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Draught Draft

by M.G. Siegler

 

The NBA’s Billion-Dollar Bear Market

www.wsj.com

Ben Cohen:

To understand how the pool of money for players went dry, it helps to look back at the summer of 2016, when free agency turned into a spending bonanza with lasting effects that are still being felt today. NBA teams were richer than ever after a one-time spike in the salary cap and couldn’t help but splurge. They signed almost 150 free agents to contracts worth more than $3.6 billion, according to Spotrac.
It was the single greatest time in the history of mankind to be unusually tall and incredibly athletic.
But the market cooled last year and remained chilly this year. The total spend of NBA teams in free agency dropped to about $2.4 billion last year and roughly $1.7 billion this year.

This was inevitable and entirely predictable. The NBA made a pretty big mistake in not smoothing out the television contract money. And there have been even more trickle-down effects of this. Still, it feels like the lumps have been taken for now, but the issue with sports television rights remains a fascinating one going forward.

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