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schtevie wrote: If monopsony doesn't annoy you, fair enough....

Hey, I learned a new word today!

skepticalsports wrote:90% of their own league (or whatever they could manage) would be much much less profitable for current players than 50% of the NBA. The overhead costs would be enormous, and the appeal (comparatively) limited.

Tactically, however, the players should be doing everything they can to make the *threat* of starting their own league seem as credible as possible. So, e.g., Lebron, Rose, Wade, et al. walking out of the All Star Classic last week may have cost the players 10s of millions or more.

I think this sums it up well. On the one hand, yeah the key scarce factor of production here is NBA talent, whereas the capital supplied by the owners can come from any of hundreds of zillionaires, both domestic and foreign. So the players ought to be getting a more substantial slice of the pie, or at any rate maintaining their slice.

But realistically, there's another key factor: the brand name identity that the NBA provides, not so much the letters "NBA" and the logo, but the franchises: Pau Gasol could get traded to the Clippers and though he'd still be Pau playing in LA, he'd now be a Clipper and not a Laker. And if we' re talking not the Clippers but say the old LA Pro Summer League, then even games with Paul Pierce et al drew crowds that reached the low four figures at best.

I think an upstart Basketball Players Association would go the way of baseball's Players' League. Another analogy is the failure of the NFLPA's All-Star games during the 1982 NFL strike.

A more serious threat might be to create another ABA. (A real one, like the one in the 1960-1970s, not the fly-by-night ABALive of today.) Such a league would also be doomed long term, but could raise players' salaries in the short run and more importantly hurt NBA owners in the short run. But there'd need to be a set of wannabe owners for such a league, with deep pockets.

The XFL is the closest comparison for what a new basketball league would face. The XFL carried the heavy baggage of being associated with Vince McMahon and overdoing the WWF style theatrics though. Much of the media eagerly helped bury them for these ingredients. If they had a different prime mover and somewhat different style, things might have had more chance of going better in the long-run. Maybe the AFL and USFL would be better to look at. And of course the ABA but all these leagues were attempted in a different media and merchandising world. I'd think the prospects might be better now but I haven't researched it enough to be 100% sure.

Just scanning a few articles, I see one that said the XFL/NBC lost $70 million in the first year. A new league probably would have to be capitalized / underwritten to a degree to sustain such losses and try to break even on the operation side after say 5 years, with the possibility of creating a capital gain being the big immediate draw / concern. A basketball league with 9-12 man rosters would be easier to finance than 40+ man football rosters. A new league would probably have to secure a total of at least $500 million per year in initial local, national and international TV deals to be a significant force and potentially viable. If the organizers talked seriously to the handful or two of national cable networks with pretty detailed plans for operating and "working", they might find out whether that critical piece was possibly available at a viable financial level or not and then you'd know whether to pursue the planning further or not.

The right mix of solid basketball guys, solid basketball business guys, more proven & innovative business guys (especially with raising capital), rich guys looking for a trophy investment and maybe publicity, TV networks, sports merchandisers, national and international companies looking for their products to be in the spotlight for the younger male demographic, arenas with available dates, cities looking for entertainment magnets for their downtowns and national profile, etc. could build a new league if they had great leadership to assemble and guide them and they were truly committed to building something together for longer than a 1 or 2. Player interest would have to be matched by interest from the others. As I said before the most likely scenarios would be that serious planning had some affect on labor negotiations that broke off long-term or that a new league would eventually merge back into the NBA or some form of world league.

If you realistically thought you had say a 60% chance of success, maybe you go for it. Less than that, no. But they should probably compare the venture against a 50/50 deal or 47% to the players and lower offers that might come this time or quite likely next time. At some level of NBA offer of player share the idea of a new league might meet its threshold for pursuit. Probably not this time, but maybe next time or the time after that.

Taking a different angle on it, what if the players started a true league in the summer. Not these one off exhibitions, a real national league. It would be extra income, competition for the eyes that might go to baseball, soccer, motor racing, golf, etc and the chance to both learn how to run a league and potentially demonstrate competency to possible additional (and maybe bigger) partners and demonstrate a real threat to the NBA.

It is all just speculation until enough of the players and union leadership show any interest in it. Far far less work just getting some deal with the NBA. Maybe you don't rock the boat that much. Maybe you just wait for the next TV deals to just make everyone lots richer even if the percentages shift some towards the owners.

