than Laker Nation.

What do we play for? RINGS!!!!

Lakers Today... Lakers Tomorrow... Lakers Forever.

GO LAKERS!!!!

to

"humananomaly,

"why do people keep bringing up Sun Yue as chum?"

Because the guy can't play. He hasn't shown a single moment of potential on the NBA court. That's why. We don't need dead weight on this team and with us going into the luxury tax this year every dollar matters.

What do we play for? RINGS!!!!

Lakers Today... Lakers Tomorrow... Lakers Forever.

GO LAKERS!!!!

Posted by: Jon K. | June 27, 2009 at 11:11 AM"

Hi Jon K, I know our views have crossed paths before.
1. Newble
2. Sasha for 1st 3.5 years
3. Farmar for 1 and 80/82 of his first 2 years and streaky/dangerous to this day.
4. Walton 2 out of 10 of his actions is good....this isn't baseball.
5. We waited patiently for Mihm.
6. Mbenga, usefulness is questionable.
7. Morrison, unfortuanately, his injury, what is the true status. He looked like a PJ trying to get up and down the court when he was played.
8. VansRad....misplaced his playbook, whereas Sun Yue has probably memorized his by now.

OK, maybe Sun has not shown anything in the game yet, because of injury. Maybe you have more insight into his true balling skills. Remember it takes time to adjust to the American game, and then to the NBA game. You are not giving him the time which was given to others. And aren't I right about the fact that his contract has minimal impact on the bigger problem? Hey it's saturday, let's enjoy it.
One more thing...he has the hottest girlfriend/wife of any of the Lakers.

The difference between Arenas taking a paycut and Kobe taking a paycut is that one blogs (maybe that was before the contract, but what sacred ground has ever led his team to?) for a living the last 2 years and the other one has been an integral part of 2 championship caliber teams. Kobe to da max.

The question of asking Kobe to take less, and would LO take less (which he has agreed to, but to what extent) is all due to a mis-step which Lakers management did last year - signing Andrew Bynum for a BIG extension.

We need not have given him that contract last year, instead would have waited and matched this year. We have to pay 15-16 million for him this year. If we had waited a year. This year, I am sure NO ONE would had been ready to pay Andrew 15 million. He would have been more than happy if he gets 7-8 mil per year, with the current economy.

This would have saved us AT LEAST 5-6 million per year in Andrew's contract, and the added benefits it brings in reduction of Luxury taxes.

We could have coolly given Kobe the big-contract and could have comfortably given extensions to Lamar and Ariza.

So AK/BK... I would disagree with you on who's the money-elephant in the room. Its NOT Kobe, its Bynum who is not giving 16 million worth through his game!!

humananomaly,

"Kobe to da max."

Forgive me if I'm misinterpretted what you've said, but it sounds like you're a bigger Kobe fan than you are a Lakers fan.

Kobe taking a paycut would be good for the Lakers. Kobe taking a max contract would hurt the Lakers flexibility, ability to win Championships, and future development.

Why are you so in favor of something that would limit the potential of a team you root for? I don't understand.

What do we play for? RINGS!!!!!

Lakers Today... Lakers Tomorrow... Lakers Forever.

GO LAKERS!!!!

humanomaly,

A couple more things about Sun Yue:

1. Seems like a nice guy.

2. Yes, he has a very hot girlfriend, but Vanessa Bryant is hotter (and crazier), but a player's ability to get chicks is no reason to retain a player (unless that player is Wilt Chamberlain).

3. I find it bizarre how certain bloggers seem to put so much faith in Sun Yue. He hasn't show us that he can play. He just hasn't. Yet a lot of blogger keep talking about his potential. What potential? He hasn't shown us that he can play. Period. Why do certain bloggers have so much faith in this guy? Because he seems like a nice guy and can bag hot chicks? I don't get it.

4. Remember Sun Yue's stint in D-League? He was awful. Several other players--including Joey Crawford--played circles around him. And that's in D-League.

5. We've got to get rid of Sun Yue because the $750,000 of his contract could be difference between retaining Ariza, Odom, OR Brown, or losing one of them.

It's that simple.

Sun Yue isn't going to make the difference in us winning another Championship, but Ariza, Odom OR Brown could be the difference-maker.

