Another Call for the NBA Players to Start a League of Their Own

Posted on August 29, 2011 by


Editor’s Note: Back in July I asked: Do the Players — and Cities — Really Need NBA Owners? That post argued that NBA players need to consider starting their own league. That argument has now been advanced by Stuart Anderson from   Below is the column Anderson wrote for this weekend.

Tall People Who Can Dunk Unite: Start Your Own League

by Stuart Anderson (of

The NBA lockout is months old and there is no end in sight. One reason is that NBA players have not shown the owners that the players possess a viable alternative to playing in the NBA. To date few players have announced they would play in Europe. NBA owners likely interpret that to mean there is nothing to worry about and if the players want to eat, then they’ll make a deal favorable to the owners. After all, the owners assume, these guys can either play basketball or star in a reality TV series – and there are only so many Kardashian sisters available to marry.

But imagine if NBA players decided to start their own league. That would change the dynamics of the negotiations. And it wouldn’t be that difficult. The players could start a new league, for example, by creating a large cooperative to which all players share in the revenues. None of the teams need an owner; each team just needs a general manager, who can be paid out of revenues. The players – or the cooperative to which the players belong – will be the owner(s).

The idea of players starting their own league originated on the website Wages of Wins Journal.

The primary cause of the NBA lockout is that the owners want the players to swallow much lower salaries, something that has received little attention in the media. “The 30 owners of the National Basketball Association have told the players to take a substantial pay cut,” writes David Berri, co-author of Wages of Wins and Stumbling on Wins and a professor of Economics at Southern Utah University. “And if the players don’t agree, these players are not going to be playing in the NBA for a long time.” You can find a description of Berri’s proposal for a new league here.

Under the most recent NBA collective bargaining agreement, the players receive a fixed 57 percent of revenue. That means the league could attract far less revenue and the players would still come out ahead. (Arturo Galletti explains some of the numbers at the heart of the labor dispute here.)

After teams are established in major cities and venues secured, there is no question a television contract would follow. And then the teams would be selected. Imagine the excitement created by a draft that involves not only recent college players but also all NBA players. The order of the draft would be chosen by lottery. Then the order in the first round could be reversed in later rounds.

Imagine the excitement of a draft where teams get to choose first, second, third, etc. among a group that includes Dwight Howard, Kobe Bryant, Lebron James, Dwayne Wade, Chris Paul and every other NBA star. It would be a real-life fantasy league draft. Perhaps there could be a new draft every year, so every city gets a new chance at securing a star each season.

General managers would be given a pool of money to sign their picks to contracts. Provisions could be made to give players sufficient leverage in these negotiations, while also allowing general managers to stay within a budget.

The beauty of the proposal is that it likely would never get that far. As soon as NBA players presented a credible plan for a new league, the owners would come running. “If the players get serious about this new league, this current lockout will end very quickly,” notes economist David Berri. “The NBA owners appear to think that players are going to be forced give in. After all, there is only one NBA. But the scarce resource in this conflict is not the 30 owners. It really is the players.”

And the owners have a great deal to lose. There is little value in an NBA franchise that does not actually play basketball games in the NBA. So far, the owners have been fortunate that the players have thought like employees, not like entrepreneurs. Underestimating your opponent is never a good idea.