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If Pro Sports Were Actually Run Like A Business..

Five years after the Seattle Supersonics became the Oklahoma City Thunder, Seattle appears poised to “pay it forward” by swiping the Kings from Sacramento. While nothing is ever official with the Maloofs until every last I is dotted and T is crossed, they are reportedly close to selling their franchise to a group of Seattle-based investors for $500 million dollars. And even if the people of Sacramento can pull one last rabbit out of their hat, Seattle will eventually get its hands on one of the NBA’s 29 other franchises, unless the league decides to give them an expansion team.

Franchise relocation is a race to the bottom that pits city against city, which owners of all four major professional sports leagues in North America have used to their benefit. Everyone knows investing hundreds of millions of dollars in a stadium is a terrible use of taxpayer resources, but when owners can credibly threaten to move without them, what other choice does a city have? While professional sports will always be a business, it’s high time to re-evaluate how this “business” actually works in the United States.

You might notice, for example, that European soccer clubs aren’t constantly extorting their home cities in thinly-veiled money grabs. You can’t threaten to move if there’s nowhere to move to. In every significant European city, there’s already at least one firmly established club with a relationship to its community that goes back decades, if not centuries. FC Barcelona can’t move to Madrid anymore than UCLA can move to San Francisco.

In contrast, the NBA, NFL, MLB and NHL all keep a firm limit on the number of franchises, artificially limiting the supply in order to boost the demand. According to the last census, there are 51 metropolitan areas in the US with more than one million residents. Two of the NBA’s most successful markets, Oklahoma City and Salt Lake City, check in at No. 43 and No. 48 respectively. As long as there are more cities interested than available franchises, owners will always be able to find a bigger sucker.

Why are there only 30 NBA franchises anyway? There’s clearly no shortage of cities interested in professional basketball. In the last year alone, the Maloofs have flirted with Virginia Beach, Louisville, Las Vegas, San Diego, Kansas City and St. Louis. Three -- Kansas City, Las Vegas and St. Louis -- have modern arenas that could seat upwards of 15,000 people and support a team tomorrow. All that’s missing is a professional team for those communities to watch. If pro sports were actually run like a business, they would expand to satisfy demand for their product.

Of course, having 40+ NBA franchises is hardly practical. The league benefits from having the top players concentrated on a few elite teams, while the quality of play would be harmed by adding another 150+ players. However, the distribution of talent in basketball is pyramidal. The difference between LeBron James and the #300 player in the world is immense; the difference between player #300 and #500 is fairly marginal. The NCAA “graduates” thousands of basketball players every year; there’s no shortage of players capable of putting together a product people will pay for. There are a lot of extremely popular D1 basketball programs, maybe a handful can offer more than NBADL-quality basketball.

It wouldn’t be practical to have 40+ franchises competing for the same championship either, but that’s a problem sports leagues all over the world, as well as the NCAA, have long since figured out. There are 32 conferences in Division I basketball and a lot more in Division II and III; there are five national soccer leagues in England, from the Premier League all the way to the Conference National. The stakes in the Missouri Valley Conference aren’t as high as they are in the SEC, but don’t tell that to fans of Creighton, Wichita State and Bradley. For mid-level soccer clubs, winning the UEFA cup is as big an accomplishment as winning a Champions League final.

As a result, European sports clubs and college athletic departments are subject to market pressures in a way American sports teams aren’t. The Maloofs have done a remarkable job of depressing interest in their franchise over the last decade, yet their stewardship of the Kings will soon net them hundreds of millions of dollars. NBA owners complain an awful lot about yearly profit margins when owning an NBA team is one of the most fool-proof investments in the world. If only there were only 30 houses in the US, it wouldn’t matter how poorly you maintained it. You could burn it to the ground and still make a killing. That, actually, is a pretty decent analogy for what’s happened in Sacramento.

But while the economic structure of the NBA is built on a rotten foundation, it’s probably too late to change course now. The owners would never consent to a system of relegation that actually forced them to run their franchises like businesses. If they aren’t allowed to make a profit in both the short and long-term while adding zero value to their investments, they have more than proven their willingness to take their ball and go home.

Any change will have to come from outside the existing power structure. Soccer is the most popular sport in the world, but it has never established a firm foothold in the world’s richest country. If the MLS wants to become are popular as the EPL, a good first step would be structuring itself in a similar manner. Create a system that rewards the most well-run teams and punishes the worst, one designed to respond to market pressures, not subvert them. There are millions of people alive today who remember when boxing, horse racing and baseball were the country’s three most popular sports. Look what Dana White has already done with MMA: these things can change a lot faster than you might imagine.

At the end of the day, sports are a societal construct without any inherent meaning behind them. The NBA Finals are only as important as the number of people who decide to care about them. Otherwise, it’s just 10 really athletic guys in tank-tops running around a hardwood floor trying to throw a ball through a cylinder raised 10 feet in the air. An NCAA Tournament appearance means as much to a low-major school as a Sweet 16 berth does to a mid-major school and a Final Four does to a high-major school. Fans decide what’s important and make it so, not the other way around.

The stands, not the field of play, are what makes sports great. In a society where people are becoming increasingly more isolated from their neighbors, sports are one of the only things that still bring them together. It’s the glue that holds together relationships, between a community and its residents, a school and its students and between fathers and sons. That’s what Seattle basketball fans were robbed off five years ago and what Sacramento could be losing now. There is a better way.

 

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