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Does Market Size Even Matter Anymore in the NBA?

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Does Market Size Even Matter Anymore in the NBA?
Tom Lynn/Associated Press

The NBA's news cycle is back in the hands of the most profitable teams in the league's biggest markets.

Phil Jackson's now a member of the New York Knicks' front office, enticed to Madison Square Garden by a five-year, $60 million deal. Even with the Zen Master in town, Carmelo Anthony might still seek refuge elsewhere this summer, perhaps with the Chicago Bulls or the Houston Rockets (per Yahoo Sports' Adrian Wojnarowski).

Out West, Los Angeles Lakers fans are smarting over Jackson's departure, despite the absence of an appropriate role for him within the organization. The future, though, remains bright, thanks to an incoming flood of cap space, a plum pick in a loaded 2014 draft and the franchise's enduring appeal with marquee free agents.

Meanwhile, the Milwaukee Bucks might not have enough dough to stay in town, much less bring in a big name to supplant GM John Hammond. The Minnesota Timberwolves have a superstar of their own, in Kevin Love, who's due to hit the market soon, but their odds of keeping him around seem much slimmer than do the Knicks' of nailing down Anthony's services. The Utah Jazz will be as financially flexible as any franchise in the years to come, but they can't count on the peculiarities of Salt Lake City to draw someone else's All-Stars onto their cap sheet.

All of which, among other things, suggests that the divide between the NBA's haves and have-nots is as wide as it's ever been—and that the gap will only grow going forward.

Except, that's not really the case. If anything, the rules governing the business of today's NBA have done well to mitigate the importance of factors far beyond the control of any given organization—namely, the size and appeal of the city in which it's based—and put the on-court fate of each more firmly in the hands of those in charge of basketball operations, for better or worse.

 

A Rising Tide

Charles Krupa/Associated Press

On the whole, the NBA's small- and mid-market teams are doing better than ever.

The three best records in the league all belong to squads whose home cities rank outside of Nielsen's top 25 media markets in America. The two-time defending-champion Miami Heat hail from only the 16th-most television-friendly designated market area (DMA) on that list.

(Minneapolis-St. Paul ranks 15th, by the way.)

On the flip side, six teams from the top 11 markets—the Knicks (first), the Lakers, (second), the Philadelphia 76ers (fourth), the Boston Celtics (seventh), the Atlanta Hawks (ninth) and the Detroit Pistons (11th)—are flailing in a pool of futility, beyond the bounds of the playoff picture their respective conferences.

Financially speaking, being from a market outside of the major few no longer seems to be the impediment to profitability that it once was. The hallmarks of the current collective bargaining agreement (i.e. shorter contracts for players, more restrictive salary cap rules and expanded revenue sharing) have made it much easier for teams to operate in the black.

And many more are. According to Forbes, 26 of the NBA's 30 teams made money last year. Among those that didn't, one (the Sixers) tanked its way into oblivion and another (the Brooklyn Nets) simply spent its way there. In fact, only one of those four (the Bucks) hails from a cold-weather city in a small media market.

The ranks of teams operating in the red figure to shrink even further in the years to come. The money accrued from the harsh luxury taxes levied against free-spending franchises will be redistributed to those who slip under the salary cap.

More importantly, according to Ad Age's Michael McCarthy, the NBA's next national media deal could more than double the annual value of its current one, which is set to expire in 2016. However high the bidding goes, with 24-hour sports networks clamoring for live content, the league's constituents will all reap the benefits, with each potentially turning a profit within the next few years.

In theory, then, all 30 teams could soon be operating less out of concern for their financial well-being and more out of a desire to win. That's good for everyone—the league, the teams, the players and the fans.

 

Supply and Demand

Darren Abate/Associated Press

But even if the NBA were to achieve complete profitability, there's still one big problem about which teams in small- and mid-sized markets can continue to gripe.

