Stu Whitney from the mighty Sioux Falls Argus Leader reports that the NBA may be getting ready to acquire the Continental Basketball Association-- including the mighty Sioux Falls Sky Force-- to merge with the NBADL before the 2006-07 season.
I am not just bringing this up as an excuse to mention that I have attended a Sky Force home game and had a grand time.
There seem to have been at least two problems with the NBA's plans to create a baseball-esque minor league system. First, each NBADL team is currently affiliated with up to four NBA teams, none of which have hiring and firing control over personnel. Second, there is very little track record of players going on to NBA careers as a result of playing selfless team ball in the NBADL. Both of these result in NBADL coaches and players having conflicted incentives, at best, when it comes to working with, developing and cultivating the prize young talents sent to them by NBA franchises.
Danny Ainge has given this as a reason he changed his mind about optioning Gerald Green to Florida, despite Green's crying need for playing time. Danny's opinion when he pulled Green out was that play in the NBADL was so self-promotional and lacking in team offense or defense that Green was losing his good habits and learning bad ones during his time there. With no control over the coaching staff or the other players on the roster there wasn't much Danny could do about this.
Baseball's minor leagues work in part because the coaching staffs are all hired and fired by the parent team, who gives them strict and specific instructions about how to play and develop which young players. The young players know how much communication goes up and down the chain of command and so have an incentive to perform well and also be good soldiers. The long track record of the minors as a pathway to professional success makes people more willing to buy in to the system.
When a committee is responsible, no one is responsible. One step towards giving the NBA a more effective development league would be to give each team its own farm club, with absolute control over personnel and roster moves. Expanding the NBADL from 8 to 16 teams would be a step in this direction.
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This is exactly what I've brought up time and again in our pre-blog days. A true minor league for the NBA makes perfect sense, particularly for kids who may not be cut out for college ball. But you've got to do it right -- by following the MLB model.
As B points out, the concept of using the NDBL or any league as a feeder to the NBA is bass-ackwards unless you have a minor league outpost for each NBA team.* The whole point of a minor league system is to be able to get players when they are young and help develop them. In order to do that, you have to completely control the process. But since it has been in existetnce, the NDBL has mostly served as a breeding ground for marginal talent, where fringe guys who weren't good enough to make it into the NBA try to demonstrate that they can play at that level in hopes of getting their shot some day. In order to get that shot, they have to stand out from the crowd. And the best way to do that is to prove how much better than everyone else you are night in and night out. In other words, put on a show for the random scout or executive who may be in the stands. No wonder NBA teams don't want much to do with the league. Other than Greene, I can't think of a single big name player who has spent time there.
So the question isn't why an NBA club wouldn't want to use an NDBL team as a "minor league" affiliate. The real question is why they wouldn't want their own minor league team that they can completely control? As B points out, if you control the process, it's a much more useful tool. You have coaches and executives who evaluate players for you every day, not just on the day they happen to be there. They can also work on both team play and individual skills to help develop players. And furthermore, it's a place to spot young talent in the other areas of your business (marketing, coaching, etc.)
The issue can't be money. I'd bet you could run a minor league basketball team poorly and lose less money than you give to an average lottery pick. Most players wouldn't be draft picks with big contracts --they would still be the same guys who are in the current NDBL. The coaching staff and marketing people wouldn't cost all that much. And there are plenty of localities in the US that would easily support a NDBL team. A quick look at the top Nielsen TV markets in the US shows lots of potential localities in the top 60 markets that don't have an NBA team, or could easily support a minor league franchise in addition to their NBA team. For example, Tampa and St. Louis, two top 21 markets, don't have pro franchises. Neither does Las Vegas (48), Buffalo (49) or many other towns that could easily support a minor league team. Plus there are cities like Boston. Put a the C's minor league team in Manchester or Worcester or Lowell or Providence or Hartford. You wouldn't be taking away from the Celtics. If anything, you'd be bolstering the product -- a chance to see tomorrow's stars today.