What do we play for? RINGS!!!!

Lakers Today... Lakers Tomorrow... Lakers Forever.

GO LAKERS!!!!

sorry Wes. i apologize for my lunacy! how about we take what i said and apply it to Lamar instead? Mitch could offer him an average of 7 mill a year, with incentives. grab 10 rpg, get an extra .5 mll. score over 15 ppg, get another .5 mil, etc.

LTLF, thanks for pointing out all of the fascinating financial aspects of the deals. i wonder if it swayed anyone in the "Kobe should Max out" camp. the idea that Kobe COULD make more money than Jerry Buss is illuminating.

and i agree with San Diego guy. i've read just about every article and have seen just about every interview of Kobe (recently). no where have i read or heard Kobe say the words, "I'm not going to opt out. There's no way in hell I'm opting out this year." or anything to that affect. he said, "I'm not going anywhere," and basically deflected all questions aimed at him involving free agency or opting out. he even answered, "I can't read," when asked about his contract status. now that is just about the biggest deflection of a question since Bill Clinton, when he said, "It depends on what the meaning of the word 'is' is."

some people wondered why we're even talking about this. well, it's summertime, and there's really not much else to talk about... except, "how are them Dodgers," i suppose.

and Jon K., i hope one of these days next season, while you're sitting on your lucky barstool, watching a Lakers game, Shaq walks into the bar, and sits next to you! (how great would that be?!)

Bk,

and in the summer of 2010 will u criticize lebron and Wade for not taking less? Will u comeout and say lebron should resign with Cleveland for less than max? If he is going 2 NYC should he take less than max and help turn NYC into an instant contender? Or are you arguing they don't want to win as bad as Kobe? Or umm they haven't promised as much?

And where did you get 10 percent from? Why not 25 percent? Does 10 come with certain tax benefits, is that y u chose it?

And what about odom and ariza, should they take 5 percent off cuz datz half and they're not team caprains or that they want to win half as much? And oh I heard Jerry buss is a great owner that really really wants to win, does that mean he takes 30 percent off his profits?

And yo wat if I told u I make 6 bucks an hour and u should take a 20 percent cut for getting to do wat u do? I mean after all my wages are so much less than yours?

And oh great objectivity yo .... u touched on all d Other aspects just as much

leonardbast,

"and Jon K., i hope one of these days next season, while you're sitting on your lucky barstool, watching a Lakers game, Shaq walks into the bar, and sits next to you! (how great would that be?!)"

That would be pretty cool and not impossible.

I live in Hudson, Ohio which is probably the nicest place in Ohio (for a city) and something of a local tourist destination. Hudson was voted "most expensive community in Ohio".

Who knows? Maybe Shaq could buy a house here. LeBron lives relatively close by in Bath, Ohio.

BUT if Shaq did come in, he'd get an earful from me! He wouldn't get an "Oh Shaq, you're the Greatest!"

He'd get, "Dude, you know you're a Laker! That's how it is! And the Lakers are going to beat the crap out of the Cavs this year!"

Immediately therafter I would be beaten with baseball bats by nearby LeBroniacs, but it would be worth it.

What do we play for? RINGS!!!!

Lakers Today... Lakers Tomorrow... Lakers Forever.

GO LAKERS!!!

As usual, LTLF is the voice of wisdom. And most everybody else is the voice of a five year old.

Well, it's been kicked around now. I'm off to the new thread.

if Kobe needs to give up 10%-15% off his money the same should be applied to luke walton sasha vuyachich and paul gasol

Taliq,

>>>And what about odom and ariza, should they take 5
>>>percent off cuz datz half and they're not team caprains or
>>>that they want to win half as much? And oh I heard Jerry
>>>buss is a great owner that really really wants to win,
>>>does that mean he takes 30 percent off his profits?

Odom has already publicly stated that he WILL take less to stay
with the Lakers. If the Lakers offer him 7 million per and Detroit
offers him 8 million per, then he will have taken a 12.5% pay
cut to help the team.

Same situation for Ariza, but this is his first big contract, so
he may go for the bigger bucks if the difference is big enough.

