from Amazon
Monday, March 08, 2010
Execs talking at MIT
Pretty good recap:
Burke says hockey has a hard cap, and it’s a good system. Morey says how can it be fair that the Cavaliers have LeBron James, who might be worth four or five times what the Cavaliers pay him. “How is that fair?” he asks.
He’s right, it’s not fair. Just before the Penguins were about to be sold, they won the Sidney Crosby draft lottery. The team was pulled off the market. When part of the team was sold, the valuation of the team had gone up about 30MM, or the amount of value Crosby was going to supply over-and-above what they were going to pay him. So, capping has the effect that the value is there, and has to go somewhere, and if it doesn’t go to the player, it goes to the middle-man (the team).
That’s why it’s not fair.