That is, the acquisition and retention of top-tier talent, and the trouble that those teams supposedly have of doing either.

To be sure, this quandary isn't unique to clubs in flyover country. Superstars have always been and—barring some unforeseen and unprecedented upwelling of blue-chippers through basketball's grassroots—will likely always be scarce commodities in the NBA. They're the sorts of players without whom you'd be hard-pressed to so much as sniff the Larry O'Brien.

(Unless, of course, you're the Detroit Pistons of the early-to-mid-2000s—the exception that proves the rule.)

If superstars are so scarce and a team must have at least one to contend, there can only be so many squads whose competitive aspirations are realistic during any period of time. In truth, the very best teams, the ones that can realistically compete for championships, sport multiple All-Stars and All-NBA performers. Skim over the current standings, and you'll see that the teams with the top eight records overall each fit this description in some capacity.

Everyone's fighting over the same, small swath of players, but, as the story goes, those teams in less desirable locales are at a severe disadvantage. They can't hope to lure the best players away from the brightest lights in the biggest cities, certainly not with harsher weather and fewer off-court opportunities on their metropolitan C.V.'s.

Heck, they'd be lucky to hang onto the ones that they've added through the NBA Draft or via trade. Small-market teams are the ones at the greatest risk of seeing their resident stars force their way out of town, with the threat of leaving for nothing via free agency looming large.

 

Does Size Matter?

Jae C. Hong/Associated Press

At a glance, market size and appeal would seem easy scapegoats in some of the most monumental moves of the past few years. LeBron James, Deron Williams, Carmelo Anthony, Chris Paul, Dwight Howard and James Harden have all "upgraded" in that regard since 2010. Those same supposed forces could pull Kevin Love to either coast in 2015, if not before then.

But the "problem" of superstars changing addresses isn't unique to teams in small, frigid cities. The Lakers lost Howard to the Houston Rockets last summer. Josh Smith left Atlanta, the ninth-largest media market in the country, for Detroit, the 11th-largest, around the same time. Anthony could bolt the Big Apple this coming July.

On the flip side, the list of All-Star-caliber players signing long-term deals with franchises in smaller markets seems to be growing every year. The Oklahoma City Thunder gave up Harden in 2012, but have the title-worthy trio of Kevin Durant, Russell Westbrook and Serge Ibaka locked in until 2016. The same goes for the Indiana Pacers, who have Paul George and Roy Hibbert secured for that same span and figure to retain Lance Stephenson this summer. The San Antonio Spurs have had their own triumvirate (Tim Duncan, Tony Parker and Manu Ginobili) in tow since 2002.

And don't forget about the Portland Trail Blazers, who seemed destined to lose LaMarcus Aldridge to wanderlust before Damian Lillard arrived on the scene to spark the team's resurgence. 

Aldridge's case, in particular, is illustrative of what truly matters to the cream of the NBA crop: winning. Now that his Blazers have escaped the morass of the post-Greg Oden/Brandon Roy era, Aldridge seems much more amenable to a future in Rip City.

Could Love's feelings about life in the Twin Cities flip if his Minnesota Timberwolves get their act together and enjoy a similar run of success next season? Might LeBron and Dwight have stayed in Cleveland and Orlando, respectively, had their front offices not dropped the ball, time and again, after their lone appearances in the NBA Finals?

What if D-Will's Utah Jazz had cracked the Finals? Would 'Melo still call the Mile High City home if his Denver Nuggets had escaped the first round more than once during his seven-and-a-half seasons there? And where might CP3 be playing today if the New Orleans Hornets hadn't fallen into such disrepair amidst the league's conservatorship?

These guys each had their own reasons for doing what they did, though they all were bound, at least in part, by a desire to win and an understanding that their circumstances at the time weren't as conducive to doing so as they'd otherwise hoped. Market size only mattered insofar as it encouraged owners to fret over their finances—which, as discussed earlier, isn't quite the concern now that it used to be.

