The exchange rate issue is temporary. Even if the dollar remains weak, market forces will equalize the disparity in contracts. But as Clip Show says, the economy will likely improve and the exchange rate will move back to the dollar at some point. It’s a pendulum. But Childress took advantage of a window right now. Was his agent smart enough to negotiate some protections against currency fluctuations in the next three years? That’s probably too much to ask.

Love the narrow-minded/open-minded comment. One request: could you please let us unenlightened know how you come up with the tax/no-tax figures (ie Brand’s contract being similar to Childress’?). I wish I knew more about that kind of stuff..

to obtain dual citizenship based on Kaman being able to do that based upon the fact that his grandparents were born in Germany.

John R to be done reading the Euro leagues’ CBAs?

Josh Childress, former sixth overall pick in the NBA draft, and a player who played very well for an Atlanta team that put a real scare into the eventual champions, is leaving the NBA to play for Greece.

He signed a contract today with Greek powerhouse Olympiakos, in Athens, at 2:30 p.m. local time. (You can see pictures of Childress smiling over his contract.)

His agents made clear in a conference call today that when taxes and incentives - including the use of a very nice home - are factored in, Childress can make more playing in Greece then he can in the NBA.

There have been plenty of NBA players who have turned down NBA jobs to play overseas, including Juan Carlos Navarro, Tiago Splitter, Bostjan Nachbar, Carlos Delfino, Primoz Brezec, and Fran Vazquez. There have also been Americans like Pops Mensah-Bonsu and Loren Woods who have chosen European contracts over hanging around and hoping an NBA team will pick them up.

But Childress is the first American player in line to make big money as a key part of a good team who has decided to ditch the NBA.

As NBA fans, how should we take this?

Just about every reaction I have seen from NBA fans has been along the lines of “oh no, this is bad for us.”

My reaction is exactly the opposite. Unless you’re a fan of the Atlanta Hawks, have a party! This might be a little bit of a short-term black eye for the NBA, but this is great for NBA fans, and ultimately, the NBA.

There are lots of reasons I say that, and they all have something to do with real deal free market capitalism - with its many pressures to prove, daily, that you’re the best - coming to parts of the NBA where they have long been absent.

With all due respect to the ABA, the NBA does not have competition, and has not since the merger with the original ABA. That is good in some ways, I guess. It keeps things tidy for us fans. But it’s not so good for keeping the League office, the team front offices, the players, and everyone else on their toes.

In most businesses, if you do things in an inefficient manner, eventually your competition will come along and do it better, cheaper, faster, etc., and they will hurt your bottom line or put you out of business entirely. That’s how the free market forces efficiency on us all. It’s painful at times, but it sure teaches some strong lessons about figuring out what’s most important and constantly evolving.

The NBA really does not have to deal with that. They have to win fans away from other entertainment options, yes. But they really don’t have to win fans from other professional basketball leagues.
I can think of a thousand ways that the NBA is inefficient. Off the top of my head:

