On the Importance of Competitive Balance

Also posted at WagesofWins.com

The first round of the NBA playoffs ended on Saturday night. In eight first-round match-ups the team with the best regular season record won every time. Contrast that with the NHL playoffs where every top seed in the Western conference lost in the first round. The list of losers included the Red Wings, who are the 14th team in the past 20 years to take home the President’s Cup but fail to win the Stanley Cup.

And hockey is not the only place where the regular season best falter in the post-season. In baseball the team with the most wins at seasons end has only taken the corresponding World Series title once in the past ten years. Football’s best do a bit better. Over the past ten years the team on top at the end of the regular season won the Super Bowl three times.

How about the NBA? Over the past fifty years, the NBA champion has been either the best or second best team 80% of the time. If we look at the dispersion of wins in the regular season, we also see – again relative to the other sports – a wider spread in the NBA. Whether we look at regular season outcomes or the playoffs — relative to the other major North American sports — the NBA appears to have a problem with competitive balance.

Competitive balance has been the rallying cry of sports league owners for more than a century. The story has been that leagues without balance will not have uncertain outcomes, and thus fan support will dwindle. Consequently players have been asked to accept rules that limit player compensation in the name of league survival.

If the argument of owners is to be believed, the NBA should be dying at the gate. But this season the NBA set a record for attendance. And this follows the 2004-05 campaign where the previous record was set.

So what do we know? The NBA does appear to have a problem with competitive balance. The NBA does not, though, have a problem with attendance. Could it be that the story owners have told this past century is just another tall tale?

Baseball is scheduled to once again open negotiations with its players. If past behavior is an indictor, Bud Selig will again raise the specter of competitive balance. When this subject arises, perhaps an enterprising reporter could ask “How does the NBA – a league without the benefit of balanced competition – keep setting records at the gate?” And here is the follow-up: “If competitive balance is not necessary for the survival of a sports league, aren’t the rules designed to promote balance just an attempt by owners to take money away from players?

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