- The owners correctly understand that they have a present monopoly in government-subsidized professional basketball facilities and IP (trademarks and all of the team loyalty that come with them), with high barriers to entry for potential competitors for player labor. The owners also have legally-sanctioned cartel status (which prevents the development of a free market in player labor) and legacy contracts that impede player mobility. The owners want to leverage their monopoly and legal-cartel status to set a below-market rate for labor.
- The players correctly understand that they have a present monopoly in a specialized good (elite-level basketball ability), with legally-sanctioned cartel status and natural scarcity creating a high barrier to entry for potential competitors in that good. The players want to leverage their monopoly in that good to extract monopoly rents for it.
I'm rooting for the crash and burn, because, ugh, the NBA. No group of owners has so greedily squeezed fans and governments, and no group of players has been so frequently placated by huge salaries into indifference to substandard product. The NBA (and particularly NBA owners) are counting on their losses being small enough for the duration of any lockout that they will make it back quickly with the benefit of a new labor model and the corresponding increase in franchise values. What I hope is (a) that fans remember that NBA owners would rather murder fans than give up a penny of revenue; and (b) more importantly, that local governments realize that the lockout-loving NBA is the same NBA that, when the lockout is over, will promise endless economic bonanzas to induce arena subsidies and tax breaks for NBA teams. Hey, cities: what's Oklahoma City's return on its $210 million investment to steal the Sonics going to be this year?
