Great post, thanks for sharing your opinion
Do you feel that, the fact that social media and changing media landscape means endorsements and marketing isn't big market specific anymore, makes up (somewhat) for the problem you raised?
Social media and the changing media landscape
somewhat help as far as players having endorsement/other off-the-court opportunities.
But I don't think it makes up for the accelerating economic gap between the largest metro areas in the country and the stagnating/declining interior.
Here's how I think about the factors that put smaller markets at a greater structural disadvantage than ever before:
1) Small markets experience economic stagnation / decline relative to larger markets - this is something new in the US, as for most of the country's history, growth rates were roughly equal across geographic areas (with some exceptions like Montana or Wyoming, etc.)
2) Small market teams are unable to generate gate, local TV and arena sponsorship revenue anywhere near the levels their larger-market competitors. This gap continues to grow. Additionally, because of the lower earnings of smaller-market team fans, advertisers aren't willing to pay nearly as much to reach them, compounding the problem.
3) The lack of revenue means that small-market teams are unable to invest as heavily in practice facilities, amenities, etc. that would make them more attractive destinations for free agents.
4) The relative lack of economic opportunities hamstrings small-market teams' ability to recruit high level front office talent (it isn't just about the GM and the head coach - you've got analytics staff, assistant coaches, etc. who all have spouses that also work, and will be less likely to find employment comparable to their large-market options in a smaller market).
5) In order to make up for the gap in attractiveness between large and small markets, small-market teams are forced to overpay for quality front-office talent - or pay market average salaries to well below average front office staffs.
6) Now the small-market teams are in a bind - they've got less revenue to work with than their larger-market competitors, while being forced to pay
more for front-office talent equivalent to their large-market competitors.
7) To add to the financial bind they're in, smaller markets are by default unattractive destinations for free agents. To make up for that, they either have to overpay free agents, or rely on their (already usually inferior due to financial constraints) front office talent to continually outperform their peers in the draft.
8) If a small-market team has successfully navigated all of the structural advantages laid out above, and been able to draft high-level basketball talent, they now face the spectre of that talent jumping ship as soon as possible to take advantage of large-market off-the-court opportunities or being forced to offer the supermax contract to players who might not necessarily warrant it (which severely constrains their roster flexibility).
9) Let's not forget the impact of the luxury tax (because of the NBA's soft cap) on all of this. The most profitable NBA team last season I believe was the Boston Celtics (per Brian Windhorst on one of his podcasts - someone leaked NBA internal financials to him). They weren't in the luxury tax, and yet even with all of their structural advantages (preferable destination for free agents, high-income, high-economic growth region, lots of luxury suite revenue because of local corporate headquarters, etc.), they did something like $29 million in profits. The minute you enter luxury tax territory, whatever profits were being generated by the franchise pretty much evaporate...and yet going into the tax is probably the only way a small-market franchise can keep good players its drafted (remember the OKC Blunder...).
I don't see any of this as good for the competitive balance of the league...moving to a hard cap would help some, but ultimately the NBA may have to look into some sort of "gross-up" (read: additional payment that comes from large-market franchises) that doesn't count against the cap for players willing to play in smaller markets. That's the only way I can think of right now to help close the widening gap.
