On the Sixers, the salary cap, and Kevin Durant – Philly.com (blog)
Salary caps are supposed to be the great equalizers, egalitarian mechanisms enforced to prevent big-revenue teams such as the Lakers and Knicks from purchasing their championships on the open market. We use the term “big revenue” instead of “big market” because sports are increasingly becoming a national game, lessening the deterministic significance of a team’s local market.
In some respects, this has always been the case. Bill Giles famously labeled the Phillies a small-market team before the Phillies became the team that spent more money than everybody else and made everybody else resent them for that. What he probably meant was that the Phillies were in an unattractive market, for a variety of reasons for which there was no short-term fix. Most of these reasons were the result of a failure in foresight on the part of ownership, but we’re not here to dredge up those issues again.
The Phillies of the ’90s are a pertinent place to start when considering the Sixers’ uncertain standing in the medium- and long-term economic future of the NBA, a future that we can begin to project now that The Process has finally entered its next stage.
Things happen fast in the NBA, and you always got the sense that it was going to hold true for the Sixers. In one offseason, they landed the potential superstar they sought and added — effectually, anyway — a well-regarded international player with big upside, giving them two current and long-term starters to add to a show-me-what-you-got mix of big men that could yield a third member of a present and future core (it remains to be seen whether that player is Joel Embiid, Jahlil Okafor, Nerlens Noel or somebody acquired for one or two of them).
Based solely on homegrown talent, the Sixers will be plenty interesting to watch over the next few seasons. Yet the stated goal of The Process was always an NBA title, and after a week in which one of the best regular-season teams in league history went out on the free-agent market and added one of the top three players in the NBA, it is worth wondering how the Sixers might ever hope to achieve that goal given the stratification of talent that continues to occur across the league.
The NBA is probably the most fascinating economic landscape in sports because of a unique mixture of variables that leaves its regulators playing whack-a-mole when addressing issues of inequality. For a good primer on the macroeconomics of the sport, I recommend this piece from the Atlantic written in the wake of the Durant signing. The laymen’s version of it is easy to decipher just by looking at real life. The league’s “maximum deal” structure effectively funnels money away from elite players and redistributes it to players in the middle of the bell curve.
The Cavaliers are a good example of this. Last year, LeBron James made $22.9 million in base salary, while Kevin Love made $19.6 million in base salary. So the Cavs spent $42.5 million on those two roster slots. Call them Slot A and Slot B. In a structure that did not cap the salary of either of those two individual slots, the Cavs would have been forced to decide the most productive way to divide that $42.5 million between Slot A and Slot B. Anybody who watched the NBA Finals knows that their decision would not have been 53 percent for LeBron and 47 percent for Love. Given the bidding war that would have erupted, there’s a good chance it would have been 100 percent for LeBron, forcing Love to look elsewhere for the type of money he made in Cleveland, meaning Love would currently be on another team, meaning the distribution of talent across the league would have flattened. Play this out on a large scale and the result is obvious.
The NBA’s salary structure has virtually eliminated the effect of local market size on the eventual landing place of the NBA’s elite. Just look at the signings we’ve seen over the last two years: San Antonio and Cleveland are two of the smaller markets in the league, yet they landed LaMarcus Aldridge and LeBron last season. San Fran/Oakland is a Top 10 market, but it is nowhere close to New York and L.A. Because an elite player’s non-basketball earning potential isn’t greatly impacted by the visibility a bigger market can bring, it isn’t a surprise that we’re seeing these players prioritize an organization’s ability to get them a championship when they make their decisions on where to sign.
Really, this is the underlying foundation of the “tank” philosophy that has riled up everybody over the last two years. It is becoming increasingly apparent that the best way to attract a marquee free agent isn’t through money or facilities or geography, but through pre-existing talent, such as the Spurs, Warriors and Cavaliers all had at the time they landed their free agents.
Whether that is a good thing or a bad thing from the Sixers’ perspective depends on how you look at it. As the Phillies showed us, Philadelphia is a big enough market that a deep-pocketed ownership group that gets a few seasons of big ticket revenue and lands a big local TV deal would have the funds to outspend much of the rest of league. On the flip side, as it stands now, if Ben Simmons turns out to be a centerpiece player, it might not matter that Philadelphia is not currently viewed as a destination city for free agents.
Really, it all comes down to Simmons (unless Embiid really is poised to shake off his early-career injury problems). The Warriors were no better a market before Steph Curry turned into an MVP. This is still Oakland we are talking about.
In some ways, Durant’s signing reinforces the imperfect but necessary wisdom Sam Hinkie followed with his Process. The economics of the NBA require that a championship hopeful acquire a centerpiece player through some other method besides free agency. The question now is whether Simmons is that player.
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