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Why Carmelo Anthony Should Be Banned From Joining the Miami Heat

Will the Miami Heat's Big Three be the Big Four next season? If a recent ESPN report is to be believed, it might. According to the outlet, the 2012 and 2013 NBA champions are interested in Carmelo Anthony, who can become a free agent this summer.

If "Melo," as he is known, were to join LeBron James, Dwyane Wade, and Chris Bosh in Miami, the team could start four potential future Hall of Famers. And assuming Ray Allen comes back, that number would swell to five. Of course, this is only possible if James, Wade, and Bosh agree to a pay cut and Anthony decides to leave the New York Knicks.

Wade (3), James (6), Bosh (1), and other Miami Heat team members on a mural in Miami. Via Alberto Cabello, Flickr.

But it's a mind-blowing scenario to consider, and one that has many fans outside of South Beach questioning its legitimacy. Is it fair? And should Anthony be banned from joining the team?

The parity problem
A growing body of research reveals that parity can boost the popularity of sports, and it makes sense. Competitive balance breeds excitement, unpredictability, and it allows fans to believe that next year is their year.

Among the four major North American sports, the numbers suggest NBA competition is the most imbalanced. Between 1984 and 2013, eight different franchises won the NBA Finals. During that period, 18 different MLB teams won the World Series, 15 NFL teams won the Super Bowl, and 16 NHL teams won the Stanley Cup.

Sports blogger Ben Flack sums it up nicely: "Just about every year when we go into a new NBA [season] you have a really good idea right from the start which teams have a realistic shot at winning the championship."

That's a sharp contrast with professional football, which makes a habit of turning losers into Super Bowl hopefuls -- the Arizona Cardinals, New Orleans Saints, and San Francisco 49ers are just a few recent examples. The MLB, too, typically features a handful of surprising contenders each season, like the Milwaukee Brewers and Toronto Blue Jays this year.

The dollars and cents
Financially speaking, the NBA isn't in a position to ignore this issue. The average franchise is worth $634 million, according to Forbes, versus $811 million in the MLB, and over $1 billion in the NFL.

Likewise, leaguewide revenue -- estimated to be near $5 billion -- is far behind baseball and football, and pro basketball is losing the battle for TV ratings. In 2013, just two NBA games were among the 50 most watched sporting events of the year, according to Sports Media Watch. A whopping 46 of the top 50 were NFL games.

Why does the NBA's parity problem exist?
Some pundits posit the NBA's parity problem is a result of how the sport is structured. A five-on-five basketball game may be easier for a single superstar -- or a group of superstars -- to dominate, in comparison to football, baseball, or hockey. Because of this, the NBA's best players may win more often than their counterparts in other sports. This thinking may be naive, though.

Recent history suggests a phenomenon called "reverse collusion" might also be to blame. According to new research from Florida State's Ryan Rodenberg and Justin Lovich, who analyzed the issue in the Harvard Journal of Sports and Entertainment Law, the Miami Heat may be a perfect example of reverse collusion.

Traditionally, collusion in sports, whether it's used to curb salaries or blacklist certain players, has occurred between owners. U.S. antitrust law generally forbids this behavior, and collective bargaining agreements between leagues and player associations have been tailored to prevent it over the years. Rodenberg and Lovich, however, argue Miami's Big Three is evidence reverse collusion -- between players, not owners -- could be happening in the NBA. They write (emphasis mine):

At its core, assemblage of the Miami 3 [James, Wade, and Bosh] was the result of a select subset of players within the union, supposedly free to offer their individual labor services to the market, acting in concert to collectively impact the market for their services.... In other words, their agency was not "free." 

By this, Rodenberg and Lovich are referring to the summer of 2010, when James, Wade, and Bosh were free agents. Instead of pursuing max salaries with other teams, each member of the trio agreed to a $15 million pay cut to join the Heat. Wade admitted that he and several of that year's free agents discussed teaming up, implying the Big Three's creation was premeditated. Despite criticism from prominent figures like Dallas Mavericks owner Mark Cuban, then-Commissioner David Stern insisted the Big Three didn't violate the NBA's collective bargaining agreement.

