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.