Twenty-four hours later, I’m still torn about Josh Childress signing with Olympiakos. Unlike Brandon Jennings’ decision to spurn the NBA’s age limit in favor of the Euroleague, this isn’t a case of a self-serving rule coming back to bite the league. Childress’ decision was influenced by two rules that were implemented with the league’s best interests in mind: the salary cap and the luxury tax.
The salary cap was implemented to keep teams from big markets from using their financial resources to sign all of the league’s top players. The NBA’s cap is a soft cap, meaning there are several salary cap exceptions that allow teams to exceed the cap. But just because teams can exceed the cap, doesn’t mean that there aren’t penalties for doing so.
The league’s luxury tax was instituted in 1999, and came into effect in 2002-2003. The luxury tax is a dollar for dollar penalty that is assessed to a team that exceeds the luxury tax threshold. The luxury tax level is determined prior to the season, and is computed by a complicated formula involving Basketball Related Income.
Both the salary cap and luxury tax were implemented to ensure competitive balance amongst the NBA’s teams. But they were also instituted before the game became globalized. If the Childress and Jennings situations have taught us anything, it’s that the day when the NBA has to compete with leagues abroad is close at hand, if it hasn’t already arrived.
In order to retain their competitive advantage over foreign leagues, the NBA may be forced to revisit provisions from Collective Bargaining Agreements of the past.
Foreign leagues don’t operate under a salary cap, luxury tax, age limit, or rookie pay scale.
If Brandon Jennings — at the age of 18 — can sign with a team in Italy, what’s going to prevent the next LeBron James from signing a professional contract at 16? And if an American born teenaged phenom signs with a Euro team at 16, how influential will the rookie scale be in his decision to return to the States? By the time that individual is eligible for the draft, he could be a worldwide icon making in excess of $10 million tax-free dollars per season. Not to mention the income that individual could earn in endorsements.
The NBA still owns two large competitive advantages: level of competition and financial resources. But those advantages could dissipate over time.
The basketball world is narrowing the talent gap. That gap will continue to close. Sixteen years ago, the Dream Team annihilated the rest of the world in the Olympics. Four years ago, the US settled for Bronze. It’s not inconceivable to believe the basketball world could be a level playing field by 2020.
If that happens, the deciding factor of whether a player chooses to play in the NBA or abroad, will be dollars and cents. The NBA will always be at a disadvantage there because of the United States’ taxation system.
Childress’ contract is modest by NBA standards, but at three years, $32.5 million, it’s the largest contract in the history of the Euroleague. Kevin Garnett — the NBA’s highest paid player — will earn $24,751,934 next season. There isn’t a team in Europe that could afford to pay one player $24,751,934 a season. But it took the NBA 62 years to get to this point. The game of basketball is still in it’s infancy abroad. As the game continues to grow in popularity, the financial resources the Euroleague operates with will increase as well. That growth, coupled with the rising value of the Euro over the dollar, could tip the scales in European basketball’s favor.
July 24th, 2008 at 2:42 pm
I think the other thing that is in the NBA’s favor is the number of leagues out in international ball. I’d liken it a bit to the way boxing kind of lost some of it’s spark because the whole thing became so diluted that you never really respected any of the competition.
With the NBA you have one centralized league where you know you have a lot of stars and the best level of competition. With international ball, sure you may have a Childress here and a Jennings there, but it’s nothing like the NBA.
July 24th, 2008 at 5:28 pm
I don’t think the NBA really has much to worry about. The higher level of competition is always going to draw the elite players here. We can talk about the recent results of the US basketball team, but they were far more a result of A) Foreign teams having played together as a unit far longer and B) adapting to the international rules. The NBA is still filled with FAR more talent than the best European leagues. Jennings is going to Europe as a step to the NBA. Unless he seriously decreases his value in the next year, he’ll be back in the states pretty quickly.
I don’t see much problem with this. It sucks for Atlanta, but guys of Childress’s caliber aren’t going to be going over to Europe in droves, teams don’t have that kind of money, and Childress is a guy whose brand of play fits in very well overseas. Certainly, guys over his caliber won’t be going overseas anytime soon.
As someone I recently read (maybe Truehoop) said, we’ve been taking the best players from Europe for years now. It’s only fair they take someone good back.
July 25th, 2008 at 1:36 am
Really good read, Hoff. Enjoyed this one a lot.
I think you know where I stand about the foreign basketball–it absolutely sucks the way U.S. soccer compares to South American and European soccer.
And this will never change. We’ll never beat Brazil in soccer and France will never beat us in basketball. It’s just the way we’re designed. They have Pele. We have Michael. They have fields to run on. We have hoops to shoot on every other block. It’s nature.
Look at the world’s greatest foreign players and how they have fared in the NBA compared to how American players have fared overseas. It’s a joke.