Anyway, it seems clear to me that it's a simple solution, and one which the NBA could probably arrange simply by deciding to set aside a small portion of league revenues (say from the internet or something like that) to help fund the minor league system. So why don't they just bite the bullet and do it?
*By the way, I do acknowledge that NFL Europe is a very successful minor league entity, and that it works more like the NDBL than MLB's minor leagues. But I would suggest that the structure of football is very different from the other sports, and you can't prove yourself or excel without working within the team concept in football.
MMazz asks the very good question of why the league hasn't already set up a minor league system already. I suspect two answers lie with the owners and the players union.
For many owners, a minor league system would represent a guarunteed cost increase that is far from guarunteed to pay for itself. Since only half as many CBA and NBADL teams currently exist as would need to in our hypothetical league its an open question whether such a league could pay for itself. For the individual owner it also would not be clear that this cost would increase the revenues or competitiveness of their individual team. More likely, a successful minor league system would increase the quality of play across the league as a whole. A rising tide lifts all boats, and whatnot. Lots of owners are going to be less than enthusiastic about a proposal that invovles guarunteed costs, uncertain revenues, and no particular advantage for their franchise.
The players union is also going to be very wary of this and (accurately) perceive that many owners will want to use this to circumnavigate the CBA and undermine the collective bargaining power of players. Like all unions the NBA's work to protect their interested of their current members, not their potential members. They will fight like hell to keep establish veterans from being demoted, to establish priviledges for drafted players, and generally try to restrict roster flexibility by parent clubs. In fairness, MLB has faced all these issues and come to seemingly successful compromises on each.
Following the MLB model, I think it's pretty clear that a modest number (say, oh, about 30) of well run minor league franchises would more or less pay for themselves. Baseball has 3 affiliates per team, plus independent leagues. Most players make peanuts, compared to the few blue chip prospects who get signing bonuses (or in the NBA case, first round contracts). Everywhere along the line, your costs for this are pretty low. And as I mentioned, the NBA, like all leagues, is generating new revenue streams from things like the internet, etc. Why not divert that league revenue into a pool which teams can use to help pay for their minor league teams, should they run into the red? But as I said, I think that's a red herring (no pun intended) regardless. Even the NHL has a minor league system, and they don't have a TV deal with a real network.
As for the players association, this should actually increase the number of NBA jobs, as young players could get time in the NDBL and provide veteran minimum roster spots for older guys. Furthermore, a system like the MLB one which B mentioned would ensure that no veteran could be demoted to the NDBL against his wishes.
Frankly, the only reason I can see why the league doesn't do this is they don't think it will help improve their product all that much. They must not think that a minor league team system would increase interest in the NBA, and they must not think that the opportunity to develop talent in a minor league system would significantly improve (or help develop) players at the pro level. And I happen to think they're dead wrong on both counts.
We may just have to agree to disagree about the incentives different parties have with respect to a minor league system.
On the economics:
Just because there are tons of minor league baseball franchises doesn't mean that 30 minor league basketball teams could operate profitably in this country. The best reason to be skeptical on this point is that 30 such profitable teams don't exist now. If it were so easy for them to make money on a stand-alone basis, why haven't more capitalist money-grubbers started up new leagues?
My (superficial, unresearched) sense of the economics of minor league basketball is that TV revenues are almost non-existent, merchandise is small potatoes, and that ticket sales make or break teams. NBA teams realize these revenues in the reverse order of importance. So the biggest question facing minor league teams is whether they can get people to come to the games. This is very hard to predict, and has a lot to do with the local execution and skill of your marketing people. In general, investors don't like putting their money into those sorts of dodgy situations. They want to hear that even quasi-incompetent people could break even, the market is so good and growing so fast. Most of the owners of current NBA teams have bought into the league in recent decades because it is almost impossible to lose money owning a franchise unless (like Mark Cuban and Paul Allen) you set out to do so. Some owners, like those of the Celtics, bought their teams almost entirely with debt and absolutely need to make money to make their finance payments.
