Wages of Wins

The NBA currently consists of 30 franchises. Of these, sixteen have never won a title. If one looks at the past 50 years, one wonders how the NBA has survived. In this time, the Boston Celtics have won the title sixteen times. The Los Angeles Lakers have been champions nine times. The Chicago Bulls have six championships. A bit of math reveals that three franchises have won 31 titles, or 62% of the championships played over five decades. If we throw in the Detroit Pistons and the San Antonio Spurs—three titles for each franchise—five cities have hosted the NBA champion nearly three-quarters of the time.

The disparity in titles has not improved in recent years. In the past twenty years, only six teams have won the title. Perhaps the good news is that Boston, who has won the most titles in NBA history, has only won once in the last two decades. The other nineteen championships, though, have been captured by five franchises: Chicago Bulls (six titles), Los Angeles Lakers (five titles), Detroit Pistons (three titles), San Antonio Spurs (three titles), and Houston Rockets (two titles). All five franchises won multiple titles across this time frame. Furthermore, on nine different occasions across the past twenty years the NBA champion was a repeat offender. In other words, nearly half the time, if you bet that the past champion would repeat, you would win the bet. So we have a league where the majority of teams have never won a title, and the team that won last year seems to have a decent chance of winning this year. Given such inequity in the distribution of titles, the fans of many NBA teams probably suspect that their team is not likely to win an NBA championship any time soon.

If we look at other sports, championships are distributed a bit more equally. If we look at the past twenty years, spanning the 1985 to 2004 seasons, ten different franchises have taken the Stanley Cup in hockey. Football does a bit better, with eleven teams winning the Super Bowl in the NFL over this time frame. In baseball, the sport that supposedly suffers from a competitive balance problem, fourteen different teams won a World Series from 1984 to 2004. Of these fourteen, only four won multiple titles: the New York Yankees, Florida Marlins, Toronto Blue Jays, and the Minnesota Twins.

Of course, as we noted, playoff results, or the Blue Ribbon approach, will not tell us much about competitive balance. Let’s look at the recent history of the Noll-Scully measure. In Table 5.1 we present twenty years of the Noll-Scully in each of the major North American sports leagues. On average, with the glaring exception of the NBA, each league has an actual standard deviation that is less than two times the ideal measure. Remember from the last chapter, the average Noll-Scully across all leagues we examined was 1.86. So every North American league not playing with an orange ball bested the average.

TABLE 5.1

Twenty Years of Competitive Balance in North America

North American Sports League	Years	Average Noll-Scully Measure of Competitive Balance
National Basketball Association	1985-86 to 2004-05	2.86
American League	1986-2005	1.78
National League	1986-2005	1.76
National Hockey League	1984-85 to 2003-04	1.70
National Football League	1985-2004	1.48

The NBA, though, has an actual standard deviation that is nearly three times the ideal. From these measures we would have to conclude that the NBA is in serious trouble. Baseball, the sport that is supposed to have a problem, looks like a socialist paradise compared to the NBA. So if anyone still believes baseball has a competitive balance crisis, when these people look at the NBA they must expect professional basketball in North America to be in its final days.

If we go back to what we said in Chapter Two, though, we can see this is not the case. For the 1985–86 season the average NBA team attracted 487,604 fans, at that point an all-time attendance record for the league. The NBA has set nine additional attendance records since then, the most recent in 2004–05 when the average team attracted 710,095 people. From 1986 to 2005, when only six teams were able to win NBA titles, per-team attendance rose 46%.We should note that a similar story could be told in baseball. During the Blue Ribbon years (1995–99) when baseball was supposed to be dying at the hand of the dreaded Yankees, per game attendance in Major League Baseball rose 15%.

For those who have invested time in the study of competitive balance, this result is troubling. The NBA, relative to any other league we have examined, is not competitively balanced. Yet fans keep coming to the games. What is attracting the fans in the NBA? Our answer to this question was offered in two articles, entitled “Stars at the Gate” (Berri, Schmidt, and Brook, 2004) and “On the Road with the NBA’s Superstar Externality” (Berri and Schmidt, forthcoming in 2006). Again we suspect many people have not taken the time to read these articles. So in this chapter we review and extend the story we have told.

Excerpts (c) 2006 by the Board of Trustees of the Leland Stanford Jr. University. No further use, reproduction or distribution of this material is allowed without the written permission of the publisher.

Chapter Six Excerpt