NBA Collective Bargaining Agreement

The NBA lock-out just ended, this is not the first time it has occurred and most likely not the last either. It is a common occurrence every few years to have this type of lockout in major league sports, and there is simple explanation why.

Even though the NBA has a monopoly in professional basketball which means they could underpay if they wanted too, the NBA players have a monopoly on the supply side and they are banded together in a powerful union known as the NBA players association.

Bringing the two together essentially creates a head-on collision between two run-away freight trains, and in the ensuing confusion and debris, we hope both sides reach an agreement, or in other words a market equilibrium for the pay and benefits and regulations that the league and the players will abide too.

I don't plan to go through the agreement, the last collective bargaining agreement was signed in 2005 and it was 300 pages of legalese and loopholes. It is interesting to note how much less the non-prime professional basketball leagues pay, Kenyon Martin who reportedly made $16.5 million in the 2007-2008 season is going to play in the Chinese Basketball Association and make the highest ever paid in that league: 500,000$ a month. That is still a 70% drop in salary!

The average NBA player in Europe is expected to make 50-75k a month, while in the NBA, the average salary is 5.8 million$. It just goes to show you that the main league still has all the power and control to recruit the most talented players.