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Big Salaries for Big Stars in Europe: A Hail Mary

CHN » True Hoop
August 27th, 2008 by CHN
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Ian Whittell does a killer job of analyzing the economics of European basketball, and in so doing makes clear how unlikely it is that LeBron James, or someone like him, would get a $50 million contract offer from a European team. There are lots of reasons to think that the only way such a deal could happen would be if a very deep-pocketed owner just decided to be extraordinarily irrational. For instance: ... many U.S. basketball fans may be surprised at the modest size of European attendances, although they generally make up in enthusiasm and passion what they lack in size. Only three Euroleague teams averaged five figures in attendance last season (Maccabi Tel Aviv, 11,000; Panathinaikos of Greece, 10,357; and Leituvos Rytas of Lithuania, 10,296), while Olympiacos averaged a modest 6,071 for games in Europe, just over half capacity. Obviously, the signing of James would increase crowd size at home and on the road. And the Euroleague's current boom is such that Bertomeu has had conversations with eight different clubs this summer about their plans to build new arenas. But even these new arenas will be smaller than their NBA equivalents, and crucially, average ticket prices, particularly in southern Europe, are much lower than in the NBA. An increased attendance, on its own, will not be enough to finance the signing of a Bryant or James. Aha, you might say, but what about if an owner decided to give a player like Bryant a chunk of ownership! That's all fine and dandy. No rules against it. But remember that if you own something that loses money, ownership comes with negative cash flow. What kind of benefit is that?

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