Is Free Agency Ruining the NBA?

NBA free agency is in full swing. Is it bad for the league?

Jul 2, 2014 at 9:35AM


Keith Allison, Flickr.

NBA free agency is upon us, and this summer may see superstars LeBron James, Carmelo Anthony, and Chris Bosh switch teams, along with a host of other exciting players like Kyle Lowry and Gordon Hayward. But is this process, which the league has allowed for nearly four decades, ruining professional basketball? A group of researchers might have found an answer.

The big question
It's reasonable to think some fans are turned off by free agency and the roster turnover it creates. In many cases, teams lose their best players as a result. The departures of James and Bosh from Cleveland and Toronto in 2010 are recent examples.

On the whole, sources estimate about a third of all NBA pros switch teams each offseason. So, the question remains: Do fans stop supporting their team when players leave town?

Finding an answer
In a paper set to be published in the International Journal of Sport Finance, researchers Alan Morse, Stephen Shapiro, Chad McEvoy and Daniel Rascher analyzed the issue, and found -- somewhat surprisingly -- no statistical link between roster turnover and NBA game attendance.

This flies in the face of similar research in professional baseball. California State University researchers discovered that attendance falls when MLB players change clubs. "Contrary to popular opinion, the findings showed a distinct difference in the effect of roster turnover in the NBA in comparison to MLB," Morse et al. write.

After looking at a half-decade of data, the researchers uncovered several variables -- winning percentage, number of All-Stars, and team history -- that move in step with NBA attendance. The absence of roster turnover from their list, though, indicates criticisms of basketball's free agency process may be unfounded.

Digging deeper
So why do NBA fans care less about player movement than their MLB counterparts? Morse et al. hypothesize that a "purist mentality" could exist in baseball, more so than in basketball. "NBA fans may be more willing to except roster changes in the interest of winning, where MLB fans may have a stronger affinity for specific players," they write.

There's also a chance, according to the study, that "[NBA] fans have become more accustomed to the increase in player movement." This is certainly possible. Reaction to Jason Kidd's move from Dallas to New York a few years back, for instance, wasn't overly critical. Many MLB fans, on the other hand, crucified Johnny Damon after he left Boston for New York in 2005. Randy Johnson, Alex Rodriguez, and Albert Pujols were all similarly vilified because of their decisions in free agency.

The business implications are enormous
This study also has major business implications. Altogether, the NBA's 30 teams are worth nearly $20 billion, according to Forbes, and free agency plays an important role in determining the competitive balance between them. As I wrote last week, the migration of superstar free agents could generate millions in brand income for their winning teams. James' four years in Miami, for example, coincided with a $406 million increase in the Heat's franchise value.

It's also worth pointing out: NBA executives don't need to worry about ticket sales taking a hit if a key player leaves in free agency, holding all else constant. Although specific numbers vary, gate receipts typically make up $1 billion of the league's $5 billion in annual revenue. And equally as important, Morse et al.'s findings imply franchises needn't cater to superstars' offseason demands if they don't improve team play. MLB owners, conversely, must keep this in mind.

The bottom line
Ultimately, more research on this topic is needed. Do NHL and NFL fans care about roster turnover? Or do they cheer on their teams regardless of which players leave? These questions -- and plenty of others -- will hopefully be addressed in the coming years.

Hence the reason why Morse et al.'s conclusions are so important. They indicate that, despite the LeBron hate, free agency is not ruining the NBA.

You may not make millions in the NBA...
But that doesn't mean you can't take steps toward a better financial future. The smartest investors know that dividend stocks simply crush their non-dividend paying counterparts over the long term. That's beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here now.

Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.


Compare Brokers