It’s just the NBA is at a low right now. Detlef Schrempf was every bit as good as Dirk Nowitzki, if not better, but he played in a tougher era. If Detlef was playing in today’s league–forget it–he’d have an MVP award too. Manu Ginobili is Sarunas Marciulionis. But he plays in today’s game–dominated by kids; the league has never been younger–and so he sticks out. But he’s really not THAT good.
If the US sends its best players to the Olympics every four years, the US kills everybody. It was only when we stopped caring that “the rest of the world started to catch up.” You’ll see this summer. The US will dominate–we finally sent our best–and win the gold with ease.
Be back…going to sleep
July 25th, 2008 at 3:15 am
Yeah, you have to wonder if these situations will make the NBA quicken their globalization plans. I mean…last season, when the Bucks and Rockets played each other, THREE TIMES AS MANY PEOPLE WHO WATCH THE SUPER BOWL TUNED IN…and of course, nearly all of them were Chinese. That statistic is mind-blowing. Forget the U.S….get the NBA global NOW before those other leagues keep get better, stronger, richer, wiser…
otherwise this will be an issue for YEARS and will be the death of the current rookie pay scale, 19 year-old age restriction, and salary cap…
and for the love of God, we don’t want the NBA turning into the MLB with no salary cap… Why spend your time gaffing at Garnett’s contract when one glance at A-Rod’s would make Bill Gates do a double-take…
-KK
July 25th, 2008 at 3:16 am
oh yeah….good article, Hoff
July 25th, 2008 at 8:48 am
Good read Hoffman as always.
I think alot of the answers you received are valid in some shape, form or fashion but leave out history. The NBA can be likened to the Ford Motor Company of 30 years ago. They had all the talent, cash, and a huge market share if not all of it. What happened? They thought and acted like the industry belonged to them by some sort of devine birth right. Toyota, Honda, and Nissan said differently. Ford just posted an eight billion dollar loss Toyota is now the top auto maker in the world. The Euro league “right now” has no Kobe Bryant’s, Lebron James, or Kevin Garnett’s but that’s not to say they won’t in the very near future. One of the biggest reason they don’t have a bunch of Kobe’s Lebron’s, and Kevin’s is because sports come last in foreign cultures. (I know alot of American’s will probaly hate that but it’s a fact) They study math and science three times as much as they play ball.
To think that the Euro league can’t compete because of money is foolish on any true business minded persons part. Don’t think for a second that a Mark Cuban or Jerry Buss if presented with the right offer and situation won’t invest in a team overseas.
Oh and let’s not forget the biggest threat to the NBA. Immediate Gratitude. These young guys want to drive the big Benz now not later, they want their mothers in homes now not later, and they want all of the trappings that those Euro dollars will bring now not later.
The Chinese given the right motivation could pay a rising star Lebron James type money at the drop of a hat simply because they actually do have the money and the fans to back it up. And their fans are different than American fans. American fans go to the game not out of love for the game but so they can pay 7 dollars for a beer. (I’m being sarcastic here to a point) Other countries support their teams out of a far deeper sense of pride than Americans do. To understand that just watch a soccer match.
So what happens when Jennings becomes a star? Is there a real possibility that there will be a mass exodus of gifted and talented 17 and 18 year olds leaving for overseas? You bet there is. Why play pretend ball at some college who could give a fuck about you beyond your ability to score in the clutch rather than a Professional Team paying you more in one season than you would have made in 5 years in America? These kids what it now and Europe is giving it to them.
July 25th, 2008 at 10:54 am
Glad you guys enjoyed the blog.
Lakersfan19ii – Take a look at the DraftExpress article I linked to in today’s ‘Fundamentals’. It talks about the different leagues and which teams might have the money to sign NBA caliber talent.
xphoenix87 – I agree with your reasoning for why we lost in the 2004 Olympics. But you have to admit that the rest of the world is catching up to us.
A-Train – Thanks. But again, I really think you’re underestimating today’s players. Ginobili and Nowitzki are much better than Detlef and Sarunas were. I think we’ll dominate in this year’s Olympics too. But I have to admit that the rest of the world is closing the gap. I think it’s naive to believe that gap won’t continue to close.
King_Kaun – I wonder what types of rules and regulations an NBA league abroad would operate under. Would an affiliate mirror the rules and regulations here, or would it set it’s own guidelines? It’s going to be interesting.
Sensei1 – Good to see you. You brought up some valid points. And you’re right, China has the resources, they just need the infrastructure.
July 25th, 2008 at 12:29 pm
http://bleacherreport.com/articles/40956-clippers-and-knicks-talking-camby-randolph-swap
July 25th, 2008 at 1:30 pm
You couldn’t be more wrong, Hoff… but it’s Ok, I know it’s the popular thinking today with the NBA expanding its borders and now an American, Josh Childress, signing to play in Greece. But the truth is, the world isn’t catching up on us AT ALL.