How to fix it
While Stern was technically right -- James, Wade, and Bosh didn't do anything wrong under the existing rules -- that's only because the CBA didn't prohibit reverse collusion at the time. And it still doesn't. So should it be rewritten?

In a league that actively attempts to promote parity through a salary cap, luxury taxes, revenue sharing, and its draft structure, Rodenberg and Lovich think the answer to that question might be yes. They warn that by "restricting the labor market through collective action ... reverse collusion could undermine the many institutional mechanisms intended to establish and protect competitive balance."

Whether it's forbidding players from talking during free agency, or capping how many superstars a team can sign, the NBA would be wise to address reverse collusion in the CBA. Unfortunately, the next agreement can't be renegotiated until 2017, and at that point, Carmelo Anthony will have already taken his talents to South Beach, if the cards fall right.

The bottom line
In theory, there's reason to think Anthony should be banned from the Heat. Given that he and James are reportedly close friends, the same potentially collusive process that created the Big Three could form the Big Four. Signing with Miami would require Anthony, James, Wade, and Bosh to take a collective, synchronized pay cut far below what other teams can offer.

But theory is not the same as reality. Most likely, Commissioner Adam Silver won't block Anthony from joining the Heat. Free agency is less than a month away, and the league still has its hands full with the Donald Sterling saga. Alas, the NBA's parity problem might be about to get a lot worse.

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Read/Post Comments (6) | Recommend This Article (11)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On June 14, 2014, at 9:13 AM, DSJ555 wrote:

    One word "SPURS" Yes, I maybe a bit biased, but they have proven "Team" is far more important than "Star(s)." The league will adapt or not. The so called Big Four will only exacerbate the Heat's already critical ego problem to terminal status. Get off the Heat love train, few care about this issue than you can imagine. Anthony would be an idiot to join that train wreck in progress and he probably knows it. True, he'd be better off getting as far from the Knicks as possible, there are myriad teams in the league (Spurs included) that would make far better use of his talents than the Knicks or the Heat.

  • Report this Comment On June 14, 2014, at 11:04 AM, TMFJCar wrote:

    Good article Jake! Way to work business structures into sports -- I never thought about the collusion between players. Plus, Carmello ruins teams and I'm a Heat fan, so...

    Not sure I totally agree that lack of parity is the reason for the NBA's woes (nor would I say it is underperforming when Sterling made a nearly $2 billion profit in a little over 30 years), but that's merely my opinion and a dispute of the study -- not your article.

    Kudos Jake!

  • Report this Comment On June 14, 2014, at 1:13 PM, JakeMann wrote:

    Thanks Jamal!

  • Report this Comment On June 14, 2014, at 1:23 PM, mitchlax14 wrote:

    I was blown away by the fact that only 8 NBA franchises have won the championship in the last 30 years (and that won't be changing either way this year)!

    I knew the NBA had a parity problem but geez!

  • Report this Comment On June 14, 2014, at 3:20 PM, BigEb wrote:

    I'm a Bulls fan...lots of rumors about him coming to Chicago...I would have no problem with MElo coming to Chicago...a few times a year in a visiting team uniform...he is a team obliterator...he can go somewhere else as far as I'm concerned...plays basically offense, and when the ball is passed into him, it rarely gets passed back out...not worth the money he'll demand...

  • Report this Comment On June 14, 2014, at 4:33 PM, creditrisk wrote:

    The big reason for the imbalance is one player is a much bigger difference in the NBA than in the NFL, MLB or Hockey.

    NBA is 5 players per team. And the starters generally play at least 3/4 of the game and can if called upon played the whole game.

    MLB has 10 players a side and most of them aren't involved in every play.

    The NFL has not only 11 per side on offense but 11 per side on defense. And 50 guys per team about. ONe guy helps especially a really good QB. But you need a really good system there.

    One Superstar can turn a chump into a champ overnight in the NBA. And that superstar can play 15 years.

    Hence the imbalance.

    Yes the NHL is 5 on 5. but guys play 1/3 of the game I think.

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Jake Mann

Jake Mann covers sports, economics and politics for the Motley Fool.

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