 

Foundations For Free Agents

Gary A. Vasquez-USA TODAY Sports

This isn't to say that teams in major markets don't still have a leg-up on the competition in pursuit of superstars. All else being equal, Player X is probably going to pick playing in a big city over working in a smaller one more often than not. 

In some ways, the current collective bargaining agreement has only exacerbated this disparity. Teams in smaller cities and/or with less prestigious brands can't hope to outbid their fellow suitors and overpay for elite talent, as is so often done in the NFL and MLB. Instead, they have to abide by strict rules governing how much a player can make per year and for how many years he can sign.

And if the difference in salary between a smaller market and a larger market isn't all that significant, Player X is likely to choose the latter, be it for quality of life, brand-expansion opportunities or any number of other factors that play into such proceedings.

But a number of the franchises currently touted as top destinations weren't always that way, despite their prime locations.

The Heat weren't seen as a hot bed for free agents until 2010, when James and Chris Bosh joined Dwyane Wade on South Beach. It wasn't the sun and the sand that attracted those two to Miami, though. Rather, it was the opportunity to play under Pat Riley and alongside Wade, whom the Heat drafted in 2003 and with whom they won a championship in 2006, that drew James and Bosh to south Florida.

Frank Franklin II/Associated Press

Compare that to the Knicks, who went after those three (and others) during that vaunted free agency period, only to see Amar'e Stoudemire's balky knees come aboard for five years and $100 million. New York lacked the resident superstar and the blueprint for success that Miami boasted. Stoudemire subsequently served as a "magnet" for Anthony and Tyson Chandler, though you'd be hard-pressed to find anyone nowadays who thinks that's made his $21.7 million salary this season (and his $23.4 million take in 2014-15) well worth it.

At least the Knicks had some history on which to draw, though. The same can't be said of the Los Angeles Clippers, who, as the league's resident laughingstock, struggled for decades to build through free agency. They came close in 2008, when they snagged Baron Davis from the Golden State Warriors, but saw their plans undone when Elton Brand, fresh off an Achilles injury, left for Philly that same summer.

It wasn't until 2011, when Paul arrived by trade after the lockout, that the Clips' free-agent fortunes truly turned. Chances are, Paul wouldn't have approved that move—as in, he wouldn't have opted in for the final two years of his contract at the time—if not for the presence and promise of Blake Griffin and DeAndre Jordan, both of whom L.A. added through the draft.

The Rockets have since joined the Clippers in the upper echelon of the Western Conference by way of a similar strategy. They made every effort to take Howard off Orlando's hands in 2012, offering draft picks and young players galore.

But Howard was reluctant to go to Houston. The Rockets had missed the playoffs three years in a row and seemed to lack anything resembling a foundation upon which a title contender could quickly be constructed. The Rockets, for their part, were equally wary of taking him on (and giving up much in return) if they couldn't be sure that he'd stay.

Then, Dwight went to L.A. and the Lakers fell apart, while the Rockets rode Harden, acquired as "surplus" from OKC in October of 2012, into the postseason. Evidently, that turnaround, with Harden's stellar play at its core, was enough to sway Howard to Space City last July.

 

Pragmatism Reigns Supreme

D. Clarke Evans/Getty Images

The point is, the Rockets, the Clippers and the Heat, while blessed to be in markets that appeal to marquee free agents, didn't become draws simply because of those "inherited" circumstances. They all benefited from having smart, opportunistic management at the controls, particularly when those fleeting moments of good fortune fluttered through their respective front offices.

In the NBA, as in life, it's better to be lucky than good—to be in a big market rather than a small market, a warm-weather town over one subject to polar vortices. But those franchises that have the right people in charge, like R.C. Buford in San Antonio or Sam Presti in OKC, make the most of what luck comes to them and can manufacture the rest of the luck they need themselves.

Regardless of the depth of an owner's pockets or the number of television-owning households there are in a given area.

 

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