Your proposal is to divert revenue from other sources (e.g. the internet) to subsidize the minors, presuming they are unprofitable. This makes a lot of sense to me. At the same time it concedes that the individual owner still loses money through the creation of a minor league system, assuming they could otherwise pocket this internet revenue happily and go home. Some owners may already be counting on spending this revenue in other places, say if they just spent the most money in history on a professional sports franchise by taking out lots of bank loans.
The challenge with brokering a deal with the players association is that they are not going to want to bring NBADL players into the fold unless they are granted all the same benefits of NBA players. The players union is going to fight like hell to keep the owners from watering down the achievements of thrity-something years of collective bargaining. At the same time, extending the benefits of the CBA (esp. salary scales) to NBADL players is definitely going to make a minor league system VERY unprofitable. Now it's even more unattractive to owners.
I might re-phrase the point you make in your concluding paragraph. I suspect lots and lots of people around the league would grant that a functioning minor league system has a great chance of improving the quality of play in the league. They might even grant that improved quality of play will lead to some uncertain increase in league revenues above what would happen anyway (although this will be a hard argument to make). The problem is that it is in no individual's rational self-interest to make this happen. Rather, lots of people will see a proposed minor league system as a source of guaranteed costs and/or risk with only potential, ill-defined, far-off future benefits that presumably would be shared by all somewhat equally. That's a receipt for inaction and stalemate. It's also I suspect why you've seen the commissioner’s office be the only people taking this idea seriously in recent years. Almost everything that's been accomplished to date has resulted from the commissioner negotiating concessions out of the owners and the players union as part of a quid pro quo involving some completely separate matter.
I suspect lots and lots of people around the league would grant that a functioning minor league system has a great chance of improving the quality of play in the league. They might even grant that improved quality of play will lead to some uncertain increase in league revenues above what would happen anyway (although this will be a hard argument to make). The problem is that it is in no individual's rational self-interest to make this happen. Rather, lots of people will see a proposed minor league system as a source of guaranteed costs and/or risk with only potential, ill-defined, far-off future benefits that presumably would be shared by all somewhat equally. That's a receipt for inaction and stalemate. It's also I suspect why you've seen the commissioner’s office be the only people taking this idea seriously in recent years. Almost everything that's been accomplished to date has resulted from the commissioner negotiating concessions out of the owners and the players union as part of a quid pro quo involving some completely separate matter.
I don't think we have a collective action problem here (i.e., that it is in no one person's rational interest to address the problem). Sports leagues and unions are forms of joint ventures designed to address collective action problems. I think the problem is -- as you suggest above -- the returns on the investment required are altogether too meager and speculative for anybody to want to spend the money on it.
The NBA has had a well-functioning minor league for years. It's called the NCAA, and it has the advantages of being state-subsidized and self-supporting. Also, it avoids paying its players. I suspect that the NBA is reluctant to induce more players to leave college for the jobs that would be created by a larger minor league. Quite apart from the economics involved, this would cause no end of political trouble for the owners.
I'm hoping R.M. will chime in on this topic.
Interesting post. I'd point out two things.
First, for much of the 1990's, the Continental Baseketball Association (as the highest non-NBA pro league in America) had 16 teams. They were independently owned and operated, and they were profitable -- without the marketing muscle of the NBA to support them. And, for the most part, they weren't in cities like Las Vegas or Providence -- areas that probably would get decent small TV/radio deals in addition to their ticket sales. Given where the current NDBL and CBA teams are located, I think they could easily expand to 30 teams. In fact, the only reason I think they haven't done this so far is that they're concerned that decent minor league basketball at affordable prices might keep people away from NBA games. But as minor league baseball has shown, that's a fallacy. People might enjoy going to the PawSox or Spinners, but there's no subsitute for a Sox game.
