I posted this Saturday, but apparantly it didn't go through. Honestly, I remember doing it and am so surprised it's not on my blog. Here it is:
There is no better way to illustrate what we learned this week about demand then to see it from the context of the NBA lockout. The owners and players are attempting to capitalize on the increasing demand for professional sports entertainment by trying to increase their own share of capital gained in the collective bargaining agreement (CBA) between the two sides. The previous CBA, signed in 2005, was meant to heavily favor the players, who knew that the demand for professional basketball depends directly on whether the absolute best players are competing. If owners decided to hire worse players instead of the members of the NBA Players Union, the demand for basketball would decrease and the ability to make a profit would be diminished significantly. Likewise, people would be willing to pay more to see a team of 13 great players and 2 superstars than for a team of 10 ok players and 5 great players. Now, though, the owners know that as the lockout continues, the demand for basketball will increase to the point where fans will either accept the lower quality players acting as “scabs” during the lockout to the NBA Players Union or will lose interest leading to a decrease in the overall demand for basketball (similar to the fallout from the “lost” 2004-2005 NHL season), which would fundamentally hurt the league. Overall, the players and owners need to gauge just how much demand there is for the league and take into account how it will affect the income of the NBA teams in the following seasons.
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