Looking at the big pieces of the model, do you gain something valuable (besides who owns it) moving from 30 owners of franchises to unified league ownership or a league level partnership or do you make it harder to capitalize that investment? Do you take the venture public or partner with a global conglomerate or access private capital? Is there a middle ground for mixed ownership of teams (league, network and local investors)? How much do you want fans involved in ownership? Can you secure their help without losing control? Get you get and maintain good asset valuations?

What if they partnered with either NFL, NHL or MLS owners (and maybe moved the season in the case of the first two potential business partners)? It is a wild what if but if you wanted to pay real long-term hardball with the NBA those are conceivable paper options. Heck, maybe there is some creative way they could partner with the NCAA. University-corporate partnerships have gotten pretty creative in some cases in the areas of research, student services, etc.

How much could you save with one unified business operation over 30? Could you realistically achieve greater revenue growth with different on the court rules and different marketing strategies? The NBA has had lots of success but in some ways they have lost ground in the big picture. Could you realistically take quicker and greater advantage of long-term opportunities in Asia, the Middle East, South America? Franchise leagues?

Whatever. Their's to consider.

schtevie wrote:If monopsony doesn't annoy you, fair enough....

I'm not an economist, but I think it's a pretty classic Bilateral Monopoly, no?

mtamada wrote:

skepticalsports wrote:90% of their own league (or whatever they could manage) would be much much less profitable for current players than 50% of the NBA. The overhead costs would be enormous, and the appeal (comparatively) limited.

Tactically, however, the players should be doing everything they can to make the *threat* of starting their own league seem as credible as possible. So, e.g., Lebron, Rose, Wade, et al. walking out of the All Star Classic last week may have cost the players 10s of millions or more.

I think this sums it up well. On the one hand, yeah the key scarce factor of production here is NBA talent, whereas the capital supplied by the owners can come from any of hundreds of zillionaires, both domestic and foreign. So the players ought to be getting a more substantial slice of the pie, or at any rate maintaining their slice.

But realistically, there's another key factor: the brand name identity that the NBA provides, not so much the letters "NBA" and the logo, but the franchises: Pau Gasol could get traded to the Clippers and though he'd still be Pau playing in LA, he'd now be a Clipper and not a Laker. And if we' re talking not the Clippers but say the old LA Pro Summer League, then even games with Paul Pierce et al drew crowds that reached the low four figures at best.

Mike, we agree on talent being the scarce factor and financial capital being in elastic supply. Where we disagree is the counterfactual value of the NBA brand. Clearly the mode of transitioning from one regime to another would matter. How about this for a possible path, as thought experiment anyway?

The Players announce the formation of a shadow league. In whatever year the of creation/transition, for each specific NBA franchise a parallel PL (Players League) franchise would be created for auction. Same city. Same roster (prior to the beginning of year one, with new franchises, say, having right of first refusal on subsequent contract offers). Same rules of the game. All up for auction. If Pau were then an LA Laker, he would now be an LA Smogger, or whatever.

If the NBPA could keep the membership united in leaping collectively, what would be the value of the NBA brand then? Not so high. And what would be the value of the hypothetical PL? Would a TV contract be expected to be smaller? Would there be a deficit of merchandising opportunities? Would the owners of newly vacant stadiums not wish to "rent" 41 games worth of events? By construction, there would be minimal dislocations of geography/player specific fan interest. And then there would be a whole lot of interest in such a new league. With the league's formation itself then anticipated player movement (what with the impediments from capital labor conflict having been removed) it could be the greatest rotisserie league ever.

mtamada wrote:I think an upstart Basketball Players Association would go the way of baseball's Players' League. Another analogy is the failure of the NFLPA's All-Star games during the 1982 NFL strike.

A more serious threat might be to create another ABA. (A real one, like the one in the 1960-1970s, not the fly-by-night ABALive of today.) Such a league would also be doomed long term, but could raise players' salaries in the short run and more importantly hurt NBA owners in the short run. But there'd need to be a set of wannabe owners for such a league, with deep pockets.

My suspicion is that a notional PL would have myriad advantages that the historical referents did not. Selling global digital rights for upwards of $1 billion, for one. Having hundreds of millions of Chinese to buy shirts, shoes, etc. And as for wannabe owners with deep pockets, I thought we began by stipulating that money would not be expected to be in short supply?

Source: No Small-Market Teams Want 50/50 Proposal
http://basketball.realgm.com/wiretap/21 ... 0_Proposal

Ridiculous. Just contract or sell the teams to owners who can afford to be in the game. This is more a hostage crisis than a lockout at this point.

I'll take a big guess and say that a second "NBA" would fail horribly, especially if it was run by the union. Players aren't rich enough, players are not responsible enough with their money, we are in a weak global economy, and you can't create an artificial market. Most NBA teams lost money yet players made 2 billion dollars in profit IIRC.

