Case Study - A Power Play For Howard

David Stern - Case Study - A Power Play For Howard

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As a sophomore while the 1995-96 Nba season, Juwan Howard posted superstar-like numbers for the Washington Bullets. The fifth pick in the 1994 Nba Rookie Draft was immediately courted by many teams as he was about to be a free agent in the 1996-1997 season.

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Although publicly stating he wanted to stay with the Bullets, Howard and his agent, David Falk, were not attracted to the team's seven years million offer. Howard felt that his shop value was far more than that. Then Miami Heat offered a 7-year/M contract. The Bullets pushed their offer to M, but stopped short of matching the Heat's offer.

On July 15, 1996, Howard signed a 1 million ageement with the Miami Heat. However, this ageement was voided by the Nba citing that the Heat exceeded its wage cap. On August 5, 1996 Howard returned to the folds of the Bullets after signing a seven-year ageement worth 5 million. The Heat went to court to challenge the Nba's ruling.

Assumptions

The Nba indicated that the Heat violated its wage cap and only used this as basis to void its ageement with Howard. However, wage cap violations come with literal, penalties - million penalty to the team and a season long suspension for Heat Coach Pat Riley. The Nba maintained that the Heat already had an agreement with town Alonzo Mourning before signing Howard and, that the bonuses of two other players were not counted against the cap when they should have been.

Vantage points

1. Impose the million penalty against the Heat and season suspension for Coach Riley.

2. Give concessions to Miami for it to stay competing in the league while the season.

3. Leave the case to courts to determine the matter.

Diagnosis

Impose Sanctions against the Heat

For the Nba to pursue its allegations of wage cap violations against the Bullets it would have to seek imposition of the million penalty against the Team and a season long suspension of Coach Pat Riley.

The league maintained it had evidence that the Heat had an agreement with its town Alonzo Mourning prior to signing Howard - a violation of wage cap rules. The league also maintained that that the bonuses in the contracts of Tim Hardaway and Pj Brown were not tallied the cap by Miami, and that those bonuses should have been included. These allegations, as expected, were denied by the Heat camp.

Voiding Howard's ageement with the Heat and imposing severe penalties on the team may have been the right thing to do, but many things would have to be given consideration - the Heat can contest the matter in court and the league could face a backlash from Miami fans and other fans of the league who might view this performance as too much on the part of the Nba. Remember, the Heat took pains to prepare for drawing Howard to Miami unloading several of its high value players to make room for Howard. Now left with a shallow roster of talents, Miami will be facing an uphill challenge to stay competing and say its base of loyal fans in shop rich Miami.

If the Heat decides to slug it out in court, as would be imaginable if the matter reaches arbitration, the players union and the team owners would be arrival into the picture as the union was supporting Howard and the Heat was getting pity from some team owners. In that situation, a lock-out scenario could be safe bet and it's one scenario that the Nba - from Howard Stern down to the last man in a team's staff - dreads.

Give Concessions to Miami

The Nba can opt not to pursue sanctions against the Heat as a concession. At the same time the league should recognize the Heat's disadvantages- if losing Howard is not enough, losing key players just to make wage room for Howard has given a serious dearth in team competitiveness. The league should stay away from giving impressions that it favors safe bet teams.

Coach Riley had suggested that the Bullets' first round pick should have been given to the Heat. Giving Miami concessions would allow it to stay competing and say their fan base.

The Nba decided that that Washington can keep the players it had signed up after renouncing Howard - Tracy Murray and Lorenzo Williams, Rod Strickland and Harvey Grant. These are high caliber players that Washington could not have been able to sign up if their first deal with Howard pushed through in the first place. Sure the Bullets forfeit their next year's first-round draft selection for the right to re-sign Howard still they got a huge concession in this case.

The league can also wish the Bullets to publish one or both of their free agent signings (Tracy Murray and Lorenzo Williams) and pay the distinction in the middle of the final offer for any player cut and the deal they signed with the Bullets.

In the whole picture, Washington became a grand team by a stroke of circumstances. And the Heat just had to start from scratch, again.

Leave the case to courts to determine the matter

The Heat had gone to Florida state court and was granted a temporary injunction. Agreeing to the Heat, the judge's order stated that Howard could not sign with someone else team, and that the league could not approve Howard's ageement with the Bullets, unless the ageement recognized the prior validity and superiority of Miami's contract. If the Heat won the case it would have been disastrous for the league as its powers to inspect and approve player contracts will be put to question. Team owners can result suit and bend the wage cap rules then bring the matter to court and have a reference case to peg against.

On the other hand, if the league wins the case and Miami gets sanctioned, the Heat would claim that David Stern succumbed to pressure by the Bullets and, more importantly, by the players' union -an idea that would not sit well with a lot of team owners.

Prescription

The Nba is thriving because it thrives on balanced competition. And one way that ensures that balance is the implementation of a wage cap. If not for the cap the richer teams will raid the players' roster with abandon. Fans like to see wholesome competition; they don't pay to see their team to get trashed by other teams with deeper resources. I would say Impose the sanctions on Miami. The spiraling salaries of players need to be put in check. Otherwise, what's a wage cap for? ultimately it is the fans who pay for the spectacle that is the Nba. And they will pay more if the league loses sight of this basic premise.

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