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Would you be saying that if the Hawks had gotten the fourth pick instead of the third? I have to question the motives of a Suns fan that brings up such a discussion so soon after his team came out on the short end.
The NBA Draft Lottery seems intended to ensure the even distribution of talent among the 30 NBA franchises. Along with the luxury tax and salary caps, the NBA strives to ensure that tickets are reasonably priced.
Just as government controls on prices of everyday goods and services such as apartment rent or the minimum wage cause problems in the supply, demand or quality of such, are we seeing the ill effects of a centrally-controlled market in the NBA? What are your thoughts regarding a more "laissez faire" approach to the distribution of rookie talent, salary caps and the luxury tax threshhold?
Would you be saying that if the Hawks had gotten the fourth pick instead of the third? I have to question the motives of a Suns fan that brings up such a discussion so soon after his team came out on the short end.
Not talking as a Suns fan, more of a free-market advocate. Free markets are supposed to benefit everybody involved.
Are you nostalgic for the Gilded Age or something? Are you a Rockefeller?
I really hate to take this thread seriously, because the premise is so stupid, but with regard to "free markets," since the barriers to entry for an NBA franchise are so high, laissez-faire capitalism would not work. The equilibrium would be a small number of franchises in large media markets, with higher revenues, paying elevated salaries to a small number of elite players.
If the league wants 30 viable teams, including many in smaller markets, it has to set up economic rules that limit the ability of high-revenue franchises to drive them out of business.
I do enjoy the "If you like the Spurs, you're a socialist" idea, though. Suns fans are showing some creativity in their whining.
Or is it "The Spurs are winning because of the NBA's un-American practices?"
Can you delineate the nature of your whine, LavaLamp?
the Spurs hate America now.
Spurs fans of the world unite!
Actually, this is not a creative whine. I intended it to be a discussion of how free market ideas would apply to the NBA since I have a personal interest in free market ideas in economics, politics and sports.
I am sorry if you took it to imply the idea that "If you like the Spurs, you're a socialist"Not my intent at all. I just want a discussion with knowledgeable basketball fans who appreciate economics.
However, you did articulate one possible outcome of free markets, not saying that it is what would actually happen though: That small markets will not be able to afford a good basketball team.
Do you see that same thing happen with the distribution of talent and quality of play in college basketball?
This is such a funny turn of the discussion that I just have to laugh a little. Thanks man.
Actually, I like the Spurs. They are an excellent organization and basketball team. That is independent of the fact that I am a Suns fan, and hopefully a good citizen of Spurstalk.
It doesn't happen as much in college basketball, because the barriers to entry are much lower.Actually, this is not a creative whine. I intended it to be a discussion of how free market ideas would apply to the NBA since I have a personal interest in free markets ideas in economics, politics and sports.
I am sorry if you took it to imply the idea that "If you like the Spurs, you're a socialist"
However, you did articulate one possible outcome of free markets, not saying that it is what would actually happen though: That small markets will not be able to afford a good basketball team.
Do you see that same thing happen with the distribution of talent and quality of play in college basketball?
Who cares? Stern is a dictator.
I want to challenge this idea. Don't you think that small-market franchises, in a free market environment, can still attract the top talent?
If he is, it is only because he is at the head of a multi-billion dollar organization that we fund and patronize.
Are we happy with what this organization has become? Maybe I should restate that... Can we imagine an organization that would be better for the sport we love, and athletes and coaches we admire?
No, because they don't have access to the same revenue streams.
First of all, there are only so many seats one can have at a basketball arena before the value of the seats is worth less than the additional cost of a larger facility. So supply is inherently limited. In a larger market, there are more potential fans, i.e. demand, chasing the same number of seats (roughly), which would tend to command higher prices.
Secondly, another major source of revenue is local broadcast media rights. The value of media rights is determined by the ad revenue that can be generated from viewership. The ad revenue is determined by the size of the audience. A larger market is inherently capable of drawing a larger audience, making the media rights of the team more valuable.
Thus, teams in larger markets have an inherent advantage in revenue, which would allow them to spend more for labor. This gives them a compe ive advantage in attracting top talent, since they can simply outbid small-market teams.
Since talent correlates to winning, and since fans are more likely to attend or watch the games of a local team that is winning, the compe ive advantage of the large-market team is compounded over time. Its ability to generate revenue increases, while the ability of the small-market team to generate revenue decreases.
Eventually, unsuccessful teams in smaller markets would not be able to generate enough revenue to cover the costs of doing business, and either would relocate to a market where the revenue situation might be better, of if that is not possible, would simply fold.
