The NBA's European Dream

It was announced the other day that Russian billionaire Mikhail Prokhorov has reached an agreement to purchase the New Jersey Nets as well as contribute funding for the construction of a new arena in Brooklyn (as well as accompanying residential and commercial space). While I think this is a great deal for the NBA and international basketball, I can't help but wonder if this is going to reinforce David Stern's belief that the NBA could expand into Europe.

As much as I would love to see further expansion of the League itself and think that having European Division would be a great accomplishment, I just don't think it is feasible for a number of reasons, such as the extra travel incurred by the players and potential economic factors (exchange rates and tax issues). However, those are all solvable. One major issue just does not have a solution, at least that I can see.

That issue is a natural competitive imbalance. Even in a League with a salary cap, rookie wage scaling, and a draft, this will be unavoidable. Here's why:

1. Right now, highly regarded rookies are subject to a rookie wage scale. Euroleague teams are not subject to this constraint and can offer a better contract, financially, to an NBA draft pick (which is why Ricky Rubio is with is with FC Barcelona instead of the Minnesota Timberwolves). There will inevitably some rookies who will say to themselves, "If the London NBA team is offering me X dollars, but Real Madrid is offering me more than X dollars, I should go play for Real Madrid since either way I will be playing in Europe." NBA teams will still retain the rights to the drafted player, and after 3 years, the player will no longer be subject to the rookie scale, but even then, the NBA team can still be outbid by a Euroleague team.

2. Canada-based teams, and even some teams based in remote areas of the United States like Minnesota, have trouble recruiting players to come play for them. Why would any American-born star free agent who generates enough demand ever go play for a Europe-based team? Granted, some Europe-based teams might have an advantage in being able to recruit European-born players (could a Berlin based team sign Dirk Nowitzki away from Dallas?), but the edge will still be held by US teams.

3. Players who do not want to play for Europe-based teams will inevitably find ways to prevent trades to or force trades from those teams, either by threatening to retire or just not reporting, and will eventually even further limit the ability of Europe-based teams to acquire talent. This already happens with Canada-based teams (Steve Francis and Alonzo Mourning are well known examples).

4. In order to acquire talent that Europe-based teams need to compete, these team will likely have to overpay free agents to play for them. This leads to inefficiently built teams, because the premiums paid to entice players is less money under the salary cap to pay other players.

How can a team that is at a disadvantage in acquiring players via the draft, free agency, or trades unless use their resources inefficiently compete? I just don't see any way this is avoidable. The solution to establishing an NBA presence in Europe will take a much grander proposition than Commissioner Stern's. I think he has been an excellent commissioner and has expanded the NBA brand further than anyone could have dreamed, but I don't see this dream, in it's current form, coming to fruition.