Sports Media Watch looked at the complaint that all the NBA's talent is coalescing in the league's major markets, and basically debunked it as myth. Miami, after all, is a middle-of-the-pack market (smaller than Minneapolis!), and as it turns out a couple of stinkers in the top five markets -- the Nets, Clippers -- make it such that the league's five smallest markets, on aggregrate, perform better than the top five.
It's a point that needed to be made, but the conclusion is still misleading.
Market size does matter. Last year I studied the relationship between market size, team profit and winning in some depth. As it turns out, over the past decade -- a decade with a salary cap and the punishing luxury tax -- there's a much stronger positive correlation between market size and profit than winning percentage and profit. The argument is not, and has never been, that the large markets have an inherent advantage on the court, by acquiring big-name players or putting out a better product. It's been that the potential for as much exists, and that the large markets have far more latitude to try to get there, because they were always be able to earn more money than their smaller rivals.
Consider the luxury tax. The three teams who have paid the most tax since its inception? The Knicks (No. 1 market), Lakers (No. 2 market) and Mavericks (No. 5 market). In any given season, small- or mid-market teams will join the tax club. But only the teams from the very largest markets can afford to do it every single year. That's an advantage, plain and simple. Until the NBA institutes revenue sharing serious enough to even the profit playing field, that disparity will exist.