Tuesday, October 27, 2009

Paternalism and "Massa" Stern

Today's New York Times has a piece by LBJ biographer Harry Gerard Bissinger III (also known as Buzz and author of Friday Night Lights) describing how we "got punked" by Massa Stern that is well worth reading.

Bissinger's piece displays a shrewdness which affirms his status to be the Kissinger of sport journalists. (I'll understand if you can't get past the paragraph that starts... "If David Stern truly cared about his players’ well-being...")

As BB argues, the age limit on players entering the NBA is obviously a bad policy: it simply takes the rents the players could have earned on their exceptional talents and distributes it to the NCAA. The puzzle for me is, why is the the NBA interested in subsidizing the NCAA?

There was one other place we got punked by Massa Stern and his paternalistic attitude to the NBA players: The NBA dress code.

Why do the players agree to this nonsense?

1 comment:

Bhel Atlantic said...

My colleague Earl da Goat, in his post above, wants to know why the NBA is happy to re-distribute the rents from young players to the NCAA.

As Bissinger notes in the article, the NBA benefits from drafting proven talent with an existing popular following, rather than nobodies from rusty gyms in the Mississippi Delta. Of course, without the age rule in place, no GM wants to be the guy who misses out on the next Garnett, so he feels compelled to take the risk. The age rule in the collective bargaining agreement solves the coordination problem and achieves an outcome that is better for all teams. (It seems to me that a similar problem bedeviled Wall Street in recent years; traders, fund managers, etc. felt compelled to take on more risk to keep up with the Joneses [or the Goldmans] even as the collective volatility of portfolios became untenable.)

Additionally, it is not even clear that the NBA loses anything economically from forcing Derrick Rose, Kevin Love, etc. to delay their entry into the league by one year. Despite the extra mileage on their wheels from the college games, the players will likely play the same number of pro seasons as they counterfactually would have without college; everyone feels he is entitled to "get paid" a certain amount. Jersey sales and other merch will likely be the same over time, even discounting the cash flows.

As for "Why do the players agree to this nonsense?" have you ever heard of negotiation, Earl? You give some, you get some. In the last round of bargaining in 2005, players received a bigger cut of revenues and the NBA won shorter contracts (as well as the age limit and dress code).