Saturday, February 26, 2011

How Valuable is Parity?

It's been two days since the dust has settled on the NBA's trade deadline, perhaps the busiest period of trade activity in the history of the league.  A number of players changed teams this week, and some of them were among the sport's biggest names; not only was Carmelo Anthony (finally) traded to New York, but Deron Williams moved from Utah to New Jersey, Washington picked up Mike Bibby from Atlanta and Gerald Wallace was dealt from Charlotte to Portland.  After all of the trades, Utah CEO Greg Miller spoke about the impending loss of parity in the NBA (via ESPN.com):
"I can only speak from the Jazz ownership perspective in saying that I'm not interested in seeing a congregation of star players on a handful of teams throughout the league. I don't think it does the teams any good. It doesn't do the fans any good. It doesn't do the sponsors any good."

I know that Miller isn't alone here; I very much feel the same way.  You can read my most recent thoughts about the bad taste in my mouth following the Knicks' acquisition of Anthony, and I felt even more frustrated after LeBron James and Chris Bosh decided to take their talents to South Beach.  While I guess Boston acquired their stars a bit more organically, I still don't love the fact that they received Kevin Garnet and Ray Allen from struggling franchises to go along with homegrown talent like Paul Pierce and Rajon Rondo.  And what the Lakers did to Memphis with the Pau Gasol deal is the closest thing the NBA will ever see to armed trade robbery.  I'd rather be shot than have Kwame Brown on my roster; luckily, Memphis also acquired Javaris Crittenton in that trade, exactly the guy you need to do the shooting.

So yes, as a basketball fan (presumably like Miller) who would love to see all teams, both large- and small-market, stay competitive, it's not fun to have top players congregate on a select group of teams.  The question is: Is this bad for the sport of basketball?  I feel like many fans automatically answer "Yes" without really thinking through it.  As American sports fans, we are obsessed with trying to achieve parity.  As we continue to transition towards making football our new National Pastime, we credit parity for the main reason why fans love the NFL.  Is there any truth to this?

Take Major League Baseball, which is undoubtedly a) more popular than the NBA and b) more profitable.  MLB has created exactly the atmosphere that Greg Miller is worried about - a large number of top stars (or at least big names) play for a comparatively small number of teams including the Yankees, Red Sox, Phillies and Mets.  While it's not exactly the same as the NBA situation - there are a lot more good players to go around in baseball, and long-term success is much tougher to predict - the principle is the same.  Small market teams are constantly losing their top talent to bigger, badder franchises (Kansas City is practically a Yankees farm team at this point).  To hammer the point home, consider how happy baseball fans were that a "small-market, low-budget" team like the Giants won the 2010 World Series.  Since when is San Francisco a small market?

And you know what?  It works!  Over time, the Yankees have converted fans all over the globe and convinced them to join the Evil Empire.  Boston has built up a giant Red Sox Nation, and the Phillies have developed a rabid fan base and national appeal.  As for the smaller teams?  Yes, they struggle, but the gains achieved by large-market teams may outweigh their losses on a net basis.  Who can monetize Adrian Gonzalez more effectively, the Red Sox or the San Diego Padres?  The answer is obvious.  MLB has a system in place where the big teams make most of the money and share enough revenues with the smaller teams for them to get by.  As a fan of a small market team you might not like it, but compare MLB's and the NBA's Income Statements and see which one seems to make more sense.

To Greg Miller, I say I'm sorry for your loss.  It's never easy to lose a franchise player, and Miller has now seen both Carlos Boozer and Deron Williams leave Salt Lake City in consecutive seasons.  But as a rational businessman, I ask him to step back for a second and try to understand why this might make sense.  In a sports ownership landscape where the line between business and pleasure is extremely blurry, it's hard to decide if a decrease in parity is good or bad for the NBA.   

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