Second, I don't believe I suggested a specific salary structure for the minor league. But I don't think you need to bring the NDBL players into the NBA players association at an NBA scale salary. How does it work with the current NDBL players? I assume the NBA does what MLB does -- pay the schmoes struggling in the minors virtually nothing, while still paying the NBA contract guys their full salaries salaries. If you need to work out an additional system of call ups and demotions, 10 day contracts and the like, that's small potatos. And that's just to help fill out the NBA roster. Frankly, NBA teams wouldn't even have to replace roster slots if they didn't want to. Given how many players teams carry right now, you could just carry one or two fewer players. Or if teams wanted to, they could sign players to minimum contracts, either for a season or short lengths of time.
In short, I don't see that those economic issues present that big a problem.
I think T.S. hits the nail on the head in his post. The reluctance to form a NBA minor league is due to the NBA's reliance on and relationship with the NCAA. Other countries (in Europe) have club systems that feed players up to the pro ranks. Here, it's our schools.
The irony in this is that a club or minor league system actually has incredible benefits for a savvy pro team. Identify talent young, develop it, and plunk it into your pro team. If the NBA adopted a system like this (signing kids out of high school, putting them into minor league teams) the Knicks might have a chance in 4 or 5 years, given Isiah's drafting record.
Final post of the evening. In discussing profitability, take the example of Major League Soccer. There are approximately 12 teams in the league. They play approximately 30 games a year, with ticket sales for most teams in the 5,000-10,000 per game range. They likely have negligible income from their TV and radio deals. And yet, they pay their top performers six figures a year (I think the max deal in the league right now is a half million), and most of the rest in the mid 5 figure range.
They play about half as many games as a minor league NBA team would, probably draw a similar number of fans, and are more or less commercially viable.
I'm not suggesting that MLS is ready to expand to 30 teams -- for the record, there are only 12 right now. But I think that's due to the overall interest in the sport in this country. The NDBL has a built in base -- the average fan who can't afford to sit courtside at an NBA game.
I don't think you need to bring the NDBL players into the NBA players association at an NBA scale salary. How does it work with the current NDBL players? I assume the NBA does what MLB does -- pay the schmoes struggling in the minors virtually nothing, while still paying the NBA contract guys their full salaries salaries. If you need to work out an additional system of call ups and demotions, 10 day contracts and the like, that's small potatos. And that's just to help fill out the NBA roster. Frankly, NBA teams wouldn't even have to replace roster slots if they didn't want to. Given how many players teams carry right now, you could just carry one or two fewer players. Or if teams wanted to, they could sign players to minimum contracts, either for a season or short lengths of time.
There are all sorts of ways you could set up the salary structure of a minor league system that would make owners happy. The problem with what you propose here is that the Players Union would never go for it and without the Players Union on board a minor league along the lines of what you envision is dead in the water. Things like carrying less players on NBA rosters, 'just' letting owners sign players to minimum contracts, etc. will cause the union to go nuclear. I would put large amounts of money on the union shutting down the NBA before they allowed this to happen. If they did, they might as well dissolve and stop bargaining collectively. What good is it anyway if can't even protect your job or your pay?
In discussing profitability, take the example of Major League Soccer.
I am increasingly leery of using MLS, MLB, or other sports leagues as comps for an expanded NBA minor league because I haven't seen any actual data or analysis on any of these. And without data we're all just talking out of our ass.
I will point out that just based on what you posted we can note that MLS enjoys attendance that is between 2.5-5 times that of either the CBA or the NBADL. (From the original article linked their attendance averages ~2K and ~2.5K). From a business perspective, these are pretty big multiples to see in your primary source of revenue. Does that indiciate that minor league basketball would be unprofitable? Beats me.
