08 December 2011

Competitive Imbalance in the PBA

The Philippine Basketball Association (PBA) has terrible competitive balance. No argument there. Lots of people have pointed this out and it can be easily seen on the way teams like Shopinas.com Clickers were easily eliminated from the present conference. And in the PBA, it's rare for bad teams to become good in a short time. One way to test this is to see how the Clickers will end the season at the bottom of the pack and there's no doubt on how they will finish the year since there were no major moves being planned.

This lack of competitive balance costs the PBA money. The PBA may have not realize this, but common sense dictates that nobody on their right mind will buy tickets to see a team that has 99 percent chance of losing a game. Perhaps later someone could correlate yearly league revenue with the presence of teams like the Clickers to try to incorporate the impact of money made from TV and other non-ticket sources to find out the magnitude of the losses. There isn't much detail right now since it is just the start of a three-conference season, but there are several analyses in the National Basketball League (NBA) that shows having more balance translate to more TV money.

Competitive imbalance exists simply because some teams are rich. The five San Miguel Corporation (SMC) and Manuel V. Pangilinan (MVP) teams are winning more games than the other teams because they spend more money to win. Salary is a stand-in for player quality, and not a great one. If semis-bound teams happen to spend more, it's because they happen to have better players that they had to pay for.

The PBA management should not allow one team to spend more than what is dictated by the contract because it poses a big disadvantage to some. Let us cut the BS and skip the illogical argument that "how much the team spends is the team's choice". This should not be the case if the league is really serious in promoting a more balance competition.

A hard cap should be imposed because it definitely can help change the way teams spend on their players. This should not be an imaginary thing that could be easily skirted by legal concepts but a firm possibility. Given that teams are really not poor evaluators of talent, a hard cap will not tie their hands financially because they can easily cut loose unproductive players in favor of productive people. And since teams can tell the difference, the other teams will not sign both groups. And so balance could stay about the same.

More equal spending will mean more equal winning because each team will use the same amount for almost the same talent or more accurately fall ass backwards into it. So even if they are forced to spend less, they’re still going to hire players who can produce the numbers compared to their salary.

Of course hard caps are unproven in increasing competitive balance, as shown in the NBA, but they could be a step towards it. The real issue is with identifying talent. However, having the right amount of money to spend on that talent can foster competitive balance. If the PBA does not start with hard caps, then nothing in the league will change except that the SMB and MVP teams will keep spend more money and play well, the others spend less and gets crummy, and revenue won’t increase beyond what the PBA’s declining popularity is already doing.

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