Also these occupy people are getting arrested in droves. They're criminals and we should not glorify them.

huevonkiller wrote:I'll take a big guess and say that a second "NBA" would fail horribly, especially if it was run by the union.

That's quite a big guess!

Players aren't rich enough,

The idea doesn't necessarily have to be funded by the players.

players are not responsible enough with their money,

This is somewhat wide sweeping, not necessarily correct, and even if true, completely irrelevant to the health of a new league.

we are in a weak global economy, and you can't create an artificial market.

How is this an artificial market? People love basketball. People love watching basketball. People love watching professional basketball. People pay for that. These players are the supply, and they are very much in demand.

Most NBA teams lost money yet players made 2 billion dollars in profit IIRC.

I don't recall this. I recall most teams claiming to lose money, and yet after rigorous examination, it appears only a few do.

Also these occupy people are getting arrested in droves. They're criminals and we should not glorify them.

lol.. wat? You're politarding this forum? Strange. Talk about basketball, please.

This 50/50 nonsense is an appeal to "fairness", but don't forget there are only 30 owners, compared to over 450 players. The players have already conceded too much. Millionaires getting screwed by billionaires....

And the ABA is a better example from the past than the XFL; the XFL didn't have top players. The ABA managed to steal away a lot of the top young talent and force a merger after a few years.

Is the 50/50 even a real offer? When I hear that small market teams are opposed to it, and I hear Stern saying that he's fighting to keep that offer on the table, I wonder if it's little more than a "move the bar" negotiating technique. That if the players accepted at 50/50, the owners would simply refuse to approve it and they'd have to negotiate a deal the owners would accept.

huevonkiller wrote: Most NBA teams lost money yet players made 2 billion dollars in profit IIRC.

a) Do you really believe this? I don't. I would bet that once there was a full accounting of all the ways that owners make money from owning a team that almost no team lost money. Malcolm Gladwell illustrated this point with an article at Grantland a while ago.

b) Even if a few teams did actually lose money, the issue is NOT player compensation. There has been a league-wide hard cap on player salaries throughout the last CBA. If owners can't figure out how make money with 43% of $3.8 billion -- approximately $1.6 billion -- I'm not sure how that's the players' fault.

All that said, I don't care if the players end up getting a smaller percentage. Maybe 57% is too high. Maybe it should be 50/50. What I don't like is the patent dishonesty of the owners' position. If they TRULY are losing money -- prove it. Open the books. Then explain how the problem is player compensation when they've had fixed labor costs for the past 6 years. Then come up with a comprehensive plan that includes REAL revenue sharing.

What owners have done here is pick a fight. They want to break the union and impose their own system. I *think* that if they'd come into the negotiation with a posture of working with a partner that a favorable deal would already be complete and we'd be talking about on-court stuff right now.

I think this article is spot on. The owners may get what they want in the short term. They may get the players to buckle. But owners like Jordan and other small market owners who stood against the players may reap the whirlwind when it comes to improving their teams through free agency in the future. The players will not forget.

http://basketball.realgm.com/blog/21633 ... ge_Players

Isn't this a little self-fulfilling? Aren't the small market teams already on the low end of the totem pole as far as free agents go? If it were to happen that small markets continue not getting top free agents, how would we know if it's payback for the lockout or just the status quo? Shouldn't we at least have a list of teams/owners that the players would supposedly target? I've seen a few throughout the lockout and they have differed both over time and across writers. Another post on the same site, in fact, says that Jordan hasn't done much of anything during negotiations.

In this case it's the perception of MJ that matters, regardless of what he actually said or didn't say:

http://probasketballtalk.nbcsports.com/ ... nt-players

I think it's safe to say the perception right now is not favorable.

EvanZ wrote:I think this article is spot on. The owners may get what they want in the short term. They may get the players to buckle. But owners like Jordan and other small market owners who stood against the players may reap the whirlwind when it comes to improving their teams through free agency in the future. The players will not forget.

http://basketball.realgm.com/blog/21633 ... ge_Players

I don't really buy this

I don't really buy it either. It might affect a free agent at some point, but over the long haul, players go where the money is. If Jordan's team is making the best offer, that's where the player will go. The only place where ill will might have an effect is where the offers are about equal, and then there are myriad factors in play, including minutes, strength of the team, chances of winning, etc.

To me, players intimating that they wouldn't play for a Jordan-owned team in the future is akin to the fans who say they'll boycott the league when the lockout ends.