Declining Dollar Hurting NBA

Patrick Fitzgerald highlights an unlikely consequence of the falling dollar:  The NBA is finding it harder to poach the best European talent.

It was only a matter of time before the declining dollar affected the world of sport. In years past, the Europe’s prime basketball talent bolted across the pond for the superior pay and play of the NBA. Now, the trend appears to be heading in the opposite direction, thanks to the rising euro and an influx of Russian investment in the European league.

Thus far, it seems that Europe is just a more viable fallback plan for disgruntled marginal NBAers and high school stars.  For example, erstwhile New Jersey Net Bostjan Nachbar just signed with Dynamo Moscow, who “realized was not in New Jersey’s plans after the Nets traded Richard Jefferson to Milwaukee for Yi Jianlian and Bobby Simmons and signed free agents Jarvis Hayes and Eduardo Najera.” Indeed, “The contract, worth 9 million euros, will include affordable buyout clauses after each season to allow him to explore the option of returning to the NBA. Nachbar said he was keeping a close eye on how the salary-cap situation in the summer of 2010 will impact his prospects of returning to the league.”

Nachbar’s deal follows a fast-developing and worrisome trend for some NBA executives — based in large part on the strength of the euro against the dollar — of European-based teams being able to outbid their NBA counterparts for free agents.

Already this summer, Tiago Splitter of Brazil, a first-round pick of the Spurs in 2007, and Goran Dragic of Slovenia, a second-round pick of the Spurs in 2008 whose rights were traded to the Suns, have opted for more lucrative deals in Europe than they’d be eligible for as rookies in the NBA. And four international players with NBA experience — Carlos Delfino, Jorge Garbajosa, Pops Mensah-Bonsu and Juan Carlos Navarro — have accepted offers from European teams that easily trumped the money NBA teams were willing to offer.

“The NBA had better be careful,” Nachbar said. “European teams are offering a lot of money. It’s much more, considering there are no taxes, than what I could make signing for the midlevel exception.”

There’s also the case of prep star Brandon Jennings, who’s going to Italy rather than spend two years going to college waiting until he reaches the NBA’s minimum age.

Indeed, while the Euro’s strong value vis-a-vis the dollar is a major factor in all this, what this seems to point to is the value of a free market competitor in forcing changes on an unfair labor market. With its age restrictions, rookie scale, and odd salary cap rules, players simply can’t earn what they would in a truly open competition for their services. A viable European option will make it harder for the NBA to continue those practices.

FILED UNDER: Economics and Business, Europe, Sports, , , , , , ,
James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

Comments

  1. David says:

    Here in Atlanta we’re experiencing this first-hand. Josh Childress, a major contributor for the Hawks, is said to be “50-50” on an offer from Greek squad Olympiakos. This is a guy who is a cut above the “marginal” talent and was expected to receive offers from around the NBA. The Hawks had made it known they would match any offer sheet from another NBA team, but that doesn’t apply to international organizations. It will be very interesting to see how the NBA responds to this trend.

  2. Tlaloc says:

    The existence of professional sports is a testament to man’s stupidity.

    If you like a sport- go play. Don’t pay money to sit around and watch other people get exercise by playing with a ball. That’s &^%$ing retarded. Particularly when those people are stupidly overpaid and generally behave as the worst brats imaginable (with apologies to the britney Spears and Paris Hiltons of the world).

  3. markm says:

    “There’s also the case of prep star Brandon Jennings, who’s going to Italy rather than spend two years going to college waiting until he reaches the NBA’s minimum age.”

    Not totally true. Yes, he’s playing there and getting paid while waiting to reach the NBA min. age….but the main reason is because he couldn’t pass the ACT (or SAT) test(s) so college wasn’t an option. He failed the test(s) twice.

  4. Triumph says:

    Basketball is probably the second-most “global” sport after football.

    It will be interesting to see if basketball follows football in the ways in which talent is distributed globally. In football, you basically have a half a dozen teams (Man. U, AC Milan, Barcelona, Chelsea, Liverpool)in various national leagues that compete for the top talent. Outside of the English Premiership, the national football leagues are generally less competitive (and more boring) than the Champions League.

    The main reason football has moved this way is because you have big money owners and no salary cap. The NBA could get rid of the salary cap and be in a better position to compete globally for talent, but the NBA would then likely be dominated by a handful of big media market teams.

    It would be cool, however, if they had a global Champions League-type of tournament if the talent pool becomes more widely distributed across the globe.

  5. […] Declining Dollar Hurting NBA – Outside BeltwayPatrick Fitzgerald highlights an unlikely consequence of the falling dollar:  The NBA is finding it harder to poach the best European talent. It was only a matter of time before the declining dollar affected the world of sport. In years past, the […]

  6. od says:

    The existence of professional sports is a testament to man’s stupidity.

    If you like a sport- go play. Don’t pay money to sit around and watch other people get exercise by playing with a ball. That’s &^%$ing retarded. Particularly when those people are stupidly overpaid and generally behave as the worst brats imaginable (with apologies to the britney Spears and Paris Hiltons of the world).

    Same could be said for music, art, and just about any form of entertainment. Even reading a book could be replaced by folks sitting around and telling tales – used to work that way. There’s a difference between the enjoyment and development you get from participation and the enjoyment of watching people who have mastered an art or sport – they’re not even necessarily mutually exclusive. Listening to Glen Gould play Bach has inspired many pianists in their own playing. Same for Michael Jordan playing basketball.

    Maybe we’d be better off if most people participated (played their own music, painted their own pictures, played in their own basketball league), but I wouldn’t hold my breath waiting for that to happen.

    As far the NBA (actually the NHL now too), professional athletes play for money. They’ll go where the pay is best. Nothing strange or wrong about that, its the way its supposed to work.

  7. Brian says:

    Globalization is inevitable. That it is happening with sports just makes that fact present for your average American. It’s not good, it’s not bad, it just is. It’s better for basketball and those who love basketball because it opens the door to watching high-quality games more often. That’s my take, anyway.

  8. capital L says:

    1: The best NBA players and prospects are not about to jet off to play Euro-ball.

    2: There are not a lot of NBA fans who will lament a reduction in the flow of European talent into the NBA, as they are often criticised (with varying degrees of fairness) as not being physical enough for the NBA style.

    3: “The existence of professional sports is a testament to man’s stupidity.” This is one of the most rediculous things I’ve ever read on the entire internet, and I am aware of all internet traditions.