Hello sports economics, my one true love.

I have just recently discovered the Points System of the NBL and let me tell you – I can’t think of a more controversial competitive balance tool in any league. I don’t know how I haven’t come across it before. Seriously. I absolutely love it.  But, then again, I have a soft spot for things that are really bad ideas.

One thing that everyone in sport or watching sport, whether they know it or not, is concerned about is competitive balance.  Seeing the same teams win every year, or seeing the same teams lose every year is damaging to the league and can lead to lower viewership and attendance.  To prevent this, leagues have numerous techniques implemented to maintain a level playing field such as salary caps, reverse order draft and revenue sharing.*  The NBL has those things, but they also have a points system.

The player points system is easy: each player is assigned a point value of 1-10 based on their performance the past year, and each team can only have 70 points worth of players.  Each number value also corresponds with a maximum wage (an individual salary cap, if you will).  Rookies and first year players have a predetermined value.

So amazing and yet, so terrible.

WHY IT’S AMAZING
This is a very easy way to value players, which can be tricky.  There is always a question of whether free throws are worth more than blocks or three pointers are worth more than lay-ups (in a monetary sense) and so on and so on… and this system makes all those questions irrelevant.  The rating is decided upon by the NBL, NBLPA and an independent assessor (someone who knows about basketball, but has no affiliation with the NBL or NBLPA) so the ratings are likely to be quite accurate, as each player is assessed based on his position, contribution and in comparison to other players and his previous performances.

Furthermore, it looks like a great tool for competitive balance.  Sure, a team could select seven 10 point players and call it a day… but they need to be much more strategic.  Will their salaries with under the cap? What if someone gets injured? There are so many questions that would prevent this from happening and, therefore, prevent all the talent from going to one team.

And maybe it’s just the girlfriend in me talking, but think of how useful it can be for fantasy basketball (my boyfriend spends nearly every day from May to September on the computer, reading AFL Dream Team blogs)!

WHY IT’S TERRIBLE
I don’t think I have ever seen a more obvious restraint of trade out there.  Restraint of trade, simply put, is something that interferes with the free market.  It’s especially controversial in professional sports because contracts interfere with several free market principals, most prominently: employer (which team can hire a player) and salary.  Lots of people think that professional sports are a special case and yes, they are, but think of it this way: can you imagine if you wanted to quit your job and work for another company, but your current company has the right to say no and, when it finally agrees to let you go, the government says they can only pay you a certain amount, because you’re not worth more? Let me tell you that if that were my situation: IT WOULD NOT GO DOWN. And yet somehow, in professional sports, it does every day.

This points system does not allow the free market in the league to work to it’s most efficient point and therefore is restraint of trade which, I’m sorry to say, is illegal (at least… it is in the US…). Typically, sports leagues are excepted to this, but that doesn’t mean the players have to accept it.  I’m wondering if/when the NBLPA is going to do something about this…

*If there was perfect competitive balance (which is probably impossible), every team in a league would have a .5 win percentage, meaning every team would win only half their games. Any variance means the league is unbalanced, although in a perfectly balanced league… who would be the winner?