One of the many benefits of basketball is that it allows us to escape a little from heavy and painful current affairs. Thinking of big, billionaire guys in shorts throwing the big ball into the basket is something that soothes the heart.
So the Celtics, new (and still NBA champion). 18. 18 titles for the guys in green, the most successful franchise. When I think about this title race, I tell myself that for many managers, this is not the main objective: franchises are businesses, what counts is the players. So I looked at this a little bit. Not really in the way of an economist, no (although that might be my job). But almost all the same :).
4 franchise groups
In terms of NBA titles, there are 4 groups of franchises:
– THE Dynastic champions : Celtics (18), Lakers (17), Warriors (7), Bulls (6) and Spurs (5). note here that only the Lakers and the Celtics have known several dynasties.
– THE Occasional Champions : Sixers, Pistons, Heat, Knicks, Bucks, Rockets, Kings, Hawks, Blazers, Wizards, Thunder, Mavs, Cavs, Raptors, Nuggets, qui ont gagné entre 1 et 3 titres
– THE 0 points : Suns, Jazz, Nets, Magic, Pacers, Hornets, Clippers, Grizzlies, Wolves, Pelicans, which still represent a third of the teams.
We can clearly see here the extreme concentration of franchises capable of winning titles.
Capitalization
Faced with this race for victory, the race for dollars. By crossing these victories with the capitalization of the franchises, we find:
– franchises grosse capitalisation et dynasties : Warriors, Lakers, Celtics, Bulls. Here, the Spurs are clearly outliers, being only the 20th capitalization in the NBA.
– Franchises to large capitalization and good recent results (conference finals or more in the last 5 years): Celtics, Lakers, Mavs.
– The mid-caps and good recent results : Heat et Denver.
– THE large caps & poor results : Knicks, Clippers, Bulls, Nets.
We can see quite clearly here a big correlation between the capitalization of franchises and their sporting success. On the other hand, the least capitalized franchises have had little success in recent years (and have never won the title): Grizzlies, Wolves, Pelicans, Pacers, Magic, Hornets, Thunder.
What is interesting is that several of these teams have great sporting prospects for the years to come… if they manage to retain and develop their young talents, which can be difficult because they are poorly capitalized.
Market size
Beyond this correlation, sporting success is far from being the only factor explaining the capitalization of a franchise. Because winning is good. Selling jerseys is better. Market size is therefore essential.
We can easily see that the largest capitalizations are located in the largest markets: New York (x2), Los Angeles (x2), Chicago; and vice versa: Memphis, Minnesota, New Orleans, Orlando…
Thank you salary cap
Overall, we feel that economics and sports are closely intertwined: big markets attract big stars and thus increase the chances of a title. However, the NBA has this advantage of allowing small and medium-sized franchises to do well, when their leaders are up to the task.
Here we can thank the salary cap, which makes it possible to reduce the differences between large and small franchises in terms of payroll, even if the big markets can attract the biggest players for advertising revenue and other business opportunities.
2024-06-20 20:09:51
#title #real #objective #NBA #franchises
