By Vincent
Musco
Tuesday, February 10th, 2004
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de-pre-ci-ate
1 : to lower in estimation or esteem
2 : to lower the price or estimated value of
intransitive senses : to fall in value
Never, ever trust a businessman with a vested interest.
Mark Cuban, owner of the Dallas Mavericks, is a businessman, if nothing else. And recently, Cuban voiced his plight concerning his players' participation in international basketball, including the World Championships and the Olympic Games.
"We pay these guys tens of millions of dollars and then let them work for another for-profit enterprise, the Olympics," said Cuban. "And for events no one cares about, the World Championships. Both of them have officiating that allows brutal play, and all of them have the risk of injury. Why? We're risking the core of our business, our players."
Cuban, a self-made millionaire entrepreneur, invested a more-than-somewhat substantial sum in an NBA franchise with every intention of turning profits. He does not like to see his players showcased and used in another for-profit setting without any compensation or benefit to himself. Who would?
But also at work here is the idea that a player is being "spent up" too quickly. In business, it's called depreciation. A resource depreciates with age and use, until its value approaches zero. The Dallas Mavericks are a business, and Canadian-born Steve Nash and German-born Dirk Nowitzki are both key resources on which the Dallas Mavericks depend. The problem is that each player's international team is depreciating Cuban's resources without compensating him for the lost opportunity cost.
How much can a player possibly depreciate from playing additional competitive basketball over the summer months? Probably not as much as Cuban would like us to believe, but there is risk involved with players who play internationally.
Tracy McGrady has confessed to being fatigued this season, a byproduct of playing for the U.S. Basketball team under Larry Brown in August. Note that McGrady is averaging almost five fewer points per game this season than in 2002-2003, despite averaging more minutes per game. Extra fatigue hurts players by decreasing the quality of product on the basketball court every night, and by increasing the risk of injury to affected players. Lower quality and injuries hurt Cuban's business.
Interestingly enough, Cuban has been the one owner to voice his opinion on this issue, when it is clear that all NBA owners have incentive to feel the same way. The Olympic Games and World Championships add extra risk to their businesses, especially since generally only the top players in the NBA qualify for Olympic play.
Cuban has a reputation for pampering his players, claiming that he loves them like family. Maybe so, but his players are valuable commodities to his business, and keeping them happy is a way of increasing their value and productivity. Cuban would never have met and loved Dirk Nowitzki if Dirk was not seven-feet tall and able to shoot from long-range like a guard.
Such is the life of the owner of an NBA franchise. Owners know that the top players in the NBA could all play internationally in the offseason. That is a risk that owners must account for in considering potential contract offers to free agents. How much less valuable is Steve Nash if he commits to playing for Team Canada in the summer months? The answer is probably negligible, much like Cuban's stale point of view.
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