Individual differences don't lie

By Razib Khan | October 16, 2011 5:16 pm

Over at Think Progress there’s a piece titled Why We Can’t Dismiss The NBA Labor Dispute As ‘Millionaires Versus Billionaires’, where the author argues that the players are fundamentally different than the owners in relation to the acquisition of their wealth. There’s a whole lot of prose there, but the first commenter really hit the nail on the head: Chris Rock solved this shit years ago (and you just read that in his voice) – “The guys on the court are RICH. The guy sitting up in the box is WEALTHY.” If you magically multiplied the players’ salaries by a factor of two all that would do is that push back the likelihood of bankruptcy by 5 years or so. An added cushion would take more time to burn through, but that would be compensated for the fact that signalling consumption would increase. In other words, instead of 8 cars in the garage, 16. Instead of an entourage of 6, 12.

Consider someone like Antoine Walker. He’s still trying to maintain a professional career when it’s pretty obvious he doesn’t have the skills due to his age. But he’s got to service his debts. Would doubling Walker’s salary have made a difference at the end of the day? I doubt it.

This isn’t an argument for paying professional basketball players any less. Professional sports teams seem more like a luxury consumption good for most owners (Donald Sterling excepted). Their consumption habits certainly have a stimulative effect, though it seems that financial mismanagement and fraud are extremely common events in the careers of these athletes. Because they lack sophistication the slickest and slimiest lawyers and accountants seem drawn to them. But it just seems foolish and evasive to admit that these individuals lack the basic skills to manage huge windfall incomes for a few years, and not propose any policy response if you think that their inevitable fates should be avoided. If you want to increase long term player well being then you’d want their contracts to be negotiated so that salaries would be disbursed over 20 or 30 years, with trustees who could release funds in case of an emergency (e.g., health costs, or expenditures in the face of immanent death). You’d need to go very paternal.

Greece, the American consumer, and our financial sector simply couldn’t handle massive capital inflows responsibly. We expect N.B.A. players who tend to exhibit high time preference to be saved by extra millions of dollars? Get real.

  • John Emerson

    It’s also true that the majority of major league athletes have short careers and are not far above the minimum. 2 years at $400,000 is still a lot for most of us, of course, but a 30 year careers at $100,000 is a fairly normal goal for ambitious people and pulls in far more money.

  • Razib Khan

    well, 3.75 X more money.

  • Razib Khan

    and paternalism would have to be modulated by position/sport. NFL running backs have much shorter careers that baseball outfielders.

  • Wrong

    You are clueless and obviously did not watch Antoine Walker last year. He might not be a starter anymore but he can still play. He would be a good fit to an NBA team that needs a veteran or someone with experience.

  • Brian Schmidt

    I wonder if the solution is for the players to admit collectively they have a problem while denying individually that they do. But I don’t know much about the politics of sports.

  • Paul

    I heard a radio interview with Ernie Banks (famous Cubs player) a couple of months ago. One point that stuck in my mind was how the Cubs owner was concerned his player didn’t understand how to manage their money. He had his financial advisor come in and tell them how to plan investments to support themseves after they retired. Most of the players didn’t trust him, but Banks was naive and nice enough to do so, and put half his salary into a fund he couldn’t touch until he was 50.

    Banks retired very comfortably.

  • Razib Khan

    #5, owners have a similar problem. they want to impose stricter salary caps to constrain bidding wars on expensive players. but no one is forcing them to bid up player salaries….

  • Whah?

    @Wrong – the point is that Antoine Walker needs to find work, despite having made $110m in salary over his NBA career.

    And nobody watched Antoine Walker last year since he was out of the league. But if someone needs a 37 year old power forward who doesn’t rebound and shoots 36% FG% and 53% FT% like he did in his last year, he’ll have plenty of suiters.

  • Mustapha Mond

    The only problem the NBA players have is the same one that millions of American workers have. The anti-syndicalist laws of the late 19th century make it illegal in the United States for workers and their unions to own the enterprises where they toil as wage slaves.

    Repeal these oppressive and reactionary laws and pensions (and signing bonuses) would be vested reasonably based upon long term profitability and many industries both small and large would bloom.

    PS #6 – to watch Ernie Banks play at Wrigley Field (as I had the privilege to) during his MVP 1958 and 1959 seasons was truly a wondrous joy to behold.

  • ohwilleke

    Traditionally, it was unions that pushed for this kind of paternalism. Query why that doesn’t happen as much in the NBA case.

  • Charles Nydorf

    One difference between owners and players is social class. There is a big safety net in place for the owner class and nothing comparable for the player class.

  • Chris T

    I would like to point out that your marginal player (the ones who are only around a year or two) are not the ones who will receive much benefit from a favorable agreement. Such players have very little bargaining power, it’s your stars who stand to gain the vast majority from an agreement.


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About Razib Khan

I have degrees in biology and biochemistry, a passion for genetics, history, and philosophy, and shrimp is my favorite food. In relation to nationality I'm a American Northwesterner, in politics I'm a reactionary, and as for religion I have none (I'm an atheist). If you want to know more, see the links at


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