Re: NBA - land of greed?

[Jim McMaster <mcmaster@sweng.stortek.com>]

In message <33F0C686.46FEF6ED@channel1.com>, Phe Meas said:
> After reading the article about Garnett's rejection of the 6-year $102
> million contract, I began to worry. How long can this go on???? Salaries
> are increasing too much. I think there should be a limit on how much a
> player can be paid. If nobody stops it, ticket prices will multiply very
> rapidly.
> 
The short answer is, it will go on as long as the owners can still make a 
profit.  A limit on salaries is called "restraint of trade", and is illegal 
under the anti-trust laws, unless the players agree to it.  The veterans were 
willing to agree to it on behalf of rookies not yet in the league, but just 
try to limit their salaries, and watch the lawyers get rich.

Salaries have nothing to do with ticket prices.  There is a certain price 
point at which the owner receives the maximum income from ticket sales.  Any 
more, and people stop buying tickets.  Any less, and he is giving away 
tickets to fans who are willing to pay more.  Owners try to charge this magic 
price, irrespective of the costs of running the business.  If fans are 
willing to fill the arena at $500 per seat, why would the owner charge less?  
If his payroll averages $400 per seat, he makes $100 per seat profit.  If his 
payroll is $100 per seat, he still will not lower prices by $300 per seat, he 
will just pocket the difference.  If his payroll is $600 per seat, he will go 
broke...if he raised prices to that level, he will have a lot of empty seats.

Having a Michael Jordan on the team can raise the ticket price.  Since more 
people want to buy tickets to see him, the demand goes up.  This price goes 
up, not because MJ is getting $30-40 million, but because people are willing 
to spend more to see him.  If that were not true, the owner would not be 
willing to pay him that much.

> The greediness is very contagious! Even players who are not greedy will
> be affected by this "madness". e.g: If Travis Knight, a backup center,
> can get $3 million a year, why can't Walker, a starting forward, ask for
> $10-$15 million a year?
> 
"Greed" = "Capitalism".  If some schmuck of an owner is willing to overpay a 
player, why should the player take less?

> I think, we, as fan should put an end to this by not going to anymore
> games, not buying any NBA merchandise including sneakers endorsed by
> players. We should just watch the game on TV.
> 
That is the only answer, but I suspect the NBA is a long way from that point. 
 We fans are still willing to pay their prices, and an attempt to boycott is 
unlikely to succeed yet.

The NBA still has not tapped pay-per-view in a serious way, but that is 
probably their last serious source of cash.  When they make it so only the 
wealthy can afford to see games, the mass fan base will disappear and the 
whole structure will come crashing down.  I will be sorry when that happens, 
but I do not see any other outcome.
- -- 
Jim McMaster
mailto:mcmaster@sweng.stortek.com