I think I’d like to make basketball the subject of my inaugural post. You see, I’ve been thinking a lot lately about the negotiations leading up to agreeing on a new collective bargaining agreement. There a lot of points of contention, lots of issues to be hashed out, but the gist of it is that the owners are feeling pinched by decreased revenues owing to the recession, and are looking to cut their personnel costs. This, to sort of stop before I even start, is total nonsense, see here. But what’s interesting to me is the owner claim and proposed solution, not reality.
With a fairly fixed numbers of players per team cutting personnel costs primarily means convincing players to swallow lower salaries. In effect admitting that teams have not, through the usual means of negotiation, been able to control the compensation packages of their employees. The basic problem is that the existing soft salary cap system in the NBA allows teams to go over the salary cap in order to retain players already on the team. When it was initiated, this was meant to allow teams that had one way or another acquired a great team to keep it together. Unfortunately, in practice, it has meant that the teams’ middle management face a lot of pressure from their stakeholders, I mean fans, to hold on to their better players no matter what. Then the salaries for the rest of players are forced up by the inflated contracts.
That is to say that the purported problem, according to a bunch of corporate owners, is that they and a team of highly knowledgeable, motivated managers are incapable of making rational decisions about the compensation of their employees. So, what is the proposed solution? Well, what about a umbrella rule, a kind of financial regulation that would prevent the excessive inflation of salaries by putting an absolute limit on player compensation per team?
Maybe you’ve seen where I’ve been going with this. There is, as it happens, another industry much in the news lately, where the compensation of the employees has famously gotten out of control. Except that whereas in the case of the NBA the players’ compensations have maybe contributed to a ugly financial situation for a couple of teams, in the banking industry, the compensation of inflation of employees salaries has at least continued in spite of the complete collapse of the industry, and quite possibly caused that collapse by a perversion of incentives. What\’s the solution in the NBA? Regulation. But in the banking industry? Oh no, that would cause the FINANCIAPOCALYPSE!
Anyway…as that wasn’t really all that much about the NBA, I’ll just add that I don’t know how the hell this Dallas team happened. That’s just a monstrous team. I’m not the least bit surprised that they’re on a 13-game win streak, and for my money they’re the favorites to win the Championship now. I mean, we’re talking about a team that could plausible go big and put Dirk Nowitzki at SF or go small with him at the C and Shawn Marion at PF.
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