The players’ proposal calls for increased revenue sharing, saying small—market
teams need relief and it shouldn’t be strictly from the players.
—AP report by Brian Mahoney (2010) regarding NBA labor issues
The impacts of policies are often misunderstood. Team owners and sometimes even players’ unions argue that leagues need policies such as revenue sharing and/or a reverse—order player draft so that competitive balance will increase. Chapter 11 argued that more parity is not always a good thing, and in this chapter we focus on whether or not the result of these policies actually is more balance. It is intuitively appealing to think that lousy teams will increase their winning percentage by drafting the best players, or if bad teams had a share of the larger—revenue owners’ take, then they would spend more money on team payroll. People then believe that a league’s success depends on the ability of larger—revenue market owners, smaller—revenue market owners, and players to come together and agree on these necessary policies that create parity and balance.
The problem is that the entire discussion is predicated on a myth. Theoretically, revenue sharing and player drafts cannot change competitive balance. Empirically, they never have done so. It may be the case that owners and players, not just fans, believe that these policies will help balance. Behind the idea that smaller—revenue market teams need more money is the belief that they will then use the money to become more competitive on the field, court, or ice. But there is no reason to have that belief in the first place, and there is no evidence to support it.