In a truly free market, pro sports would be illegal.
What do you mean? Can you give an example or as close to it as possible (since there is rarely a truly free market accroding to most)?
Well articulated Extra Stout.
Here are my counter-arguments:
1. Talented players do not always make their decisions based only on $$$. They have to also consider whether a team's philosophy and style of play suits their particular strengths. In addition, they have to consider if they would be happy living and raising a family where they work. So, the large markets with a better revenue stream does not always get the top talent. The point here is that if players had the freedom to choose, rather than being tradeable property of the franchise, we might have higher satisfaction and better quality of play among all players overall.
2. We recognize that the size of a market is really what determines the revenue stream of a franchise. A city with a smaller population can actually be a larger market and revenue stream if that city has fans that spend more on their team per capita or if that franchise has fewer compe ors from teams in other sports within the city. Also, a franchise's revenue stream is not limited to ticket sales to locals and broadcast rights. To use the Spurs as an example, their fanbase goes beyond the borders of San Antonio. All these fans spend on Spurs merchandise, tune-in to broadcasts, and give their "eyeballs" to Spurs related-news. The point here is that an exciting, talented team is no longer limited in its revenue base to the population of the city it happens to reside in.
Younger players almost always go for the money. There are very few exceptions.1. Talented players do not always make their decisions based only on $$$. They have to also consider whether a team's philosophy and style of play suits their particular strengths. In addition, they have to consider if they would be happy living and raising a family where they work. So, the large markets with a better revenue stream does not always get the top talent. The point here is that if players had the freedom to choose, rather than being tradeable property of the franchise, we might have higher satisfaction and better quality of play among all players overall.2. We recognize that the size of a market is really what determines the revenue stream of a franchise. A city with a smaller population can actually be a larger market and revenue stream if that city has fans that spend more on their team per capita or if that franchise has fewer compe ors from teams in other sports within the city. Also, a franchise's revenue stream is not limited to ticket sales to locals and broadcast rights. To use the Spurs as an example, their fanbase goes beyond the borders of San Antonio. All these fans spend on Spurs merchandise, tune-in to broadcasts, and give their "eyeballs" to Spurs related-news.
Hey man. Good point. However, the San Antonio local goverment did not make that subsidy out of the kindness of their hearts. They made it as an investment. The idea is that the effects of having a succesful basketball franchise in SA would more than make up for that investment. And quite possibly it has over the many years the Spurs have been in business.
Now, governments, local, municipal or federal, do not always make the best investment decisions with public money. However, what is the financial windfall of having a team located in your city? What more if the team wins championships? My point here is that franshises in non-large markets can afford to build and nurture top basketball teams. The government subsidy as well as private investments of the entreprenuers who risked their capital to build the team combine to create value which is rewarded. In a free market for basketball talent, all these things would occur and lead to more dynamic teams throughout all the franchises.
Very few players are willing to accept less money in favor of other considerations. Professional athletes are young people, and their priorities tend to those of other young people, where social life outweighs things like raising a family. Opportunities for things like nightlife typically are more abundant in larger markets.
It would not be impossible for an elite player to choose to play in a small market for less money, but it would be so rare as to have negligible effect on the equilibrium.
There is no basis to assume that fans in a smaller market would spend more per capita than fans in a larger market. It would border on absurd to argue they would spend the multiples of money it would take to balance out the ratio of large markets to small, which can exceed 10:1. In fact, larger markets tend to have larger concentrations of great wealth, since the size of the market is usually indicative of its ability to generate jobs, which indicates economic vitality.
Likewise, there is no basis to assume that fans of one sport are equally fans of another sport, such that the two compete equally for disposable income.
Government subsidies go against free market principles.
Large market teams already have advantages inspite of the structure in place to level the playing field. Back in 2003 when the Spurs had cap space, after failing to attract Kidd, they went after Elton Brand who was a restricted free agent at the time. They put together a creativee front loaded package to try to scare the Clippers off. Brand was interested and ready to sign when Miami and Nike stepped in. Miami offered the same package but Nike said if Brand would sign with the large market Heat instead of San Antonio Nike would offer a large endorsement package. Brand took the Heat and the endorsement offers. Ultimately the Clippers matched.
If the playing field wasn't leveled there would be about 10 teams in the league. Phoenix, if the existed, would be a bottom dweller for all eternity.
The whole reason leagues have drafts and salary cap systems is so that they can have more than 9 or 10 teams. The big market teams get a smaller share of a bigger pie, but make more money overall.
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