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The NBA Is Losing Its Competitive Edge

Matthew Epps, a Spring 2010 J.D. Candidate (like me) from Villanova University School of Law (unlike me), just received a high honor entering his third and final year of law school; he was published in his school’s Sports and Entertainment Law Journal.  His piece: FULL COURT PRESS: HOW COLLECTIVE BARGAINING WEAKENED THE NBA’S COMPETITIVE EDGE IN A GLOBALIZED SPORT (16 Vill. Sports & Ent. L.J. 343).

My reading of Matthew’s piece is at a very apropos time.  I just placed my first basketball client overseas, and earlier today, discussed a possible NCAA rule change that would allow high school graduates to play professionally overseas and retain their student-athlete eligibility.  I believe that the rule change would open the NBA up to even more competition against the international market; athletes will be more comfortable with traveling across the ocean to play in a foreign country if they have previous experience playing there before college.

Matthew’s premise is that basketball competition overseas is now credible, which serves as a big threat to the NBA under its current collective bargaining agreement (CBA).  The The Union of European Leagues of Basketball (ULEB) and its exclusive Euroleague have been able to acquire strong talent from the United States in the past few years.  While the NBA does not allow any athletes under the age of 19 to play its game, FIBA (the entity in charge of creating rules and regulations in Europe), allows 18-year-olds to play in the ULEB.  FIBA does not regulate player contracts or salary caps, but teams may be bound by their country’s or European Union’s labor laws.  No salary cap means that players will be valued properly…remember rumors of Kobe Bryant considering going overseas…purely because the NBA’s salary cap restricts his ceiling.

Other benefits of playing overseas include the creativity that owners are able to use to secure players.  They often offer cars, residences, rent, and flights in their contracts.  Sometimes, players are even given the right to become partial owners of their team and can sell advertising space on their uniforms.  And then compare the Euro to the U.S. Dollar.

Meanwhile, the NBA implements a salary cap, allows owners the possibility to have restricted free agents, and tells 18-year-olds ready to play after high school, that they have to wait a year.

Epps says that a free agent transfer agreement with Euroleague is not plausible.  It would be challenged in U.S. and EU courts.  Instead, Commissioner Stern might want to consider expanding into Europe now, and create a few NBA teams across the Atlantic Ocean to compete in an NBA Europe.  I believe that an NBA Europe is an interesting idea, but it would have to be totally distinct from the NBA in the U.S.  Although there could be a “World Championship” between the winner of the NBA Finals and NBA Europe Finals.  That would make for some good T.V.

Another solution: Get rid of this one-and-done rule!

By Darren Heitner

Darren Heitner created Sports Agent Blog as a New Year's Resolution on December 31, 2005. Originally titled, "I Want To Be A Sports Agent," the website was founded with the intention of causing Heitner to learn more about the profession that he wanted to join, meet reputable individuals in the space and force himself to stay on top of the latest news and trends.

Heitner now runs Heitner Legal, P.L.L.C., which is a law firm with many practice areas, including sports law and contract law. Heitner has represented numerous athletes and sports agents as legal counsel. He has also served as an Adjunct Professor at Indiana University Bloomington from 2011-2014, where he created and taught a course titled, Sport Agency Management, which included subjects ranging from NCAA regulations to athlete agent certification and the rules governing the profession. Heitner serves as an Adjunct Professor at the University of Florida Levin College of Law, where he teaches a Sports Law class that includes case law surrounding athlete agents and the NCAA rules.

8 replies on “The NBA Is Losing Its Competitive Edge”

I truly believe that the executives in the NBA need to go back and takes a Macro Economics class. Now no knock on their knowledge or expertise but placing a ceiling on NBA salaries (salary caps) works in a controlled environment to stimulate competition and “protect” owners from holdouts, manipulative play and ultimately bankruptcy (after the need to raise prices, to match expenditures, decreases demand). The problem is the NBA no longer is part of some vacuum and are facing competition that has no restrictions. So if they continue to promote competition within the NBA they are increasing competition and threats from other leagues. The more restricted the NBA environment comes the more creativity and innovation becomes hindered. It is true that competition in the NBA is better than ever (8 seeds are no longer push overs in the first round) but the NBA is hurting themselves on a grander scale. This CBA is going to be quite interesting and it just might determine how big that object, in the rear view mirror, becomes.

I find this similar to what some European soccer teams are trying to do in the MLS. MLS teams can sign an allotted amount of players to contracts that are uncapped that can help build their franchise. In doing so they seek to get international stars (beckam, blanco, montero..and the list goes one) and they only way they can lure them is with creativity and lucrative contracts that can payout better than the restricted cap contracts they are getting. Good article/comments.

By teams.. i mean Barcelona and other teams looked to invest or create an MLS team to progress growing players here in US. which would give players major exposure and chance for great growth on the pitch…but.. with money being tight and USA experiencing tough times..negotiations have been eroded for the time being.

Yeah Darren whole-heartedly agree but that is where the true paradox begins; Increasing competion within the NBA might ultimately hinder the NBA and increase their competition…So here’s the question; would you rather the Knicks be able to get Lebron and Flash at an unmatchable amount or would you rather allow the Olympiacos to make an offer that cant even be matched due to the restrictions in the NBA? hmm I don’t know yet and it’s still too early to see players of that caliber jump ship but as perceptions of those leagues change (i.e more players jumping over after or maybe during highschool) we shall see

I would definitely prefer to see the best American talent stay in the United States…as a fan of the NBA. As an agent, I want the players going wherever makes them most happy. If I have a client who ONLY cares about the money, then my ears are open to any Olympiacos offer.

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