How the NBA is playing the media (and some fans)

Posted on September 24, 2011 by


What do you think?

We’re fans of the facts here.  And here are some facts we have laid forth recently:

  • In the NBA, players salaries — as a percentage of revenue — is fixed
  • In the NBA, cities pay most of the cost for stadiums.
  • NBA teams appreciate in sales value.
  • Owners, therefore, are in a great position to make money off their teams.
During the lockout, though, the owners have adamantly argued that they’ve been losing money. And although this argument is old (as The Wages of Wins notes, sports owners have claimed they are losing money since the 19th century), people in the media (and some fans) are still buying the NBA’s story.  Here is how it seems to work:
  • NBA: We’re losing money!!
  • Reporter: Some crazy economist in Utah says your costs are way low. How are you losing money?
  • NBA: How do you think we’re losing money?
  • Reporter: I don’t know. Maybe, gas prices or insurance premiums on players’ health?
  • NBA: Feel like writing an article up on that?

During the lockout there has been a lot of speculation as how the NBA could be losing money. Some is flat out wrong, such as blaming player salaries. Other theories might be reasonable. The point is that we don’t know. The NBA has kept its mouth shut and letting others do the talking. After all, if the players eventually buy the NBA’s story, profits will only go up.

The sad part is that this strategy appears to be working. The players have conceded something by agreeing to give up some of their salaries to help the owners out. We’ll have to see how this plays out, as the season is still in jeopardy.

Unfortunately, though, if there is a season and this strategy works, we’re almost assured to see the same story again in a few years.  After all, we have been seeing this story for more than a century!