Even four months and change into the NBA lockout, I still hear questions from folks wondering why on Earth players make so much money. A number of players make more in a two-week paycheck than the average American makes in a decade. It's just crazy!!, right?
But there's an easy explanation for it all: it's supply and demand. There is a limited supply of awesome basketball talent in the world. There is a high demand to see it. So the NBA hires the talent that supplies the awesome basketball, provides the infrastructure to make it worth as much as possible, and sells it to fans. If demand for awesome basketball dissipated, the supply of it would get less expensive. If demand continues to grow, the talent that supplies the awesome basketball will see its price grow. It's very basic economics.
But that's still pretty complicated. Something that really stuck with me in school was the diagram of the water cycle. Maybe adapting the water cycle to the NBA Money Cycle will help explain why players make so much danged money. Let's find out.
The Sea Of Fans, helped by the Media Partner Cloudseeding Brigade, tosses a ton of money -- some $4.3 billion -- into the sky in exchange for Enjoyment (also known as Fun). (The Media Partner Cloudseeding Brigade also has financial incentive to throw money at Enjoyment aka Fun; this incentive can be referred to as More Money.) The money given by the Sea Of Fans comes in the form of game tickets purchased, TV ads watched, in-arena ads viewed, enormously marked-up beers drank, jerseys bought, etc.
All this cash -- $4.3 billion of cash, to be precise -- forms a Money Cloud which then moves over NBA Land because of lunar rotation or something. The Money Cloud is just bursting with money! It must relieve itself all over the NBA! So it rains money. Lots and lots of money. Some $4.3 billion of money.
Some of that money comes right back off of the top; we'll assume it flows down Non-Player Employees Creek. A bit more runs off into Enjoyment River, which flows directly back into the Sea Of Fans; consider the Quick Change act part of this run-off. The other $3.8 billion seeps into the Underground Money Lake, where the team owners and players split it up. In the process of splitting it up, the owners organize games, which the players perform in. This is the service that the Sea Of Fans pays for, and it is delivered via the Underground Enjoyment River.
In the old days (also known as "last year"), players earned 57 percent and the owners took the remaining 43 percent. Out of their portion, the owners would pay any game-related expenses such as debt on arenas, travel costs, headband inventory, etc., and take the leftover as profit. The players would take their portion and use it to live.
Now, owners want 50 percent of the revenue instead of 43 percent. They also want some concessions that would make it easier to control where the players work and for how much. They want to be able to replace players more quickly when their awesome basketball talent dwindles. Players have opposed such rules, and here we are. In fact, thanks to the NBA lockout, we kind of have a broken-down version of the NBA Money Cycle, also known as the NBA Lockout Money Quasi-Cycle.
Until there's a new deal, owners have installed several dams and gates. The West Lockout Dam and Lockout Flow Gates on the Underground Enjoyment River ensure that the Sea Of Fans gets no Enjoyment, also known as Fun, at all. The Underground Money Lake Lockout Diversion Gate ensures that players get no revenue whatsoever, despite the fact that there is indeed revenue coming in, much of it in the form of previously sold TV rights. As such, the Media Partner Cloudseeding Brigade is paying for access to fans that it is not getting. What a bummer.
In a real water cycle lockout, the sea would eventually dry up, clouds would no longer form because of the lack of evaporation potential, and it would no longer rain in the mountains. Everything would die. It remains to be seen whether the same will apply to the NBA Lockout Money Quasi-Cycle, and if the Sea Of Fans will just become unbearably bitter and march on the offices of David Stern, the commissioner of the Awesome Basketball Money Quality Board, in anger.
Note: I would like to apologize to any scientists or third-grade teachers I have offended with this bastardized lesson.
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