Posted: Friday December 9, 2011 12:37AM ; Updated: Friday December 9, 2011 1:51AM
Ian Thomsen
Ian Thomsen>INSIDE THE NBA

Nixed Paul trade shows trouble with NBA owning Hornets

Story Highlights

The NBA owns the Hornets, meaning it's the shared property of 29 rival owners

Those owners balked at sending Paul to the Lakers as part of a three-team deal

The trade was an attempt to avoid the problems faced by Cleveland and Denver

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Chris Paul will remain with the Hornets after Thursday's proposed three-way trade with the Lakers and Rockets was called off.
Chris Paul will remain with the Hornets after Thursday's proposed three-way trade with the Lakers and Rockets was called off.
Mark J. Terrill/AP

More than they need Chris Paul, the New Orleans Hornets need new owners.

The Hornets are owned by the NBA, which took the team off the hands of previous owner George Shinn one year ago when he couldn't find a buyer. That means the Hornets are the shared property of 29 rival NBA owners, who, in conversations that have nothing to do with New Orleans, have been unable to find agreement among themselves on all kinds of issues involving each other's money.

The 29 owners of the Hornets spent the last two years arguing over whether the NBA should be ruled by a hard salary cap or a soft cap, and whether the Lakers, Knicks and other rich franchises should be sharing a larger portion of their locally-generated revenue with teams that earn far less money.

On Thursday, the Lakers struck a complicated deal to acquire Paul from New Orleans. That deal was a well-conceived attempt by the Hornets to make the best of Paul's imminent departure, but it was quashed by the Hornets' ownership and commissioner David Stern. The three-team trade that would have sent Paul to the Lakers while providing New Orleans with Lamar Odom, Luis Scola, Kevin Martin and Goran Dragic -- four potential starters in all, plus a 2012 first-round pick -- was canceled by the NBA on behalf of owners who would have disagreed with the trade in principle and/or would not have wanted to see the rich Lakers get richer at their expense.

The initial response by the league is understandable. It follows years of simmering arguments that were not cooled by the new collective bargaining agreement, which five owners refused to ratify on the same day the Hornets' trade was canceled. Bad feelings remain about the outcome of the lockout negotiations, because it maintained a soft cap that won't prevent the Lakers from outspending the rest of the league, even after a more punitive luxury tax takes effect in two years.

But what did these owners expect? They were asking for expanded revenue sharing from the Lakers at the same time as they were demanding the Lakers relinquish their competitive advantage by submitting to a hard cap. Why should the Lakers cut themselves on both ends?

So consider the environment in which this decision about the trade of Chris Paul was made Thursday. Already, some of the owners were not happy the new CBA may enable the Lakers to flourish as before. Then comes word that the Lakers have essentially launched a new championship era by cashing out 32-year-old Odom and 31-year-old Gasol in exchange for Paul, an MVP-capable point guard who, at 26, is approaching his best years.

One thought surely was to prevent the Lakers from plundering the league-owned Hornets.

Another thought had to involve Paul, and how he shouldn't be able to dictate a move to a team of his choice while he was under contract to the league as a whole.

But I wonder how much time was spent thinking about the Hornets.

The NBA has a tremendous caretaker in Hornets GM Dell Demps, who as a rookie last season quickly overhauled the entire basketball operation in order to put the Hornets back into the playoffs and thereby protect the NBA's investment. When Paul recently insisted he would not remain with New Orleans for the long term, Demps referred back to the painful 2010 experiences of two small-market teams -- the Cavaliers, who plummeted in value after LeBron James moved to South Beach for virtually nothing in return; and the Nuggets, who endured a half-year of tortuous public speculation before fulfilling Carmelo Anthony's wish of a trade to the Knicks.

More constructively, the Hornets also saw how the Utah Jazz dealt with the potential departure of point guard Deron Williams last February: They made a bold, preemptive trade that sent him to the Nets for Derrick Favors, Devin Harris, a pick that has turned into highly attractive center Enes Kanter, with another first-rounder to come next summer.

One rival league executive texted me recently that Jazz GM Kevin O'Connor deserved consideration for executive of the year for his trade of Williams: "Beat extension rules, got a tremendous package and made clear that the franchise is the most important thing."

The O'Connor precedent suggests that small-market franchises need not be bullied. By dictating the terms preemptively in New Orleans, Demps was demanding talent in return while sparing Hornets fans the humiliation of being at the mercy of Paul's imminent departure as a free agent next summer.

That's why the Hornets wanted to deal Paul for four potential starters. By recognizing they weren't likely to sign free agents, especially while they wait to be sold by the NBA to a private buyer, the Hornets used their cap space to turn Paul's $16.4 million salary into $31.1 million in credible talent.

The acquisitions of Lamar Odom from the Lakers and Luis Scola from the Rockets would have absolved New Orleans from re-signing free agent David West. Newcomer Goran Dragic would have joined incumbent Jarrett Jack to fill in for Paul at the point, and 6-foot-7 shooting guard Kevin Martin averaged 23.5 points for the Rockets in 80 games last season. That core would have been supplemented by starting small forward Trevor Ariza, backup guard Willie Green and center Emeka Okafor, whose large salary could be put out to amnesty (likely after the team is sold) to provide the Hornets with potential cap space next summer.

The bottom-line goal of this trade was to protect the investment of the 29 NBA owners in the Hornets.

I wonder if these owners understand that the Hornets are now one of the best-managed franchises in the NBA. Over the last year they've engaged in a highly-personalized campaign to reach out to current and potential season-ticket holders in what should have been a hopeless situation. In the aftermath of a devastating hurricane and oil spill, in the midst of a recession and a lockout, and in spite of the unsettled ownership and highly-publicized rumors that both Paul and the franchise would be moving to other cities, the Hornets dramatically increased their sale of season tickets over the recent year. Those sales have surpassed 10,000, a remarkable achievement that has further inspired the pursuit of an improved lease and a sale to a buyer who will keep the franchise in New Orleans.

During this perfect storm of merging crises, the Hornets have established new standards for bonding with their customers under Jac Sperling, the NBA-appointed franchise chairman, team president Hugh Weber and Stern himself. They have created a new playbook for marketing success that undoubtedly will be copied by other franchises. Given the dubious circumstances by which the NBA took control of the franchise 12 months ago, the turnaround of the Hornets is nothing less than an enormous triumph for the league.

Has that triumph now been undermined?

This is a difficult set of circumstances that created a choice of lousy options with no happy outcome. By enabling the trade to the Lakers, many owners -- along with many Hornets fans who wouldn't want to deal Paul under any circumstances, and especially to Los Angeles -- would have been infuriated.

By disabling the trade, however, what are the prospects for the Hornets now? Demps and the Hornets were making the best of a bad situation and hoping to remain competitive following their proposed trade of Paul, much as the Nuggets competed successfully after their trade of Anthony. Now, instead, they face the possibility of playing out this season with a star that is certain to leave at the end of the year. And when he goes, he may sign outright with the Knicks, another big-market team, which will leave the Hornets with nothing in return.

Weren't many of the owners hoping the new CBA would prevent the kind of fiasco that was suffered by Cleveland when James left? They may have consigned the Hornets, a team they themselves own, to the same sorry fate. And they may have damaged their own investment along the way.

They need to find a new owner for the Hornets. Quickly.

 
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