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Income Caps Create Unequal Teams

2016 June 6
by Skip Sauer

So argues Daniel Frank in his piece “Inequality in the NBA“.  Here are a couple of his observations:

As American politics gets consumed by discussions on income inequality, a similar problem is developing in the NBA. The NBA has created a hierarchy; super teams with multiple superstars competing for a championship, and everyone else, just watching on the treadmill….

LeBron James has been to the NBA finals six years in a row. Does this represent some sort of skill by Miami and Cleveland, putting them above the rest of the league? Have they done something deserving of this massive level of success? Or are they just lucky to have Lebron James sign with their team. In most cases, the acquisition of elite players is largely dependent on luck….

LeBron James has been to the NBA finals six years in a row. Many people attribute this to him being one of the best players in the NBA, but this misses the bigger picture. Give LeBron James a $53 million dollar salary and he won’t be in a position to be surrounded by stars like Kyrie Irving and Kevin Love (or Dwyane Wade and Chris Bosh) anymore. The max contract allows great players to team up with other stars, making these lucky teams elite.

These are just three snips from an interesting and provocative piece.  Daniel’s argument takes the salary cap as a given, and the income cap as generating the unequal distribution of talent.  This isn’t exactly Sports Econ 101, but it is certainly food for thought.

 

 

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