Wednesday, February 16, 2011

New Sports Illustrated Column: Could Michael Jordan become Player/Coach?

Recently, Henry Abbott of True Hoop had a terrific piece looking at the on-court challenges a soon-to-be 48-year old Michael Jordan -- who is now practicing with the Charlotte Bobcats, which he owns -- would have if he sought to return to the NBA, as has some have speculated he might want to do.

In a new SI column, I write about the legal obstacles of there being an owner/coach in the NBA. Here are a couple of excerpts:

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There are a variety of reasons why a player/owner would prove problematic.

For one, Jordan would hold membership in the two groups that are negotiating a new collective bargaining agreement. While owners and players are not necessarily competitors, since they need each other for the NBA to exist, they do hold differing views about various matters that are subject to collective bargaining. Those matters include limits on player salaries, access to unrestricted free agency and distribution of league revenue. Jordan, as player/owner, would represent both players and owners, each perhaps skeptical of his loyalty and stance on issues -- would he be "labor" or "management"?

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A second concern would arise when Jordan the owner "negotiates" a contract with Jordan the player, with Jordan the owner paying Jordan the player. A negotiation between one's right and left arm normally doesn't qualify as "arms-length" bargaining. To be sure, Bobcats general manager Rod Higgins would play a key role in the Jordan-Jordan negotiation and Jordan could simplify the situation by agreeing to take the league minimum for veteran players ($1.2 million). Still, the players' association, which has a stake in seeing player salaries go up, may disfavor a player taking less than his market value.

A third concern would center on game-related decisions that might awkwardly amplify Jordan's dual role as owner/player. For instance, what happens if Bobcats coach Paul Silas doesn't play Jordan as much as Jordan believes he should play? Would it be appropriate for Jordan the owner to fire the coach? Or how about if Jordan's teammates don't pass him the ball enough -- would those players soon find themselves on the bench or on other teams?

A fourth concern would relate to precedent: If the NBA allows Jordan to be owner/player, would that set the table for other super rich players, such as LeBron James or Kobe Bryant, to buy equity stakes in their teams? . . .

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The NBA and players' association have contemplated these concerns and include in the current CBA language that would generally prevent an owner from being a player and vice versa. Under Article XXIX, Section 8, "no NBA player may acquire or hold a direct or indirect interest in the ownership of any NBA team." However, the clause allows a player to own shares in any publicly traded company that directly or indirectly owns an NBA team. As a result, for Jordan to own and play for the Bobcats, he would have to convert his ownership interest to that of owning a publicly traded company that owns the Bobcats. While that type of transaction is possible, it is also complicated and would require, among other steps, registration with the Securities and Exchange Commission, an initial public offering and NBA approval of the Bobcats' new ownership structure.

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To read the rest, click here.