Last week I wrote a post about the rising importance of attention.
From social media, celebrities have more ownership of communication channels with fans. This has interesting implications when it comes to sports.
In the NHL, NBA, and NFL, there are salary caps with maximum salaries.
The idea behind these max salaries and salary caps is to improve fairness and prevent the richest teams from outbidding the poorer teams for all the best talent. But in reality, these limits will increasingly make talent distribution more and more centralized as the attention economy develops creating more opportunities to monetize celebrity.
With shoe/equipment deals, Podcasts, Youtube Channels, Twitch streaming, endorsements, and other entrepreneurial opportunities star players can capitalize financially on their personal brands. The growth of opportunities off the court is seriously outpacing the growth in salaries coming directly from sports.
Especially for star players in a star-driven league like the NBA–where a max salary means that Lebron is making less than Russell Westbrook and only slightly more than Blake Griffin, Gordon Hayward, and Kyle Lowry—the off-court earnings will become increasingly more important and off court, opportunities are not distributed equally across the league.
Playing for the Phoenix Suns or Milwaukee Bucks comes with less off-court earning potential. To compete, those teams need to be able to offer more on-court, to compensate players for the off-court “losses.”
The salary cap which was designed to help small market teams actually ends up hurting them because they can’t pay more to lure players.
Instead, teams that can provide the biggest boost to an athletes personal brand have a massive advantage. They don’t have to compete with other teams that can pay more and it is very difficult for other teams to increase the personal brand potential. The only way they can do it is by winning, which becomes a chicken and egg scenario.
The dynamic of players wanting to go to marque destinations has always existed, but the capping of salaries and boom of online opportunities will make it more dramatic.
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