Listen to an NBA coach during a game and you will often hear him scream something like the following:
Why do coaches have to keep screaming this message? The answer seems easy. Basketball players love to shoot. In other words, many players have trouble resisting their inner ball hog. Consequently, coaches have to scream a lot.
Academic meetings typically involve less screaming. But the behavior we see in these meetings is surprisingly similar to what we see on a basketball court. For example, recently I attended a meeting at Southern Utah University. The meeting began at 4 pm, and 25 minutes later we still hadn’t started on the items that were the actual subject of this gathering. Instead, numerous people had chimed in on items we supposedly had finished in our previous meeting (and other issues not related to the subject at hand).
According to the Sports Business Journal, the NBA is going to fully phase in a revenue-sharing plan in 2013-14 which:
1. “Calls for all teams to contribute an annually fixed percentage, roughly 50 percent, of their total annual revenue, minus certain expenses such as arena operating costs, into a revenue sharing pool.
2. “Will shift $140 million around the league
3. Will allow a single team to receive up to $16 million (this year the most any team could receive was $5.8 million), a mark that is about 25 percent of this year’s payroll cap
All of this will — according to Jeanie Buss (Executive VP of business operations for the Los Angeles Lakers) — allow teams to become “economically viable so that every team has the opportunity to compete.” And according to Buss, this will “make for a healthier league.”
As the article notes, Buss served on the committee that created this plan. And as the article also notes, Buss and the Lakers will contribute the most revenue. Unfortunately, it seems unlikely that this plan will dramatically change the level of balance in the league.
Before labor peace came to the NBA, it was not uncommon to hear stories that the lockout was going to negatively impact fan interest in the game (here is one example in this genre). The story basically went as follows:
1. Fans become angry when the games are taken away.
2. The longer fans go without games, the angrier they become.
3. Stay away too long and the angry fans will never come back.
This story actually gets repeated every time a labor dispute that taken away games in North American sports. And the story certainly seems plausible.
A few years ago, though, Martin Schmidt and I investigated the impact disputes have upon fan attendance; and much to our surprise (yes, we tended to believe the stories sports writers had told us for years) we failed to find an effect. Attendance in the major North American sports is not statistically impacted by labor disputes.
The following is a guest post by David Berri, a Professor of Economics at Southern Utah University. He is also the lead author of Stumbling on Wins, the general manager of the sports-economics blog Wages of Wins, and is a frequent contributor to the Freakonomics blog.
Soon after presents are opened on Christmas morning, the NBA – after a lengthy lockout – will finally open its 2011-12 season with a slate of five games. Although NBA fans are pleased the lockout has ended, they’d probably prefer that it had never happened. Unfortunately for fans of pro sports in North America, such disputes frequently cause games to be missed. But maybe there is a free market solution to this problem to be found in, of all places, Europe.
Although we tend to think such disputes are a contest between labor and management, frequently the real conflict – as noted in my recent posts here — is between small and large market teams. In North American sports, team revenue seems to depend on the size of the market where the team plays.
The following is a guest post by David Berri, a Professor of Economics at Southern Utah University. He is also the lead author of Stumbling on Wins, the general manager of the sports-economics blog Wages of Wins, and is a frequent contributor to the Freakonomics blog.
In the past couple weeks I have written about labor negotiations in the NBA and the recent labor agreement in Major League Baseball. Now that we have agreements in both sports, thanks to the new NBA deal, I would like to address why the two unions involved in these negotiations have historically achieved such different outcomes.
Let’s begin with how the outcomes are different.
The following is a guest post by David Berri, a Professor of Economics at Southern Utah University. He is also the lead author of Stumbling on Wins, the general manager of the sports-economics blog Wages of Wins, and is a frequent contributor to the Freakonomics blog.
Last week I looked at the labor negotiations in the NBA. Since then, the NBA appears to have reached an agreement with its workers, ending the latest dispute in professional North American sports.
Over the last three decades, labor disputes have become a common feature in professional sports. In fact – as The Wages of Wins indicated– relative to non-sports industries, labor disputes are about 25 times more likely in professional sports. So the recent lockout in the NBA was hardly surprising.
The following is a guest post by David Berri, a Professor of Economics at Southern Utah University. He is also the lead author of Stumbling on Wins, the general manager of the sports-economics blog Wages of Wins, and is a frequent contributor to the Freakonomics blog.
With the NBA away, sports fans are looking for something to satisfy their need to watch teams strive for victory. Well, why not take a look at the teams competing in the lockout? Okay, maybe this is a contest only a sports economist could love. But while it may not appeal to everyone, the labor dispute is still best thought of as a contest between two teams.
The first team is the NBA owners. The owners are the dominant buyer in the world market for elite basketball talent, so they have substantial monopsony power. In the other corner are the players, who are currently trying to disband their union. This union gave the players monopoly power in the sale of elite basketball talent (more specifically, in helping to determine the conditions under which individual players would sell their services). When a monopsony meets a monopoly on the economic battlefield, the outcome is determined by bargaining.
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