Chicken or Egg?

A recent responder to one of my posts thought that the talent in a league getting 60% of the revenue for that league seemed low. His/her argument was that the talent brings in the audience and, without talent, the league fails.

Yet, without the league, there is no recourse for the talent to shine and bring in ad revenue and gate. Most of the professional leagues were created well before there was a "talent pool" from which to pull to increase the gate.

It becomes something of a chicken and egg argument-- if there is no league, the talent can't shine and without the talent, the league doesn't shine.

I fall on the side of the league. If you have a venue, a certain core audience is going to find you and pay attention. By doing this, the audience allows the league to make a certain amount of money. Now, if spent wisely, the league can go after talent (possibly from other sports or from college ranks, etc.) that may be unique and interesting enough to expand the audience, which brings in more money.

For example, the NBA survived for many years with little of what we would call super-stars today. People were not paid as well and they didn't make the news or onto sports shows (which were also in their infancy). However, it was popular enough that other people decided to compete against it and created the ABA. The ABA took a different economic model toward its product, hyping the excitement of the players and the talent pool more than the game or match ups. It then actively pursued talent like Dr. J, which then brought in more revenue. In the end, the NBA bought out the ABA, learned some lessons from it, and started hyping the talent as another means by which to bring in money.

Soon, it had the talent like Magic Johnson, Larry Bird, Isiah Thomas, Charles Barkley, et al, to market around, further increasing its ability to market, get on the TV and into sports news, and bringing in more revenue. Finally, it created the quintessential marketing person for the industry, Michael Jordan, and the money shot into the stratosphere. Players were able to demand more, every team needed a "super-star" in order to compete for gate, TV time, and ad revenues.

Now, all those who play in the NBA feel a sense of entitlement that they deserve that money, even though the gate is down, the ad money is drying up, and the league is losing money in many areas due to the current economic crisis. You have people making millions a year in the richest league (by average player salary) in the land feeling disrespected that they can't get a contract extension, can't get a new contract, or can't force a trade-- all during a time when the jobless rate is hitting highs never before seen and the people who ultimately pay those salaries cannot afford to go to see the product OR the talent any more.

So, while I respect my Anonymous responder's argument, I see it from the other side: without the league and the fans, there is no talent and that talent doesn't get paid. So that talent better be willing to make sacrifices and be careful of how he talks about his millions to those unfortunate people who are out of a job, lost their life's savings, and are desperate for help.