If NBA owners have their way in their collective-bargaining fight with the players, the league landscape will change so that, in the future, so-called “superteams”—like the one LeBron James, Dwyane Wade and Chris Bosh formed in Miami—probably won’t be possible. Tougher salary restrictions, coupled with limiting contracts to force players to stay with their original teams, would make the continuation of this trend difficult.
“The competitive issues for us as owners are as big as the economic issues, particularly in the small markets,” Spurs owner Peter Holt, who chairs the league’s labor relations committee, said. “We have been going back and forth for two years and we’re still far apart. This is extremely important for all owners, and for players and in particularly our fans. We want to get to a point where all 30 teams have an opportunity to compete and make a few bucks.”
The goal, commissioner David Stern has suggested, is to have star players populate rosters all over the league, with teams filling out the rest of the lineup with a secondary star and role players. That sort of set-up, the league feels, will keep teams from stockpiling too many good players, and ensure competitive balance.
Scientifically speaking, they’re right.
And while Stern’s aim has been to curb total spending, a study conducted by professors at Northwestern’s Kellogg School of Management and Stanford business school shows that, in the NBA, one of the deciding factors in team success is not just total money spent, but “pay dispersion.” That is to say, the teams that win are the ones that have a top tier of pay going to a small number of players, who are surrounded by lower-paid role players
. Players then establish an instinctual hierarchical structure based on how much they’re paid.
“Teams need to have some mechanism to allow them to coordinate their actions effectively together and coordinate their behavior,” said Adam Galinsky, one of the authors of the study. “How much they’re paid helps establish that. What’s nice about our study, you can see that what hierarchy is doing is increasing performance because of cooperation and coordination. When you have teams with players getting paid much different salaries, it leads to more assists, better field-goal percentage, more rebounds—the very actions on a court that require coordination among players.”
The study looked at NBA teams over an 11-year period, from 1997-2007. It examined pay dispersion, playing time dispersion and starting lineup dispersion, finding that teams with the widest gaps among player salaries, playing time and starting roles tended to form the most cooperative hierarchies. They were also the teams that won more. Galinsky holds up, as the sterling example, the Bulls of the Michael Jordan era, which saw important contributions from role players like Dennis Rodman, Steve Kerr, John Paxson, Bill Cartwright and Horace Grant.
“It is important on a team to recognize, ‘OK, Michael Jordan is more the man than I am,’” Galinsky said. “'And Scottie Pippen (is) right behind him.' Certainly, if you see what they’re paid and the minutes they play, you know that. So the other players have to say, ‘I need to do what I can to support them.’ One of the things about those Bulls teams is, a lot of those guys got nice contracts after they left the Bulls but did not contribute very effectively. Their talent existed in the fact that they learned how to cooperate and coordinate with Michael Jordan and Scottie Pippen.”
One thing that led Galinsky and his group to study the NBA was a 12-year-old study showing that wide pay dispersion in baseball actually hurt team performance. But there is some logic to that—baseball is primarily an individual sport, where paying a large salary to a first baseman who comes to bat five times in a game can’t hide an less-talented second baseman with a small salary, who also comes to bat five times. In the NBA, the more you pay a star, the more shots you can set up for that player, affording a team the opportunity to sign a low-priced supporting role player.
There are exceptions to the predominance of hierarchy over the years, most notably the Pistons of the mid-2000s, who thrived without established stars. But that team is notable because it was such an anomaly. What wins in the NBA is a hierarchy built around a well-paid star or two and a supporting cast with a wide range of salaries. If the owners in this lockout get what they want, there will be many more teams with that sort of structure—and better competitive balance might not be far behind.
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