And as I pointed out, Buss is clearly scrimping every penny so
he can try to make a reasonable offer to both Ariza and Odom,
and maybe keep Brown as well.

By my rough math in a previous post, if Buss pays Odom,
Ariza, and Brown the low end of what they're worth, then
next season Kobe Bryant will earn more off of the Lakers
than Jerry Buss will.

Buss won't be taking 30% off his profits, he will be taking
50 to 60% off his profits. And that assumes the Lakers make the
finals. If the Lakers were to miss the playoffs, he would lose
money.

So don't be knocking Buss in this situation - he's taking a HUGE
reduction in income for the good of the team if they sign Odom
and Ariza, whether Kobe opts out or not.

At the end of the day, or more specifically at this point, at the end of Tuesday, which is the deadline for him to do so, I don't expect Kobe to opt out.

He would be in a lose/lose situation if he did otherwise.

Opt out and it becomes about how Ariza, Odom and Brown's futures as Lakers all hinge on what he does. If any of them end up signing elsewhere, it's because he's selfish and didn't want to give up enough to keep them. Obviously that wouldn't be true, but it's not a stretch to see that becoming the mantra. After all, how long did 'Kobe broke up the Lakers 3peat team and drove Shaq and Phil away' last? 5 years?

Opt out and it becomes The Summer of Kobe, good or bad, right or wrong, Sportscenter leads off their broadcast with 'Not to be upstaged by his former teammate, Kobe opts out' The articles flood the interweb from all corners. The debates about what he should do and how much he should take go global.

His best move is wait until next summer. It doesn't cost him much overall and whatever his contract ends up being will be a much smaller story as everyone scurries around talking about Lebron and Wade and Bosh and the others. The contract talks become just what they should be, which is what is Kobe worth and what will the Lakers pay, instead of having the future of the franchise hinging on that final number, and the worst that can come of it is someone saying that his contract is the reason that Fisher retired instead of signing for the vet minimum.

Kobe not opting out would be a non-story. The dude's name generates hits, but there really isn't much mileage to be had in 'Kobe staying and remaining under current contract'.

BTW, regarding other players taking pay cuts, KG took his first with the Wolves because it was a small market team that literally could not afford to sign anyone else if he took the maximum contract he could get, which was grandfathered in pre-current CBA. Duncan - small market team. Nothing close to the revenue or budget of the Lakers. KG redux - wanted the security of a long term deal before okaying the trade to Boston because he would otherwise be exposed to being traded again with no guarantees of anything, and this time without the benefit of the trade kicker that served as his pseudo-no trade clause when Minny put him on the blocks.

And then there's Magic. It was a $100,000 pay cut. A 4% reduction for 1 year in a time when contracts could be reworked and a long term deal was not directly tied to the dollar amount of the first year of that deal. It was during a long bygone era.

htp

I appreciate the perspective and you have some good points, certainly.

I would say that Kobe *not* opting out to rework his deal will be a story if the Lakers are unable to sign Ariza, Odom, and Brown. People will look at the fact that he had the option and declined to use it. Some will judge him harshly for it, others won't.

And the opt out story wouldn't last long, that deal would be wrapped up quickly. Basically Kobe says "I want this" and the Lakers say "sign here". The only negotiating involved will be what Kobe wants to take. Period. The Lakers aren't going to play games with him, he's earned whatever he wants.

Good point about Garnett's situation, and you're right it is different. He was willing to take cuts to just *try* to get a decent team around him. The perspective on Kobe is that he could help *keep* a championship team around him. I leave it to you if that makes one decision greater than the other.

And your comparison to Magic's deal is important because of the astronomically larger numbers involved in Kobe's. Even taking into inflation, Kobe's contract absolutely dwarfs what Magic was making in real dollars.. it's not even close. That makes Magic's sacrifice all the more impressive to me.

Why can't phil take a paycut if Kobe did'nt help with the on floor coaching we probably would have lost ,Phil gets ten million for sitting on his backside letting the team figure it out.He should take the paycut not Kobe. Also we are not guarranteed that Lamar will show up after he gets another contract ,i t seems that he only plays in a contract year .I say keep Ariza for sure and if Lamar goes only a handful of Laker fans will be mad.