I have read somewhere that the two big groups buying tickets to MLS games are latino communities and parents of youth soccer players. I'm not sure that such strong sets of latent customers are sitting out there waiting for minor league basketball. I'm not sure that people who can't afford to watch T-Mac will pay less to watch a bunch of less talented chumps. I'm not saying it wouldn't be profitable, but I'm not sure we have reason to be as confident as you've been here.
RE: Minor league basketball
This will be my final post on this topic (unless I'm provoked).
The obstacles you raise regarding the Players Union are non-starters. While I agree that any official minor league system requires negotiating with the PA, I never suggested there would be lost jobs. Rather, I suggested that there would be either stagnant NBA jobs or increased NBA jobs. To wit: if you're shuttling players up and down from the NBA roster, people with guaranteed NBA contracts aren't going to see those evaporate just because they do a stint in the NDBL. They're still guaranteed. So the total number of NBA guaranteed contracts is at least the exact same. But many if not all teams will want to have the option to replace those bodies on their active NBA rosters. Hence, the total number of NBA jobs would actually increase, even if it's only a bunch of players signed to veteran minimum or limited-time contracts. (That's what I was referring to when I mentioned "veteran minimum contracts" in the previous post.)
Second, regarding comparisons to MLS and various other minor leagues, I think we all understand it's like comparing oranges to tangerines -- similar, but not quite the same. And of course, none of us know what the bottom line for any of these entities look like.
But for the sake of argument, consider that an average MLS team carries 22 players and plays 30 games per year, not including playoffs. Let's say they play to crowds in the 10,000 range, which would be the upper end of attendance figures from what I understand. We're talking about 150,000 home fans per year per team, or roughly 6800 fans in attendance per player.
Your attendance figures for the CBA were 2,000 or so per game. CBA teams play 54 games per year, but let's call it 50. That's 50,000 home fans per team. If an average team carries 12 players, that's 4166 home fans in attendance per player. If you bump the attendance figures up to 2,500 over 54 games, that's 5625.
I'm not suggesting that these are equivalent. We don't know median ticket prices; we don't know media deals, leases and concession issues; and we don't know whether going to, say, 60 games or 70 games would be untenable for NDBL fans. But I would suggest that that's a healthy number of fans per player, particularly given that the median MLS salary is reportedly $90,000 (and I suspect the median CBA salary is much lower).
I guess the point is this -- we can debate all day long about the revenues, and the truth is that none of us really know. (I mean, how much does MLS make on it's advertising and broadcast deals? How many fans would the NDBL attract if the NBA put its marketing muscle behind the league? The questions are endless.) But I'm willing to bet that the average NDBL team wouldn't run more in the red in any given year than an end-of-the-first-round draft pick. And is there anybody who thinks that's a make or break issue for NBA owners?
Apropos of college basketball as an effective substitute for minor league basketball:
Next season, when the N.B.A.'s age requirement increases to 19, the D-League plans to lower its limit to 18 so players wishing to bypass college will have an alternative.
Players who can qualify academically will probably opt for a college program that offers more exposure.
"For business reasons, it would be good for us if everyone who didn't come to the N.B.A. went to college," N.B.A. Commissioner David Stern said. "If I had my druthers, this league would be for N.B.A. players who just needed a little more time."
That quote by Stern doesn't make it should like the league isn't too enthusiastic about the business prospects of a minor league system.
That quote by Stern doesn't make it should like the league isn't too enthusiastic about the business prospects of a minor league system.
Well, they'd surely prefer that colleges continue to cover the costs of developing talent to the extent possible. If they thought they could make money on a developmental league, they wouldn't be wishing that their labor force would go somewhere else, so this tends to suggest that the minor league is a cost, not an investment with substantial expected rewards. (On the other hand, I've already pointed out that the NBA would be inviting political trouble of the first order if it were seen to be competing with the NCAA, and the week of the Final Four really is not the time to open that fight.)
But, having decided to have a developmental league, I would wager that the league's lawyers told them that they could not discriminate against certain talent on the basis of age. What we need is an antitrust lawyer to explain why.
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