The Truth About “Parity” in the NBA

May 8th, 2014

[Originally posted on Hoopsworld, 5th November 2013.] In February 2010, NBA commissioner David Stern spoke ominously of the league’s forecasted $400 million loss that financial year, as well as hundreds of millions more in losses over the previous few seasons. His words were one of the earliest warnings of an impending lockout, a threat that became a reality 16 months later. Financial inequalities and a broken system supposedly saw 22 out of the 30 NBA franchises losing money, and something had to be done to install some parity. Three months after Stern spoke, the NBA ratified the sale of the New Jersey Nets to Mikhail Prokhorov. Parity, it is said, is supposed to level the playing field between the large- and small-market teams. The reality of this market inequality is an unavoidable one, founded in socioeconomic factors far outside of the NBA’s control. It is what it is. The NBA’s self-imposed duty is to level the playing field within its control as much as possible. They do this in various ways. The draft, of course, is one – parity is not just financial remuneration, but also the opportunity for all teams to compete on the court. There is also, as of the new CBA, a new revenue sharing system ostensibly designed to make big brother pay for little brother, a significant development in the NBA’s hitherto limited revenue sharing history. And there’s the concept’s most public weapon – the luxury tax. Since its inception in 2001, $923 million has been spent in luxury tax by 24 franchises. Of that $923 million, some $568 million has been spent by only four of those franchises – the Dallas Mavericks, New York Knicks, Portland Trail Blazers and Los Angeles Lakers. That is one seventh of the teams spending three fifths of the money, […]