There is a vast “boys club” that manages many NBA teams. You know the names. Once you are in the club of people who make big NBA basketball decisions, you’re in whether you’re particularly good at your job or not. Meanwhile, there are all kinds of people who were born to do the work, but are locked out because they lack the basketball pedigree. (Sometimes a Jeff or Stan Van Gundy, Lawrence Frank, Ed Stefanski, etc. will buck the trend.) If, as an NBA owner, you’re competing strictly against other teams that select their leaders from the same small pool of candidates, then you’re probably not going to suffer too much from recycling the same coaches and GMs again and again. But if some teams are really casting a wide net and finding better coaches, better front office people, better trainers, better player development people, and better players from all over the world then that brings around a level of basketball that is just higher, and that is good for us fans. This Childress move is a step in that direction, as in some small way, a real deal NBA player signing in Greece tells us that NBA teams are, in fact, competing with Euroleague teams in ways we had not thought they ever would. (One of Childress’s agents, Lon Babby, said today that when the negotiations were unfolding, the Hawks organization “obviously never contemplated that we’d go outside the NBA.”) There have been lots of reasons for smart NBA people to learn from Europe, and vice-versa. Now here’s one more.
The NBA has a deeply entrenched superstar system, built around those who score the most points. Despite what the League might tell you, the stars get the calls, the stars get the ball, and the stars get the marketing dollars. The stars can even get coaches fired. There are reasons for all of that. But the truth remains that, if it’s just about winning basketball games, that star system, and an obsession with points, can be a burden. (A lot of “stat geek” work is really the quest to isolate what, beyond obvious stuff like points, really matters to winning.) Childress made clear that in his conversations with Olympiakos, and with other people knowledgeable about European basketball, he learned that the system was different in Europe. “I assumed that I’d have to go average 20, 22 points a game here,” he explains. “But the Euroleague MVP most years averages like 12 points, five rebounds, and five assists. It’s an award that the guy who actually helps his team win the most wins. ... My coaches here just want me to be versatile, and to play four positions, and to help the team win as many ways as I can.” Some of that mentality wouldn’t hurt the NBA any.
The NBA’s collective bargaining agreement includes a ton of complicated clauses. Each serves a purpose, and you can make a case that, all told, it’s a good and fairly fair system. But regulation is always burdensome, and this league, famously run by lawyers, is knee-deep in legalese. In this instance, those rules created a really weird deal. According to Josh Childress, there were championship-contending NBA teams that were willing to pay him more than the Hawks would. A sign-and-trade couldn’t be worked out, so Childress was stuck. But that makes a situation where here’s an employee, a place that wanted to employ him, and an agreed upon price. In normal human life, that’s all you need to make a deal. You can only tinker with the free market so much before it starts depressing normal economic activity. This is one of those cases. A rule (essentially, the salary cap) designed solely to keep NBA teams competitive with each other now ends up helping a whole different league. Will the NBA change the salary cap in some profound way to address that? Babby, for his part, says that he would “never underestimate the capacity of the NBA to respond to market trends.”
On-court NBA rules could be hurting the game a little. For instance, Childress pointed out that in Europe he may suffer a little getting used to a league where more aggressive hand-checking is allowed. I like a game where little guys can get to the hoop, but if the NBA’s interpretation of that rule is making players who can’t compete as well, then that’s worth knowing and possibly addressing.
The League itself, in the way it addresses the public and the players, often strikes me as arrogant. There are all kinds of stories swirling around about referees being crooked, and yet the NBA continues not to feel the need to speak frankly and openly with fans. That dress code sure seems paternalistic, doesn’t it? No one is all that impressed with the process that got the SuperSonics to Oklahoma City.

Or, consider David Stern’s handling of a John Hollinger question during the NBA Finals. At that moment, the Spurs had just lost top draft pick Tiago Splitter to a bigger contract overseas, which seemed to be the latest shot in a growing arms race between the NBA and Europe. Stern apparently knew nothing about it, and denigrated the very notion that the NBA could be hurt in such a manner.

In all those cases and many others, the NBA gets to handle things essentially however they want, because when it comes to elite professional basketball, they are the only game in town.

That all changes when top talent starts going to other leagues. Josh Childress himself doesn’t scare the League as a business. He’s a potential starter on an OK team.

But if it makes sense for Childress, it’s hard to promise that you’d never see a Carmelo Anthony or Chris Paul give it a whirl.

Josh Childress has opened some doors.

One of them is to American fans, many of whom will check out European basketball for the first time this season. It’s a good brand of basketball. It may open people’s eyes to some ideas that could make the better.

There is also, of course, the chance that Childress will be a trend-setter.

I find that economists often have overly simplistic ways of analyzing things. Many will tell you, for instance, that if a business offers to pay employees more in Toledo than the similar factory in Kansas City, then workers will move to Toledo. (But what about their friends, I wonder, what about the corner coffee shop they’d hate to leave behind?)

For a long time, a good counterpoint has been American professional basketball players. Many could make more money in Europe (including a huge percentage of D-Leaguers), as Childress has done. But those Americans with offers to play in the NBA tended to play, even though plenty of Americans raved about life in Europe.

The main thing that kept them here was the brand. The NBA. Write those three letters as large and as bold as you’d like. They are the reason players stayed up late in eighth grade perfecting the jumper, or the leftie spin move. The NBA was, and is, the dream, even for some players who grew up in Europe.

In the eyes of many American players, more money from somewhere besides the NBA was just more money. It was not the NBA. It was not the dream.

But now Josh Childress - an open-minded and intelligent Stanford guy - is sending out a piece of news that he has done his homework, he has checked out the scene in Europe, and he finds the situation to be … extremely nice. Nice enough that it’s worth comparing the apples of an NBA contract with the oranges of a Euroleague contract.

That’s a new way of thinking to Josh Childress’s contemporaries, who are some of the best players in the world. If he ends up reporting that life continues to be nice in Athens, well then that has to change how almost everyone in power in the NBA thinks about things. They have to think globally, and be the best at what they do not just out of thirty teams, but anywhere in the world.

The NBA has a HUGE head start in that effort. NBA teams are, currently, the best (although who would be shocked if teams like CSKA Moscow steal a game or two against NBA competition this coming preseason). NBA teams have deep pockets, a business model that drives profits to most teams, and a brand that continues to have tremendous value in the minds of nearly everyone.

But what the NBA does not have, anymore, is a free pass to supremacy. And if you’re a fan of good basketball, that’s a good thing.