Jon M. Huntsman School of Business

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Wednesday, November 16, 2011

NBA players should form their own league

Memo to: All NBA Players (Past & Present)

From: Eric Schulz

Subject: Game Plan for Starting Your OWN League

Congratulations on turning down the latest proposal from the owners. Bold move. Now, here’s something to think about. How about thumbing your nose at the NBA and its owners, and start up your own league – the UBL (Unified Basketball League)?

When the NBA was formed decades ago, it needed rich people to make it work. But it doesn’t anymore. YOU are all rich people. Screw them. They locked YOU out. You don’t need “owners” anyway. It feels so aristocratic. They want a nuclear option? Well here it is. Blow up their entire system and put them all out of business. You want to strike fear in their eyes – this is it. Starting a players-owned league isn’t that hard, and in fact, you can do it much cheaper and streamlined than they can. And if YOU own the league, YOU keep ALL the revenues, not just half. So, here’s your game plan.

Eric D. Schulz
1) Form A League Where All Teams Are 100% League Owned. This gets rid of “the man” (David Stern, league lawyers, and all the “owners") and you are in complete control. Make your own TV / media deals. Sell your own sponsorships. Sell your own tickets. Instead of having 30 different teams operated by 30 different groups all doing 30 different things, you’ll have ONE centralized system for everything managed at the league level. Each city would need a small staff, but nowhere near the size they are now. And the economies of scale you’d have from one ticketing system, one licensing / sponsorship group, one building leasing group, and one media division would slice out a lot of the costs of doing business that currently exist, and give you great negotiating leverage.

2) Pay Each Of Yourselves A Base Salary + Incentives + Cash Shares That Are Divvied Up At The End Of Each Season. There would be three pay components for every player:

a. Set up your league so that everyone on every team makes the same amount of base salary during the regular season.

b. But here’s the twist --everyone on each team earns a $50,000 bonus for each regular season victory, and a $250,000 bonus for each post-season victory. So, you get paid to play, but you get paid more to win!

c. At the end of the season, you divide the remaining league revenues amongst yourselves, based on a statistical model with the players who performed the best and put butts in the seats (Kobe, Dirk, Kevin, Dwight, LeBron, et al) getting more.

So how would this play out? Assume every player in the league is paid a base salary of $2 million. A team that wins 50 regular season games (earning an additional $50,000 per win) would earn bonuses of another $2.5 million each.

Then, for every playoff win, each player on winning teams makes a $250,000 bonus. With 16 post-season victories needed to win the championship, that’s another $4 million for each player on the championship team. Add it all up, and every player on the championship team would earn a total of $8.5 million as their salary, plus a share of the remaining league revenue splits at the end of the season based on the statistical model. Oh, and by the way, with this system, you can all stop paying your agents 3-5 percent of your salaries. No agents needed!

3) Level The Playing Field Every Season For Every Team. We all know that none of you like living in places like Utah or Minnesota during the winter. Miami and LA are the places to be. We get that. So here’s another twist. Let’s make our league work like fantasy sports. Every year, we redraft new teams, done by random draw (to keep teams from trying to tank it at the end of the season). So, the NBA Draft becomes a draft of EVERY PLAYER, not just rookies. Twelve rounds. Pick your your 12 players for this season. So, if the first ping-pong ball goes to Memphis – you want LeBron, OK he’s yours. Second pick to Dallas – you want Kevin Durant, he’s yours. Third pick to Phoenix – Kobe it is. And so on. This would eliminate the current systems problem of having all the top talent purchased by over-cap spending large-market teams, and spread the best players all over the league, making it more competitive, and giving every team the chance to compete for a championship every year. It also gives every team a chance to have LeBron, or Dirk, or Kobe, Kevin, Dwight, D-Wade, D-Will and others play in their city for at least one season of their career. What would this do to league licensing revenues? Think about it. Now I need to buy a new jersey for my team’s favorite player EVERY year, at $125 retail! And for you players, if you are drafted by Minnesota or Utah, it’s not a death sentence – you’re only stuck there for one season, then can get redrafted by somebody else!

That’s it – a pretty simple operating model that would raise the boat for all of you and stick it to the man. So let me know when you want me to get going on this for you. We should be able to have the UBL up and running by next season. I’ll be your first league commissioner – and we’ll put headquarters here in Logan, Utah to keep down costs!

- Eric D. Schulz

Eric D. Schulz is the Co-Director of Strategic Marketing and Brand Management at the Jon M Huntsman School of Business at Utah State University. Prior to joining the University, he spent five years as Vice-President of Marketing for the Utah Jazz (NBA); he previously was VP of Marketing with the XFL Football League, and served as a General Manager in minor league baseball. He can be reached at

1 comment:

  1. What would add more salt to the wound would be to have the games played in the current NBA centers