Recently Adam Silver released some statements that had a funny dichotomy. First, the NBA's financial situation is healthy. Second, a large number of NBA are "losing money."
Smarter minds than I have attacked the second point. As Dave Berri and others have been saying for years, unlike other industries the NBA is allowed to cap how much they pay their workers. Additionally, they get a ton of public assistance. If you're an NBA owner and you're losing money, that should be an embarrassment.
However, the tale Adam Silver weaves reminds me of an excellent documentary: "ESPN's 30 for 30: Broke". "Broke" focuses on how a large number of professional athletes lose all their money in a very short amount of time after they retire. The documentary lists lots of ways athletes don't spend their money well including:
- Giving too much to friends and family.
- Engaging in elaborate parties
- Moving into houses they can't afford
- Focusing on flashy and risky investments instead of sound ones
And for those of you that clicked the hyperlinks, you'll discover that, shocker, some NBA teams have similar issues (even those that make money). As we've discussed before, there is a big difference between losing money and wasting money. NBA teams have so many advantages that the idea of losing money is often impossible in some cases -- see the Bucks new owners deal where they were promised a publicly financed stadium or $25 million dollars! But it's very easy to waste money, and in sports, it's nothing new.
At the end of "Broke", there were questions posed about how to prevent future athletes from going broke and how to help teach better habits. I'm skeptical the current system will ever do this, but hey, who knows? However, if "Broke" had been written by Adam Silver, the ending would have said: "Many of these players lose money, the solution is for the current players to give them more money!" Luckily the public seems less receptive to this story. That said, it's a funny parallel between the mindset of the owners and the athletes.