The NBA and its Minor League System

On True Hoop, Henry Abbott writes about the OJ Mayo fiasco and says one solution is for the NBA to have a minor league. Of course, the NBA already has a minor league, the NBDL, it just does not use it properly.

Why should the NBA change its current system? Right now, the NBA is set-up to maximize owner profit. It pays almost no money for research and development, which is a huge expenditure for almost every other business. It relies on the NCAA to develop its product.

Think about this: when an NBA team drafts a European club player, it pays a buyout to the club to get the player out of his contract, meaning the club which signs and develops the player makes a good pay day when it loses the player. When an NBA team drafts an NCAA kid, the kid's college does not get a dime.

Of course, college programs are rich from their own tv contract. They don't really need the money and kids don't really stay long enough for the college to have much impact anyway. However, think the actual educational institutions could use a 500,000dollar contract buy out to put toward educational scholarships, its endownment or research?

What if scholarships became a four-year contract and NCAA institutions forced the NBA to buy out players' contracts just like European clubs? After all, the NCAA is the de facto minor league for the NBA.

Of course, the NCAA also gets its product for free, too, and profits handsomely through its rich television contracts. Top NCAA coaches are millionaires, while many of the coaches who do the real development work with kids at the pivotal stages of their development are basically volunteers. Look at the up coming NBA Draft: how much of an effect did college have on likely top 10 picks Michael Beasley, Derrick Rose, OJ Mayo, Eric Gordon and Kevin Love? They were considered by most the top 5 seniors in high school last spring and now are the top 5 freshman entering the draft on most boards. If the age limit had not been in effect, all five likely would have been 1st Round picks last summer. So, how much of an effect did college really have on their development?

So, in this wild and crazy scenario, what if colleges paid a kid's high school and aau club for the player's rights when he signed a scholarship? Rather than reaping giant profits for universities without any real expenditures, now the money which basketball generates would start to make its way to the level where the development occurs. As more and more high schools struggle with budget cuts, would they benefit from some cash donations when a college superstar leaves their campus?

Of course, this would open up a pandora's box of other problems. It also illustrates how many people make money off these players. I spoke to an NBA guy the other day and he said "it's amazing how many people make money off these kids without doing anything." That's basically the Mayo saga. People identify a talented basketball player and try to get their piece like they are buying stock in an Internet start-up. However, rather than investing money or research into the business (i.e. the star player), they try to forge a relationship and siphon off money for various services, namely delivering the player to a certain agent.

Could the NBA clean up this situation? I don't see why not. They don't have many of these problems in Europe - they have other problems of course - because evrything is transparent. There isn't this ridiculous attempt to convince people that these players are student-athletes, that 6 months of college is good for them and that they are really amateur players even though many have been getting benefits of some kind since junior high school - even if it just the free gear and travel associated with the top AAU programs.

Instead, we have thousands of rules governing the process and everyone tries to work around the rules, which creates a black-market like environment which pervades the system. If everything was open and transparent, maybe nothing would change, but everyone would know. Kids would know who the runners were and what they were trying to do - heck, agents wouldn't need runners because they could talk to the players because there would be no effort to protect the public amateurism of these professionalized college basketball players.