Heads the Owners Wins, Tails the Players Lose

Posted on October 11, 2011 by


“If we are victorious in one more battle with the Romans, we shall be utterly ruined.”-King Pyrrhus of Epirus

Ready for the long winter ahead

The NBA lock out is a toss up.  Heads the owners will win.  Tails the players will lose.

Yes, as I explain at the Huffington Post – in “NBA Owners to Players: This is a Stick-Up”– I think the owners are clearly going to win these negotiations.  And that is because the players – who seem to lack a negotiating strategy – are essentially unarmed.

The story at the Huffington Post details my review of the players’ inability to negotiate.  In addition to this story, I also want to briefly comment on an interview I gave on Monday.

Yesterday I spoke to a television station in Charlotte.  The reporter repeated the claim the NBA has offered that if the owner’s position is accepted by the players, teams like the Charlotte Bobcats will become more competitive.  That position, though, doesn’t seem consistent with the evidence.  Whether the players are paid more or less, Charlotte will still struggle as long as their team is populated by players who are not as productive as the players we see in Miami, Los Angeles, and Boston.

The owners have said that a more level playing field might make a difference.  In other words, the owners have indicated that they want every team to pay roughly the same for talent.  The owners, though, have given up on the hard cap.  That means that for teams to spend the same, more revenues would have to be shared.  And that means the negotiations that need to take place today are not between owners and players, but rather between rich teams and poor teams.  Since these talks don’t really seem to be happening, it doesn’t look like a more level playing field is in the NBA’s future.

Of course, I would add that even if teams spent the same, it is unlikely teams would end up with equal levels of talent. As I have noted before, the NBA can adopt any rules it likes but the supply of elite players – such as LeBron James, Chris Paul, and Dwight Howard – is limited.  So one should not expect a particular revenue sharing scheme or hard salary cap to dramatically impact competitive balance.

– DJ