Long Time Laker Fan,

except odom hasn't stated publicly what that figure is? for all we know he figures earning the same pay is taking a cut since his market value has gone up due to being a crucial cog in winning a championship

again y'all need to let kuptchak do his job ... i dont see a thread on how ariza needs to take a cut or odom needs to take a cut ... or a whole thread on how much indeed buss needs to be willing to give up ... so why or why is the first thread on this topic on what compromises kobe needs to make?

yea yea i know stuff has been written about ariza, odom and buss ... but those articles didn't go for the jugular with yes odom would deserve criticism? or yes buss would deserve criticism?

BK could have written the same article and headed it with it would be a nice gesture for kobe to make to the team but been fair and obective in noting his ad partner #23 who's probably the only dude in his stratosphere will be commanding a max salary without reproach next year

So please please y'all don't go saying we're being apologists and attacking BK ... dude works for latimes ... we the apologists are among those that come pay homage on here and support the great work he and his brother does ... so dont get mad at us for not appreciating his T.J. simers approach ... this is not the tone in which a fan blog host talks about the finals mvp ... I'm sorry yo, I just happen to think the dude deserves way more respect than this

And to the KBlitz of the world talking about how Kobe sucks when he misses 30 shots ... watch what happens if he should bail for say nyc (tho laker management is too smart to let that happen, despites BKs opinion they'll be more than willing to bet on kobe) and see when you'll find the next dude to come drop 81 points in this house ... y'all would be just as ridiculous if you said the same thing about king james or dwade so dont think u can go oh if kobe leaves we get lebron ...u'd need to give lebron max too

Bryant should go after every penny he is worth. If the organization can't handle the salary, they should offer him significanly less, but give him a minority stake in the team.

Does Kobe "have" to make his decision first, as in is Mitch waiting to see what happens with Kobe's negotiation first before dealing with the other three?

WOW!

50% of the posts on this blog are proof positive that parents should limit internet access for their children.

Another 25% of the posts prove high school graduation rates are falling across the country and English is no longer a required subject.

they should trade Sasha first, why would they give milllions$ to young kid( Bynum) who hasn't even developed ,show nothing worth $ he is getting pay..U.S president doesn't even make what they make with minutes they play..it's shame all the basketball players think millions$ are what they should earn . do you know how hard we , American works everyday under the pressure and not even make $100K a years. playing basketball 10minutes doesn't make a basketball player who should make Millions$..I am a dying fan of Kobe, we need Ariza to bring back, and Brown,, I love Brown energy and give him a chance.. Hope that Kobe takes less his salary to add $ to bring back Odem and Ariza

And, what about Gasol? I don't know when he is finishing his contract, but I think it could be soon. Will he be willing to take a paycut as well? I mean, if we assume that this is a team effort, and Kobe should opt out to take less money, TA and LO should sign for less than they can get elsewhere, everybody in the team MUST be in the same boat and paddle in the same direction.

And what happens if the team get insane revenues because of this? Are the players entitled to some of that because of the impact they had in the outcome?

Kobe is killing me. Greedy bum didn't opt out for less money. Where is the class that Magic, Duncan and others have shown?

I always thought he valued winning more than anything, but I guess he puts a price on that.

If we lose Odom or Ariza it is on KOBE - and without both of them we won't repeat next year.

Why Kobe has to take less money?
so that Buss can earn more money?
It is weird that people ask him to take less money for the organization. It is not like the Lakers are in any financial trouble. They made tons of money so over the salary cap is not a problem. If the Lakers are in trouble making money, yeah Kobe should take less but they are not. They are trying to make Kobe look selfish so he will take less money. Nobody points finger to the Buss family who are the richer guys.

Kobe's responsibility is to deliver winnings and trophies with the current salary he is getting from the Lakers. The Lakers management is the employer who is supposed to collect all incomes derived from the games and advertisements. Surely, Dr. Buzz and family are getting a lot of dollars and goodwill owning this remarkable team. Both Kobe and the Buzzes thrive with the partnership. Kobe should keep his salary and the Buzzes should keep their profit. The Buzzes must not and should not look on Kobe and parting away his earnings to be given to another Buzz nephew. He, he, he.

 
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