American basketball is entering a more competitive era

WHICHEVER TEAM wins this year’s National Basketball Association (NBA) finals, which began on June 1st, will make history. For the Denver Nuggets, a small-city outfit formed in 1967, victory would mark their first-ever championship win. The Miami Heat, meanwhile, are the first team in 24 years to make the finals after being seeded last among the eight playoff teams in a conference. No such team has prevailed in the competition’s 76-year history.

This triumph of the unfancied suggests that the NBA is entering a new, more competitive era. Regardless of who wins, the league will mint a different champion for the fifth straight season—a welcome divergence after a long spell in which individual teams such as the Miami Heat or Los Angeles Lakers had years-long streaks. Basketball enthusiasts talk of a newfound “parity” in the league. Two weeks before the playoffs began “26 teams were still mathematically alive,” marvels Mark Tatum, the NBA’s deputy commissioner.

Is 2023 a mere blip, or a sign of an enduring trend? The NBA has long been less competitive than North America’s other big sports. The Lakers and Boston Celtics have between them won nearly half of the championships since the inaugural 1946-47 season. The past decade has been dominated largely by the Golden State Warriors, a team based in San Francisco, and three other teams, all of which at different times featured one player: LeBron James. By contrast, the two most successful teams in the National Football League (NFL) have won just 12 of the 56 Super Bowls. Before the basketball season starts, betting markets typically assign the favourites a 24% chance of winning. In professional baseball, ice hockey and American football that figure is around 10%.

One reason for this is structural. Compared to most other team sports, basketball has relatively few players in play at any given time. That allows superstars like Mr James to wield more influence, and the teams they play for to dominate. And, unlike in American football, the NBA playoffs are a best-of-seven series, which reduces the likelihood of upsets and works in favour of consistently strong teams. Money matters, too. Historically the penalty for breaking the league’s salary cap, now $124m per team, has been light. Big teams like the Lakers and Celtics have been happy to pay the penalty for exceeding it to snag top talent. That has left other teams little chance of challenging for the championship.

But things are starting to change. Basketball bigwigs “want to make the NBA as much like European soccer and the [NFL] as they can”, says Brian Windhorst, an analyst at ESPN, a sports network. In 2011 the NBA strengthened the financial penalties on overspending teams that it had introduced a decade earlier. The latest deal between team-owners and the players’ union, signed in April, makes it even harder for rich teams to break the salary cap, bringing the NBA’s practice closer to the strict restrictions applied in the NFL. “The new deal is basically trying to prevent superteams”, notes Mr Windhorst. And in 2020 the NBA added a tournament for the final two playoff spots among the teams ranked between seventh and tenth in each conference. That gives more teams an incentive to compete until the end of the season.

Other factors are making the NBA more competitive, too. The league has become far more cosmopolitan: there are now more than 100 foreign players in the NBA, 20 times as many as in 1949. This broadening of the superstars’ pool makes it harder for the top teams, now bound by the tougher salary cap, to monopolise them. In each of the past five seasons one of a trio of non-Americans—Nikola Jokic of Serbia, Giannis Antetokounmpo of Greece and Nigeria, and Joel Embiid of Cameroon (pictured)—has been voted the competition’s most valuable player, observes Gautam Kapur, a former manager at the NBA. All three play for teams that have historically not enjoyed great success.

The Economist crunched some NBA data to check whether new rules and more international talent really are making the league more competitive. We found that in recent years success has indeed been distributed more broadly among teams than previously. In 2023 and 2021 the variance in the number of games won by each team was at its lowest since 1998. And in the five years to 2023, 29 of the NBA’s 30 teams made the playoffs at least once (only the Charlotte Hornets failed). That is the first time that has happened since the five years to 2008, which was an unusually competitive period. This could be an aberration. But it suggests that something is afoot.

A more competitive league comes with drawbacks. The NBA’s revenues, which amounted to $10bn last year, are concentrated among big-city teams. In 2017, for instance, only half the teams made a profit. Mr Windhorst notes that successful seasons from big-city teams like the Lakers and Celtics have been responsible for some of the NBA’s most lucrative years. Yet smaller teams must have a shot at winning if they are to develop large fan bases of their own. The success of the Denver Nuggets, in particular, this year suggests that this is starting to happen. ■