Economics Affect the NBA
Trevor Raasch
Mr. Reuter
Economics
24 February 2014
Economics affect the NBA
Although some may not recognize it, economics plays a huge role in all professional
sports, especially the NBA. The National Basketball Association is a lot different from most
American sports, the National Football League, Major League Baseball, and the National Hockey
League.
Competitiveness is what drives all sports; everyone wants to win. In professional sports the best
way to win is have to the best players, obviously. In order to acquire these allstars, the owners
of the team must first look at the opportunity cost of each player and then, if willing, pay the price;
the best players typically go to the team that will pay them the most. The buying, selling, and
trading of players affects the NBA more than any other sport. Good team owners recognize the
economic boost that a certain player or players can bring to a city. Take Lebron James for
example. He is one of the greatest to ever play, and he recently made the decision to sign with
the Miami Heat. The impact that one player had on an entire city’s economy is insurmountable.
Micky Arison, the owner of the Heat, made a very smart move to not only sign Lebron James but
another superstar, Chris Bosh. Miami Herald of Today’s reported that, “with the signing of
LeBron James, who is a "walking, talking, freethrowshooting stimulus plan," the Heat will earn
more than $10 million or more in playoff revenue alone” (Herald). That is an unreal boost to an
economy, and that’s only the playoffs and only one player.
These economic times have been tough and they have deeply affected roster sizes. General
managers have had to cut or release players simply because they do not have the money. In the
NBA you are allowed 12 active players and three inactive or hurt players. In recent years nearly
every team has been able to fill up all 15 slots, however with the tough economic times, GM’s are
realizing that it might be more beneficial to leave a couple open slots. Mark Warkentien, the
Denver Nugget’s vice president of basketball operations, voiced his opinion about the decreased
roster size, “There’s an obvious economic benefit, I’m not going to deny it. The compelling
reason is the flexibility” (Warkentien). The economic benefit that Warkentien was talking about is
the fact that with open spots in the roster allows for more money to be spent. More money for a
team gives them a greater chance of signing a superstar to bring in all sorts of economic
benefits. The flexibility is also huge because 15 is the maximum amount of players allowed on a
team; if spots are open, these high caliber players can find a place to fit in. All the greatest
general managers weigh the marginal benefit versus the marginal cost before signing a player.
Micky Arison knew that the benefit of signing Lebron James and Chris Bosh would easilyoutweigh the cost and look at Miami’s economy now.
Economics can affect all aspects of life, especially businesses. The NBA just like the NFL, the
MLB, and the NHL are all businesses and economics creates a great impact.
Mr. Reuter
Economics
24 February 2014
Economics affect the NBA
Although some may not recognize it, economics plays a huge role in all professional
sports, especially the NBA. The National Basketball Association is a lot different from most
American sports, the National Football League, Major League Baseball, and the National Hockey
League.
Competitiveness is what drives all sports; everyone wants to win. In professional sports the best
way to win is have to the best players, obviously. In order to acquire these allstars, the owners
of the team must first look at the opportunity cost of each player and then, if willing, pay the price;
the best players typically go to the team that will pay them the most. The buying, selling, and
trading of players affects the NBA more than any other sport. Good team owners recognize the
economic boost that a certain player or players can bring to a city. Take Lebron James for
example. He is one of the greatest to ever play, and he recently made the decision to sign with
the Miami Heat. The impact that one player had on an entire city’s economy is insurmountable.
Micky Arison, the owner of the Heat, made a very smart move to not only sign Lebron James but
another superstar, Chris Bosh. Miami Herald of Today’s reported that, “with the signing of
LeBron James, who is a "walking, talking, freethrowshooting stimulus plan," the Heat will earn
more than $10 million or more in playoff revenue alone” (Herald). That is an unreal boost to an
economy, and that’s only the playoffs and only one player.
These economic times have been tough and they have deeply affected roster sizes. General
managers have had to cut or release players simply because they do not have the money. In the
NBA you are allowed 12 active players and three inactive or hurt players. In recent years nearly
every team has been able to fill up all 15 slots, however with the tough economic times, GM’s are
realizing that it might be more beneficial to leave a couple open slots. Mark Warkentien, the
Denver Nugget’s vice president of basketball operations, voiced his opinion about the decreased
roster size, “There’s an obvious economic benefit, I’m not going to deny it. The compelling
reason is the flexibility” (Warkentien). The economic benefit that Warkentien was talking about is
the fact that with open spots in the roster allows for more money to be spent. More money for a
team gives them a greater chance of signing a superstar to bring in all sorts of economic
benefits. The flexibility is also huge because 15 is the maximum amount of players allowed on a
team; if spots are open, these high caliber players can find a place to fit in. All the greatest
general managers weigh the marginal benefit versus the marginal cost before signing a player.
Micky Arison knew that the benefit of signing Lebron James and Chris Bosh would easilyoutweigh the cost and look at Miami’s economy now.
Economics can affect all aspects of life, especially businesses. The NBA just like the NFL, the
MLB, and the NHL are all businesses and economics creates a great impact.
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