Crisis: NBA Teams To Suspend Operations Soon?

BALL DON’T LIE published these photos from last night’s game between the much-improved Hawks and moribund Memphis at Philips Arena in Atlanta:

Atlanta Memphis play in front of friends and relatives

We’re all aware that the Hawks have never drawn well, but an attendance shortfall like last night is still appalling. And those terrible turnouts are being mirrored all over the NBA in markets like Memphis, Charlotte and even former attendance stalwart Sacramento.

It’s bad. Really bad. Worse than ever before. And with 40% of America’s net worth having vanished overnight, the NBA is in for more hard times in 2009.  Yet, David Stern still claims the league’s attendance figures really aren’t all that bad. (Yeahright.)

It’s so bad that I think the NBA may soon resemble the automotive industry’s Big Three.

How so?

With the collapsed credit market, you wonder if some of the league’s more underfunded owners will be able to make payroll going forward - with the possible inability to secure additional lines of credit. Not to mention the prospect of bleeding tens of millions of dollars in the short term.

With that in mind, I think we may see a NBA team or two suspend operations in the next year or so.  Or the league take over those teams. And perhaps an existing team moving to Kansas City’s new Sprint Center (Hello New Orleans!)

What could prevent that sort of catastrophe? Cutting expenses. Lots of them.

We saw the Bobcats start the trend by laying off virtually its entire sales and marketing staff earlier this year. Owner Bob Johnson was criticized by the his peers at the time, but now that doesn’t look like such a bad move after all, and we may see some other clubs soon follow suit.

But really the only way for all NBA teams to survive in the near term in their present state, in my opinion, is to scale back salary expenditures. And that would mean concessions from the NBA’s Players Union.

Will that happen without the threat of the league contracting teams? Hell no. But if the union knows jobs will be lost if they don’t allow salary scale backs, than we may well see it happen. Sooner than later.

Hence, the comparison to the Big Three, as it’s pretty clear that the UAW is at the heart of why the automakers are in financial crisis. Without even more concessions from the union, you wonder if the car biz will be viable in the U.S. going forward. Probably not, and it doesn’t look like the government is in the mood to help.

Next up: Michael Heisley and George Shinn climb Capitol Hill?