Today a lot of young basketball fans do not understand the way the NBA works as business. The NBA acts as a legal cartel that has exploited its talent for decades. Rolling Out has compiled a list of little known NBA (National Basketball Association) and ABA (American Basketball Association) facts:
- The ABA existed from 1967 to 1976, for nine full seasons. During that time, the ABA fought a bitter war with the older National Basketball Association (the NBA) for players, fans, and media attention.
- The ABA had the most black players who had more flashy style and many who sported afros.
- In June 1976, the two rival leagues merged. Four former ABA teams; the New York Nets, Indiana Pacers, Denver Nuggets and San Antonio Spurs, were admitted as NBA franchises for a fee of $3.2 million. The rest of the ABA players were spread through the league in a dispersal draft.
- This merger gave the NBA a monopoly over the professional basketball market in the U.S.
- The NBA Draft – The draft allows all the teams to pick players based on lottery system. Players who do not get drafted are free agents and can offer their services to the highest paying bidder. The players who are drafted get paid on a scale that is predetermined and they can’t offer their services to the highest paying franchise.
- Cartels are illegal in all other forms of business except professional sports.
- The NBA acts as a cartel because it is protected from competition due to territorial exclusivity. It has control over the number of franchises in the league and it controls ticket prices.
- Other team owners must approve all potential owners of a team.
