Making money in basketball

July 28, 2006

Mark Cuban might annoy refs, the NBA and opposing fans, but he does have his moments. Like this recent read from his blog. Currently in minor league basketball in the US, the leagues pretty much try to copy the business of the NBA. Tickets. Sponsors. Sell entertainment at the games. Fun family entertainment. All of which are nice and important. None of which will make you big money in the minor leagues.

The money comes from copying the player development and contractual relationships of foreign leagues. They are in the business of developing and selling players. So should every minor league team. So in short in simple terms, here is what minor league teams should be doing.

  1. Sign up high school kids. Work with their parents. Pay their parents. Add high school kids as young as you can sign them up. Not after they graduate. WHILE they are in high school.

  2. Copy the contractual structures of the European leagues. When a player comes from a European team to an NBA team, that team can pay 350k for the contract of the player (More if the NBA team is under the cap). Plus, the player (or team if under the cap), can be responsible for a buyout. Paul Gasol, when he signed with the Grizzlies was supposed to have at least a $1.5mm buyout from his team in Spain. Its been reported that he paid the buyout out of the salary he receives from the Grizz. Good deal for Pau. Great deal for his former team. They developed him and got paid for it.</strong>

Really, this kind of development model would be really interesting in the US, especially considering the number of out of work "pro"-ballers there are out there. I wonder if this kind of approach would work in Japan, where the pro basketball league really isn't that well established. The system already kind of exists in the J-league with weaker teams selling players they raised to better teams. Of course, the difference is they are all in the same (though there are several divisions).

I suppose if the Japanese ballers could get real good in theory they could be sold to the NBA. But, there's a long way to go for that to happen. After all, the competition has to get better, more games with Korean and Chinese ball teams will have to do for now, I suppose.

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