Competitive balance cuts to heart of lockout

David Stern has continually stated his desire for competitive balance in the NBA. (Lucas Jackson/Reuters)

It was Paul Pierce who, at a recent labor negotiating session, raised the issue that is so simple and yet so central to this lockout, according to Ken Berger of CBSSports (and Jared Dudley):

“If it’s about being competitive, let’s come up with a system we can all be competitive in,” Pierce told the owners, according to Suns player representative Jared Dudley. “If it’s about money, that’s a different story that we’re talking about.” 

When deputy commissioner Adam Silver and commissioner David Stern spoke to the media after each failed negotiating session, including Thursday’s pre-lockout wrangling, they began by outlining their vision of a system where all 30 teams can contend if managed well. This is almost always the first talking point. Only after one of them (usually Silver) mentioned this dream of competitive balance did the NBA’s ownership start talking dollars — the alleged losses 22 teams are facing (large chunks of which are undoubtedly real), the need for a hard salary cap, the split of basketball-related income and all those other scintillating issues we’ll spend the next months talking about. 

Pierce’s statement was a way of asking, “If you really are interested in competitive balance above all else, why not use tools other than a lockout and a reduction in player salaries to get there?” Those tools could include a more robust revenue-sharing system, aggressive pursuit of alternative revenue streams (sponsor patches on jerseys, anyone?) and perhaps a tweak or two the current soft-cap system that would make it easier for teams to keep their star players. Whether any of this would be enough to help more owners earn a nice profit would depend on dozens of variables, though the national TV deals the league negotiates after 2016 will surely help. 

But this discussion raises two questions I’ve been kicking around for months:

1) Has the NFL created a false standard, a glorious siren’s song that other leagues can’t realistically approach because of the football’s unique schedule?

2) Can professional basketball ever be truly competitive, with the NFL’s type of season-to-season unpredictability and surprise contenders? 

The NFL has riches that all other American professional leagues aspire to obtain — more than $9 billion in annual revenue compared to about $4 billion for the NBA, and a season that is (relative to other sports) unpredictable on both the micro and macro levels. Middling teams can morph into contenders in a single offseason, and the win-or-go-home nature of each playoff game gives underdogs a more realistic chance of advancing than in a seven-game series. 

And in a regular season limited to 16 games, every one matters. A team that starts 0-2 is in a gigantic hole, and 0-3 is basically a death sentence. Every game is crucial, and because of the rarity of those games – just 16! — every one is covered by an insanely lucrative national television contract split among all the teams. In theory, the NFL could have perhaps done things differently, with teams playing on different days and broadcast contracts tied to local television. But with so few games, the league decided early to focus on Sundays and ink a single mammoth TV deal covering every game. That decision is what created the NFL’s unique level of revenue sharing, which in turn contributed to its unique level of competitive balance. 

Lots of smart people — economists, lawyers, students of sports and business — have told me that no matter what the NBA does, it might not be able to achieve the kind of competitive balance Stern and Silver say they want. A hard cap and some revenue sharing might help, but they will not change the fact that local television will always rule. Plus, the NBA can play many more games than the NFL (football players cannot play any more for physical and medical reasons), basketball’s seven-game playoff format is a better way of determining a champion and the distribution of truly great players — and truly great tall players — might determine more than anything else who is truly in contention. 

“The NFL is the outlier here, not the NBA,” said Gabe Feldman, a law professor at Tulane and a sports law expert. “Whether it’s because of the 16-game schedule or the national TV deal, the NFL is not the norm. The NBA model is much closer to the norm, where you’ve got local media deals and ticket sales and parking and things like that driving the success of a team. It’s difficult to find a way to split up those local revenues.”

David Berri, an economics professor at Southern Utah University and the author of several books about the intersection of sports and business, has gone a step further in arguing basketball is inherently uncompetitive. Berri and his colleagues have studied competitive balance across several sports and found that all basketball leagues, including defunct ones like the American Basketball Association, have suffered from a competitive imbalance linked to the scarcity of franchise-changing talent.

“The NBA has never been a competitive league, and it’s never going to be a competitive league,” Berri said. “Some teams get the best players and some teams don’t. However you shuffle the league, it’s going to be the case that a few teams are dominant and a bunch of teams are not — just like in the 1980s, with the Celtics, Pistons, Sixers and Lakers. You are not going to manufacture five LeBrons. There is nothing Memphis can do to turn Rudy Gay into LeBron James.”

Is Berri right? It’s tempting to think that a $45 million hard cap would at least prevent multiple superstars from joining the same team and thus result in an equitable distribution of those superstars. But maybe that’s just pie in the sky. Andrew Zimbalist, an economics professor at Smith College and one of the giants in the field of sports economics, agreed that the NBA will likely never achieve an NFL-level of competitive balance, regardless of how the owners and players tweak the current salary system. (As an aside, Zimbalist endorsed a form of revenue sharing that would redistribute money based on market size — from large to small — rather than team revenues. Such a system would encourage all teams to fight as hard as possible for revenue rather than rewarding low-revenue generators regardless of other variables.) 

All of this might sound like mumbo jumbo to most fans, and answering these kinds of questions with 100 percent certainty isn’t possible, since we have not seen how the NBA would operate with a $45 million hard cap. But these questions speak to the heart of the lockout, and specifically to the public message Stern is sending out: This dispute is as much about fan-friendly competitive balance as it is about money.