7/24/08

Capitalism and Josh Childress

We have heard about the reports that Josh Childress will leave for the famous Greek team, Olympiacos. The deal includes incentives such as a house and tax breaks that will earn him a bit over $20 million dollars. That is more than any NBA team could pay or would pay for Childress. This is a little worrisome for the NBA in the short term, but hopefully the problems will be fixed after this.

We have seen 7 NBA players go overseas this offseason including relevant players such as Juan Carlos Navaro, Bostjan Nachbar, and Tiago Splitter. This has to be a little bit of an eye opener for the NBA. The NBA is half right that there is no competition for the league, in America. We have now seen two very high profile players go overseas in Brandon Jennings and Josh Childress. Jennings is a little different because he is expected to return after a 1 year stint. As much as we want the "1 year rule" to change, it won't because it does not hurt the NBA. Childress' case does. Here is a reason why this hurts the NBA right now, but allows for a progressive change in the league.

Collective Bargaining Agreement: If any of you have ever read the CBA, it is extraordinarily complex. There are many restrictions on players and teams. As a whole, it is pretty fair. The problem is that it assumes no league can compete with the financial power of NBA teams. The league has been right on this issue since the ABA merger, until now. The growing power of European basketball is driving players and their agents to explore the offers from foreign teams. The reason is simple and obvious. We can use Josh Childress' case as an example. Childress was a restricted free agent this season which has meant that players usually don't get many offers from other teams because the owning team will just match the offer. The Hawks did not give Childress an extension last offseason and did not come at him with a strong enough offer this offseason. There are other teams in the league with the cap room to make an offer at Childress, but the CBA prevents this from happening. The CBA is a restrictive capitalist tool (in this case it is the salary cap) that creates a great competition among NBA teams, and until now, that domestic competition was all that mattered. Now, seemingly out of the blue, Olympiacos has made an amazing offer at Childress that he accepted and sent him on his way. This will hopefully be an eye-opening experience for the NBA and the players union, and hopefully this will be changed in the near future to prevent players like Josh Childress from going overseas. Clearly, NBA teams are going to pay almost whatever is necessary for superstars to stay here, but the cap prevents them from paying valuable swingmen such as Childress top dollar. The times have changed and the NBA must adjust to this evolution before we have every superstar complaining about the lack of support around him because all of the role players went to Europe.

The restrictive nature of the CBA allowed Josh Childress to be bought at a much higher price than he ever would have received in the NBA. The NBA, as well as other professional leagues, are incredibly bad at preventive measures. It is perplexing to see how many lawyers, economists, marketing experts, etc. be employed by the NBA and not foresee that Euroleague teams could compete with the NBA. That is only one example of how the NBA did not prevent a potential problem from happening. Surely the NBA could have taken preventive measures from something like the Palace Brawl from happening, or at least minimizing it. The 'players cannot enter the stands rule' could have and should have been in place before November of 2004. The NBA could have minimized a Tim Donaghy scandal by allowing referees to talk to media after games, and especially after controversial calls, or even raising salaries. Sadly, there are changes that should be made, but won't because it takes a long time to make any sort of change, but with finances like player salaries and league revenue at stake, you would think the NBA would at least study the competition to the league. It takes a long time for leagues to predict or even react to changes. This is no different, but when the NBA prides itself on saying it has the best basketball players and athletes in the world, it better do all it can to keep it that way.

Izzy

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Very fitting to the topic. The NBA and MLB combined are not even worth as much as the NFL.

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