posted August 10, 2009 01:19 PM
Fiscal worlds collide
Rubio case tests limits of NBA
By Frank Dell'Apa | August 9, 2009
Spanish guard Ricky Rubio apparently wants to play in the NBA next season. The NBA wants Rubio, judging by the fact he was the No. 5 pick in the June draft. And Rubio’s club, DKV Joventut, is more than willing to let him go.
So, what’s the holdup?
For one thing, there is Rubio’s $8.55 million buyout, small change for Minnesota Timberwolves owner Glen Taylor. But there is also something stronger at work than dollars - a clause in the NBA’s collective bargaining agreement that limits teams to $500,000 for buyouts of players outside the league.
In other words, Rubio could be playing in the NBA if the Timberwolves were allowed to pay the market price. Olympiakos of Greece and Real Madrid offered Rubio $5 million contracts. Regal Barcelona came in at $3.6 million. All three clubs would have to negotiate the buyout, but Rubio would be earning enough to chip in, as well. And all are offering much more than the Timberwolves.
If the richest basketball league in the world is being outbid, something doesn’t add up. An obvious solution would be for the NBA to increase the buyout limit when the next CBA is negotiated.
If the limit were, say, $3 million, it would give the Timberwolves and Rubio a chance to work out a deal. Even if Minnesota offered less than European clubs, it could fork over a couple million and propose playing a couple exhibitions in Spain, donating profits to Rubio’s club.
Right now, the Timberwolves do not have much bargaining power, their best hope being a sponsorship deal that would pay Rubio enough so that he could buy himself out of his contract.
But the $500,000 figure is not likely to change, since this is a minor issue compared with what the owners and players were concerned with in pre-CBA talks last week. And if the spending limit is raised too high, “It could open a can of worms,’’ according to former Real Madrid player Walt Szczerbiak, father of former Celtic Wally Szczerbiak.
“The NBA wanted to protect teams, because they know how things work in Europe,’’ Szczerbiak said. “They wanted to avoid [European clubs] taking advantage of them. They didn’t want teams to be pressured into having to make a decision on paying [for a buyout] or not.’’
The root of the Rubio stalemate lies in a clash of systems:
■ NBA teams are franchised entities competing in a system that limits the number of teams and monitors resources with a player draft and spending restrictions. There are safety nets everywhere in the NBA, to prevent overspending, and the propping up of unsuccessful teams by giving them competitive advantages. European teams are clubs, their leagues heavily influenced by national federations, lack of success penalized by relegation. There are no safety nets.
■ NBA teams do not develop talent, relying on colleges to do so. European teams develop their own players, funding a series of youth teams to do so.
■ The NBA has a negotiated distribution of the wealth through its CBA. In Europe, similar agreements do not exist, and even if a continental league similar to the NBA were formed, an operation resembling a cartel could be in violation of European Union regulations.
So, in this case, there is a spending limit accepted almost without question by one league (the NBA), but viewed as a foreign concept nearly everywhere else.
“I think the cap makes sense,’’ Houston general manager Daryl Morey said. “It creates a natural sort of guideline when international teams are setting buyouts. So that is beneficial to the NBA and FIBA.
“Maybe there is a way to make it a sliding, graduated type of number, depending on the situation in Europe, or the number of years experience a player has, or something along those lines. Or, depending on where they are picked in the draft, they could be permitted a different buyout. But for the large majority, the cap works fine.’’
The NBA’s spending limit for players outside the league in 1999 was $350,000. Another $150,000 was added in 2003. Those figures are minuscule compared with what even the poorest of European soccer teams are willing to pay for talent. And the dollar has been devalued since they were instituted.
“The $500,000 might as well be zero, because it’s only equal to about 350,000 euros,’’ said Guy Zucker, an agent representing several NBA players. “If European clubs are offering $3.5 million and you are offering $500,000, you don’t have a very good chance.
“It’s an archaic law. If the foreign players sued, it wouldn’t stand up in court.’’
NBA administrators and owners have become more worldly in the last 10 years. They might still need to be protected from themselves with spending limitations, but they should have grown up enough to be able to negotiate with those sly foreign agents. And, after all, the money for talent development has to come from somewhere.
“The world doesn’t begin and end in the NBA,’’ said Szczerbiak, who is employed by the Spanish national league. “These teams work hard to be competitive and represent their cities. They have to be incorporated. They are professional teams with budgets of $14 million-$20 million. They have money and time invested in players and they are not thinking of themselves as a farm system for the NBA.’’
Joventut took a chance with Rubio, coach Aito Garcia Reneses bringing him to the first team at age 14.
“He was too good for his age group,’’ Szczerbiak said. “In the finals of the 16s, he had 51 points, 20-some rebounds, and I don’t know how many assists. His stat line was off the charts, and that was just in the final game.’’
As for the Joventut buyout clause, it is a simple matter for clubs such as Olympiakos of Greece and Real Madrid. Both offered $5 million. Then Rubio decided he did not want to leave his El Mansou home near the club in Badalona; he would, though, play for nearby Regal Barcelona, but it offered only $3.6 million. Joventut is sticking to its buyout price, partly because the club could use the money and also because of friction caused, the club says, by Rubio himself.
“Joventut won’t be low-balled,’’ Szczerbiak said. “They’re upset because, since the draft, they say [Rubio] has acted in a selfish manner.
“He had a contractual obligation. But now he seems to be saying, ‘What’s in it for me?’ and the president of the club is saying, ‘What’s in it for the club?’ The president is saying they will keep him but he won’t play, and his salary is low enough that they can do it. But it could be a ploy.’’
Indeed, both sides are posturing. Joventut apparently does need the money, but it might have to settle for less than $8.55 million. But Rubio would be taking a major risk buying out his own contract because he would not earn enough in guarantees from the Timberwolves as the No. 5 pick. Had he been drafted in the top three, the guarantees would have been sufficient.
“When he signed the contract, his parents and lawyers were there, and they were happy with the buyout clause,’’ Szczerbiak said. “The club loved him and he planned to stay there until he was 20.’’
But a lot happened in the last two years, and Rubio is now ready for the NBA. Unfortunately, the NBA might not be ready for Rubio.