When Corporations Prosper, Their Employees Thrive

If you want to age yourself, talk about how you used to stay up until 11:30 on Friday nights to watch NBA playoff games. This was in the early 1980s. Friday night prime time was far too valuable to slot the best NBA teams into.

If you want to age yourself even more, bring up legendary Sports Illustrated writer Frank Deford. Actually, at this point it ages you to merely talk about Sports Illustrated (SI), and how the arrival of it in the mail (usually Thursdays) was once a weekly event owing to the immense prestige that came with making the cover.

Back to Deford, in his memoirs he recalled following NBA teams for SI in the 1970s, except that the players usually followed him off of the airplane, and followed him still after the games. Deford flew in first class while the players were in coach, and then Deford had an expense account that made NBA per diems of the 1970s appear very small by comparison. Deford bought better drinks at much better restaurants for the players he was reporting on.

What informed this seemingly strange state of affairs? Hopefully the answer is obvious. But if not, it will be said that magazines like Sports Illustrated were far more prosperous than the NBA teams featured in those magazines in the 1970s and early 1980s. And with magazines prospering, their employees lived and traveled very well. The joke at Time Inc. (then owner of SI) was that reporters on the road had better run up nosebleed expenses else their bosses assume they weren’t working.

Fast forward to the present, and the world of magazines versus the NBA is upside down. This truth is vivified in a lot of ways, but most notably right now in the rise of palace-like practice facilities for NBA teams.

Nowadays it’s not just that the players play in prime time on various networks and cable channels, and it’s not just that they’re paid tens of millions (and frequently more) per year. It’s what they experience when they go to work. About it, there’s an old saying across all professional sports that players are paid to practice, while they play the games for free.

If so, it should be said that arrival at practice (work) is an increasingly luxurious notion in NBA practice facilities with 6,000 square foot atriums, much bigger exercise spaces, hot tubs, saunas, barber shops, abundant food prepared by high-end chefs and curated to each athlete’s specific needs by nutritionists, etc. etc. When they pay players to practice nowadays, they make it plush as possible. What choice do NBA teams and their owners have?

It’s not just that they pay their players enormous salaries, and that the facilities are meant to maximize their return on sizable investments in the players. There’s also the reality that a failure to compete in the practice-facility arms race renders those unwilling to spend sitting ducks relative to the competition. The facilities are a recruiting tool for teams that compete to shower the best basketball players in the world with enormous salaries.

The explanation for the rising treatment of NBA players can be found in the prosperity of the teams. The latter is a statement of the obvious, but the obvious requires stating.

To understand why, consider the propensity of politicians and demagogues to attack any efforts by politicians to reduce the rate of taxation levied on corporations. Supposedly these tax cuts favor the fat-cat owners, but that’s a feature not a bug. And it’s a crucial one.

As the NBA reminds us over and over again, what accrues to the billionaire team owners routinely accrues to the multi-millionaire players. “Trickle-down economics” was always a faulty notion. What’s described as “trickle-down” when the rich get richer is in fact a gusher.

Author

  • John Tamny

    John Tamny is a popular speaker and author in the U.S. and around the world. His speech topics include "Government Barriers to Economic Growth," "Why Washington and Wall Street are Better Off Living Apart," and more.

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