I’m too lazy to write a book on this, but I’m telling you, people are totally missing the boat here. The NBA changed in the very late 1990’s and got incredibly young with everybody coming out early. We entered a young, inexperienced and ignorant period which I call “The Darius Miles years.”
Do your homework and I’ll bet you’ll find the average age of the NBA player dropped considerably from 1998 to, say, 2004. We gotta really young really fast. Every high schooler in the country thought he could go pro and there was nothing to stop them from doing so.
We went from seasoned four-year college grads coming into the league as rookies, riding the bench and learning for a few years before contributing in their mid-20’s, to 19-year-olds from high school coming in and being expected to start. The league went downhill. I mean, there was a point where bums like Stephon Marbury were considered one of the top ten or so players in the league. Steve Francis, etc. Isiah Rider. Etc.
GMs were forced to choose between drafting a kid from high school or one year of college, or selecting a kid from Europe who played more organized ball on a higher level. That’s where the influx of foreign talent came from. Plus, the youngsters in the NBA were ghettofied me-first guys who were bad for the league. The Europeans were more cultured, mild-mannered, with a work ethic, etc. So we started importing.
But 20 years ago, this wasn’t the case. It’s not like there weren’t good foreign players 20 years ago. You guys talk like it’s just recently that foreign players started to ball. That’s moronic. Basketball has been played overseas for over 50 years. You guys look at Dirk Nowitzki and say wow. I say, “what about Oscar Schmidt?” and most of you guys won’t know who I’m talking about (Schmidt is Brazil’s greatest basketball player–and he was better than Dirk, but he never came to the NBA because he knew he wouldn’t star).
Ginobili and Marciulionis are the same exact player. Same everything. Size, athleticism, intensity, left-handed, etc. The difference is one played in a smarter, more veteran era, and the other played in “The Darius Miles Years.” (which is changing by the way… I think in about four years, the NBA will experience a huge boom again).
Mariciulonis was the 1995 Eurobasket MVP. He helped lead Lithuania to two bronze medals in the Olympics. He won the gold with the Soviet Union in 1988. They played against the original Dream Team and finished third. You think this Ginobili-led Argentina team would have gotten a medal had they played against 1992 comp? Hell no. Argetina won because we sent the likes of Richard Jefferson instead of Michael Jordan. Plain and simple. They sent their best… and we arrogantly sent our practice squad.
In his prime, alongside Chris Mullin and Tim Hardaway on a run-and-gun Warriors team, he averaged 19 points per game despite only playing 29 minutes per. He was a good player, one of the best foreign players in the NBA. And he had, what we’d all call, a back-up’s career in the NBA. That was 1992. Larry Johnson, a four-year college grad and the best collegiate player, won rookie of the year. This isn’t the modern NBA were Mike Miller wins ROY. Jordan won MVP. David Robinson, Shaq, Mourning, Olajuwon, Ewing, etc. were all playing.
Detlef Schrempf that year won sixth man. The next year, 1993, Schrempf averaged 19 points, 10 rebounds, 6 assists. Schrempf was a VERY GOOD player.
But this is before ringtones and blogs. Schrempf had Kemp and Payton on his team to shadow him. He had Reggie Miller and Chuck Person. Thus, he wasn’t as popular as Dirk is today. But that’s not because Dirk is better… it’s because of the times. Everything is about marketing your star. The game used to be team-based, and now it’s all about entertaining.
But make no mistake, Schrempf was a helluva lot better than Dirk. If Schrempf played today, he would MVP-caliber.
The best foreign players couldn’t hang in the NBA back then, and the best foreign players can barely hang in the NBA today. Ask yourself, who are the best foreign players in the league now? How many do you count? How many of them are stars?
99 percent of them are role players. Just because there are many international players now doesn’t mean they’ve gotten good (clearly, they haven’t). Like I said, the league got young, and so we brought them here because it’s better to have Yi Jianlan than Darius Miles. It’s marketing. But neither one of these scrubs would have made the league in 1995.
It’s the same way how American players who starred in college but couldn’t make the NBA are dominating the foreign leagues. Khalid El-Amin (UConn), Terrell McIntyre (Clemson), etc., were killing people over there. Go look at the rosters of the good clubs overseas. They’re full of American players.
And then, of course, we get the best of what they have. Andrea Bargnani? Oh wow, he’s good. Marco Belinelli. He didn’t get off the pine. And now Danilo Gallinari got picked sixth. These guys are freaking awesome. You have to be kidding me. These guys barely know how to play.
Anderson Varejao. What a stud. But I should wait for Tiago Splitter, who’s gonna be awesome too, right? Give me a break.
