The Middle Class Struggle
With worldwide interest in basketball growing rapidly, the talent pool of professional basketball players is larger than ever before. Foreign players made up a record 13.5% of NBA players last year. International leagues aren’t just producing better players; they’re also home to Americans who would have made the NBA a generation ago.
Even if you think the top 450 players in the world are all in the NBA, there’s no reason to think there’s a bright dividing line between the skill levels of player #450 and #451.
However, there’s a huge gap in how they are compensated: the NBA player has a guaranteed contract, a minimum yearly salary of at least $400,000 as well as first-class travel accommodations, world-class training facilities and access to a pension plan. In contrast, players in even the elite European leagues can be cut without reason in the middle of the season and often have to fight in court for years for unpaid wages.
The biggest beneficiaries of this system are the veteran role players who make up the “middle-class” of the NBA. The Lakers signed Steve Blake to a fully guaranteed four-year $16 million contract last off-season; the Magic gave Chris Duhon four-years and $18 million. Bo McCalebb, an undrafted American player who emerged as one of the breakout stars of EuroBasket 2011, made $1.15 million last season in Europe.
Especially on the perimeter, role players who don’t dominate the ball offensively are very replaceable. There are a lot of guys who can play defense and knock down open jumpers; often it’s a matter of luck whether they ever get a chance to play in the NBA.
Raja Bell was one of the elite defensive players of the last decade, but he wasn’t drafted out of college at Florida International. Bell was signed as a rookie free agent and cut by the San Antonio Spurs in 2000, pushing him into the minor leagues of professional basketball. The Philadelphia 76ers noticed him playing for the Yakima Sun Kings of the CBA, and signed him to deal in April 2001.
Despite playing limited minutes in the team’s final five regular season games, he was given a chance to crack the playoff rotation for an undermanned 76ers team that managed to eke its way to the NBA Finals. That post-season exposure gave Bell his foothold in the league, and he’s gone on to make nearly $30 million dollars.
The reason players like Bell, Blake and Duhon are able to make so much money is because the 1999 CBA set an arbitrary cap on the amount of money the league’s top stars can make, redistributing wealth downwards. Many people around the NBA believe LeBron James is worth $50 million a season on the open market; the difference between that number and his near max-salary of $16.2 million is what has created such a wealthy middle class of role players.
That’s the issue at the heart of the lockout. The owners, after squeezing money out of the league’s young players through a rookie wage scale and its top players through max contracts, are still trying to maximize their profits. The most tempting target left is the middle class, which would effectively be eliminated by a hard salary cap or a luxury tax so punitive it has the same effect.
As Billy Hunter warned the players right before the lockout began: “The owners plan would decimate the middle class, with teams using the bulk of their hard cap room on star players. General managers are far less likely to give players guarantees in a hard cap system because, without the benefit of the Larry Bird and other existing exceptions, they will need to leave room to re-sign key players and sign other players in future years.”
That’s why Players Association VP Maurice Evans was so adamant after the latest failed round of negotiations: “The economics [of the BRI split] mean nothing if the wrong system is in place.” Evans, the prototypical role playing shooting guard, has made over $13 million in his career, and he wants to protect the system that made that possible for the next generation of players.
From a broader perspective, the players union is on the vanguard of a struggle American labor has been fighting for over a generation. A few top performers generate the majority of the value in their industry, while the salary of the average NBA player, much like the average blue-collar employee, is increasingly under attack from lowered trade barriers and increasing international competition.
Pitted against ownership with vastly deeper pockets, the players only real chance to gain leverage is through the federal government and the complaint they filed with the National Labor Relations Board a few months back. But few expect much help to come from Washington, not with the NLRB hamstrung by a lack of appointees and ownership willing to drag out any legal battles for years.
As a result, the owners appear likely to extract vast concessions out of the union whenever the lockout ends. They would love to lower the barriers on labor movement, creating a market where Steve Blake would have to shop for a contract between bidders from all over the world, and where the Lakers could cut him tomorrow and not be saddled with the burdens of their poor decision-making for the next three seasons.
However, they should remember that the benefits of a free market can go both ways. Squeeze the NBA’s middle class too hard and the owners might see the downsides of a European sports system where Cristiano Ronaldo and Leo Messi make almost $40 million annually, making a La Liga title all but impossible for everyone but Real Madrid and FC Barcelona.