I find it difficult to spend too much time talking about free agents and trades while there is still a lockout, so here's more on the economics of the NBA. The problem with the lockout is that the owners are acting as if everyone but themselves is ignorant of basic principles of economics (or even accounting). Today what I would like to talk about is the concept of economic rent, and the fact that it is the players, not the owners, who should receive the bulk of economic rent in a professional basketball league.
I'm not really paying to see you, sorry.
Here's wikipedia's definition of economic rent:
Economic rent is typically defined by economists as payment for goods and services beyond the amount needed to bring the required factors of production into a production process and sustain supply.[1] A recipient of economic rent is a rentier.
There are many ways one can collect economic rent but perhaps the easiest way is to control a scarce resource (example: if you own land that has oil on it, you could allow a company like Shell to mine for the oil on your property in return for a percentage of profits from the oil). When we look at the NBA, this scarce resource is basketball talent (which is often a subset of other scarce resources such as very tall people), and this explains why a professional basketball player earns much more than "the amount needed to bring the factors of production into a productiong process and sustain supply".
Another way to put this is that putting on a basketball game requires some equipment (shoes, uniforms), a venue, some refs and scorekeepers, and a bunch of scheduling beaurocracy. Yet, the players seem to receive a hell of a lot more money than is required to cover those basic expenses. This is because the players (not the owners) are the ones who control the scarce resource that everyone cares about: the ability to play basketball at the highest competitive level. The Economist even explains economic rent using a professional sports example:
Confusingly, rent has two different meanings for economists. The first is the commonplace definition: the INCOME from hiring out LAND or other durable goods. The second, also known as economic rent, is a measure of MARKET POWER: the difference between what a FACTOR OF PRODUCTION is paid and how much it would need to be paid to remain in its current use. A soccer star may be paid $50,000 a week to play for his team when he would be willing to turn out for only $10,000, so his economic rent is $40,000 a week.
The owners would like you to believe that they are the ones with "market power"; that the scarce resource here is the one they supply: the NBA's huge marketing machine, the endless beaurocracy around scheduling and booking arenas, the ticketing sales forces etc. That, in effect, you all watch basketball because you love the NBA brand, and not the individual players. If your local franchise hired a bunch of high schoolers to play, you'd still turn out to watch. But even the most casual fan must recognize that this is bullshit. The NBA brand does not matter if there is no basketball talent. There's nothing inherently special about the NBA brand in the absence of its star players; if there is money to be made by hosting professional basketball games (and as Arturo and many others have pointed out, the owners are lying when they claim that there is not), there's a never-ending supply of entrepeneurs who will line up to pay basketball players to pay under other brands. And the supply of money is large, because all those dollars that pay for the players don't just soley come from owners pockets -- they originate with the fans paying for tickets and the fans watching games on TV (which causes networks to pay for broadcasting rights). Do the owners really think our dollars would disappear if they were replaced by different owners? Do they really think that the players are stupid enough to think that as well? Well, I'll leave it to you to decide whether men who have spent their lives earning such large sums of money are truly that ignorant about the basics of economics.
The signings in Europe are only the first indications that players are becoming aware of how untenible the owners position is. If this lockout gets very serious, I believe player-funded leagues like the ones that Arturo Galetti and David Berri have suggested will start to gain traction. What do you think? Would you pay to watch your favorite players play, even if they weren't in uniforms that said "NBA"?