I went to the NBA website. There are 76 international players in the NBA, and that’s counting Steve Nash, Tim Duncan, Adonal Foyle, Raja Bell, Sam Dalembert, Jamaal Magloire, Joel Anthony, Eduardo Najera, Carlos Arroyo, Stephane Lasme, etc. I could go on. All of these guys played college ball in the U.S. Most of them have lived in the states longer than they have on foreign soil.
To me, Tony Parker is foreign. Manu is foreign. Yao, Etc. But whatever, that’s another point for another add.
Out of these 76 players, how many of them are all-star caliber? 10? How many start? 25?
Meanwhile, in Europe, Marc Salyers, an American who went to Samford U., is leading the league in scoring. Terrence Morris, an American from Maryland, is leading the league in rebounding. DeJuan Collins, an American from LSU, is leading the league in assists.
In the South American league, Robert Battle, an American, is second in scoring and rebounding. Who is Robert Battle?
By far, Americans dominate the import market overseas. By far. Trajan Langdon make All-Europe Second Team. That should tell you something.
The United States will NEVER be as good in soccer as countries like Brazil. Never. It’s nature.
We have too many teams. We thinned out the talent pool. The Darius Miles era. The kids entering the league too early. Etc. All of these are a factor.
But in no way, at all, is the world starting to catch up to us in terms of producing elite basketball talent.
Our Olympic record is like 145-4 all-time. I mean, that should tell you something. We had the Russian robbery in 1972, and then the other losses came recently when we gave up on the event. I mean, we used to embarrass people so badly. Win games by 60 points, etc. We don’t have anything to prove. Until now, because of what happened in the previous Olympics. Watch this summer. We won’t lose a game.
July 25th, 2008 at 2:21 pm
OK A-Train…that’s an interesting point.
I am slightly curious why you chose young foreign players to use as examples of poor players? Why say Bargnani, Bellini, and really? Danilo Gallinari? The dude hasn’t even played ONE GAME and you are all but already calling him a bust.
Perhaps names like Darko, Nikoloz Tskitishvili, or maybe even “Nene” would have fit much better. All are lottery-drafted players who didn’t/haven’t lived up to expectations…and even Darko and Nene still have a shot at doing SOMETHING.
However, those 3 players you mentioned were drafted in 2006, 2007, and 2008!! Aren’t you jumping the gun just a LITTLE? (it’s not like Dirk was shattering records his rookie season…)
The rest of the world is catching up, make no mistake. Everyone can now see the money that is available playing basketball – that simply was not there 25 years ago. Perhaps you should argue that it’s not happening as quickly as some people believe….but you are blind if you don’t think its happening.
-KK
July 25th, 2008 at 2:26 pm
oh and as for American players dominating overseas? Well nearly (if not) every player you mentioned spent a least ONE SEASON in the NBA…it hardens you up to play down to a lesser level. So, if while the level of competition RISES while you are playing overseas, would you not RISE your level of intensity? What else has risen in the last few years of overseas ball? The paychecks. For some players, money is the only thing that motivates them…and for others, its a nice incentive. How long will it be before foreign teams can afford to buy 3 or 4 “Brandon Jennings” and “Josh Childress’”?
food for thought.
July 25th, 2008 at 4:21 pm
I chose those three players because they’re Italian, and the three best players in that country. I didn’t have any ulterior motive. The three best players from one country are:
1. A number one pick (or was he two) in Bargnani who has yet to show much of anything.
2. The second-best player in Italy, allegedly, who couldn’t get 10 minutes per game in Golden State of all places.
3. The sixth-pick in the draft who looked completely lost playing in a summer league game full of scrubs. He then fell and got hurt.
I know they’re young, etc. There are better examples. But what I’m saying is that these are the three best players in an entire country. Think about that. You would assume the best player from Italy, where there are big leagues, would be able to do more than watch Matt Barnes from the bench. I expect more… if these guys are the best, I expect more. It shouldn’t take the best player of Italy four years to show whether or not he can even be better than a sixth-man in the NBA.
The NBA is the standard. Childress and Jennings will be back next year.
July 26th, 2008 at 4:38 am
I gotcha.
All I’m saying is that they are transitioning from one league to another and they are all very young. In the case of Bargnani, he was given all the playing time in the world and has played decent at times and poorly at times (like the playoffs…ouch).
Marco Belinelli, however, was also a victim of an over-crowded roster. Even though Golden State got rid of Jason Richardson before last season, Belinelli was still stuck behind Monta Ellis, Barnes, Pietrus, Stephen Jackson and Azubuike.
Now Barnes, Pietrus, and Baron Davis are gone. Ellis is gonna run the PG and that just leaves Jackson, Maggette, Belinelli and Azubuike for the SG and SF spots.
I honestly think Marco is gonna have a good season this year so long as he gets/earns more playing time. which I think he will.
I think Gallinari will struggle mightily this season.