NBA ESPN

NBA ESPN

It’s no secret that cable television is in trouble and things aren’t improving; millions of subscribers are bailing on the traditional, bundled cable television model in favor of streaming services. There’s little doubt as to why this is happening; bundled cable providers like Comcast and TimeWarner are behemoth corporations with infamously bad customer service. Their rates are continuing to rise at an exponential rate despite overall viewership and viewer satisfaction plummeting. Cable TV’s prices have grown at four times the rate of inflation, with cable subscribers getting an average of 189 channels but only watching 17 of them. Yikes.

The 17 channels-per-household number has been the same since at least 2008, when the average number of total channels was about 129. Which means exactly what it sounds like: over the past 8-10 years, Cable TV has added a whole lot of channels that most people don’t watch. So cable companies keep ratcheting up their prices at a pace that exceeds gasoline and gold (literally), their customers are getting basically the same product. If this sounds like business suicide, it is – but there’s a caveat to this, and it’s the lynch pin that makes the whole model work. Sports programming.

Most cable subscribers don’t know this, but each cable channel has a different wholesale cost – HGTV, CNN, ESPN, Al Jazeera – all charge a base per-month-per-subscriber rate. The argument that has raged for years is that consumers want to be able to buy their cable channels a-la-carte, but that option isn’t available, and it might not even work out to be cheaper in many cases. The power of cable television to networks is twofold: the monthly subscriber fees combined with the advertising revenue from the broadcasts themselves. This model has suffered as many broadcast networks have seen their advertising dollars sink as more people opt for on-demand programming or just stream other content in general, allowing them to avoid advertising, but that isn’t true for live sports.

Live sports still maintains high demand and viewer engagement; unlike a cop drama that isn’t unfolding in real time with real-life consequences, live sports has built-in viewer engagement, especially for close contests with consequences. Channel surfing during commercials is a way of life for us now, but most people aren’t going to change the channel during a commercial when their team needs a first down to stay in the playoff hunt and there’s 1 second left on the game clock. Major league sports, such as the NFL and NBA, have long ago left the days of only having some of their games broadcast. Now every single game is available to watch, somewhere. The structure of the games is actually modified based on the television broadcast, and it goes beyond media timeouts. For example, NFL games have a broadcast crew member who steps on the field during a commercial so that the referees are aware that the network feed isn’t back on the air yet. While you are at home watching a Buffalo Wild Wings or Budweiser ad pitch, the referee at the stadium is watching the broadcast rep to see when he can signal for play to get back underway. There’s nothing wrong with any of this, but it points to where the largest source of revenue for major sports comes from. Sports leagues claim that they get more revenue from ticket sales than broadcast revenue, but their actions speak otherwise. Losing teams who have trouble even getting a half-capacity crowd to their games are likely to be leaning the most heavily on the network deals, despite what they may say. TV broadcast deals are pretty much an arbitrage brokerage agreement. A broadcast network figures out how much it can sell advertising for during games, and pays the league less than that amount for the rights. The problem is, there are only so many viewers for games, and only so much decent content. Showing college football games at 10 am on a Tuesday really isn’t a viable option for several reasons, so ESPN fills this time with ‘SportsCenter’ type content.

This would all be fine, except in order to secure the broadcast rights for the most sought-after games, ESPN and other networks have had to pay higher and higher figures in an explosion of broadcast deals. A point of fact that is lost on many casual sports fans is that many lesser games aren’t profitable to broadcast (at least not with the current cable TV model and overhead), and benefits the teams more than the network. For example, broadcasting a Division III basketball game will give the competing programs some great exposure, but there’s a good chance the viewership will not be nearly high enough to justify the broadcast for a major network. So the competition for ‘high demand’ events is fierce and smaller cable networks cannot compete in any meaningful way.

This high-impact viewer engagement, combined with the steady rise of viewership for top sporting events, has created a golden goose for both sports broadcasters and cable television providers, but they don’t share the same benefits and they are not in complete collusion about profiting from it.

Cable providers love the fact that viewers can’t really get live sports – at least not the live sports they want – consistently from anywhere except cable TV. This includes online streaming, because viewers who can legally and easily stream games like the NBA playoffs are able to do so through ESPN, not a third party, and those viewers are already paying for that service. This means that viewers who want sports will buy the whole cable package…which is convenient for cable companies, because sports viewers may not have wanted to buy anything but sports and they have to pay for the rest of the channels as well. However, the real kicker is the viewers who don’t watch sports. They are subsidizing the sports fans because they get hit with the same package deal. Neither group of viewers wins…but the cable company sure does. I suppose it could be argued that viewers are getting a lower price overall with bundling, but it is a specious argument: those viewers would probably be willing to pay more per channel, for less channels, if their overall bill was much lower. The closest solution cable companies have offered for this is not a solution at all- adding another ‘package’ to your existing package for more localized sports, such as the Pac-10 or Big East. This has actually made it more difficult for new sports networks to get footing, even when backed by major players like NBC. Universal Sports Network was shuttered earlier this year after it struggled to climb off of the lower-tier sports cable packages. The fees for sports channels dwarfs the non-sports channels, but we’ll get into that in just a few minutes. For viewers who don’t want sports at all, there are no viable options other that just accepting fewer overall channels and dropping cable for Hulu, NetFlix and HBO Go (which they are doing, in droves).

The successful sports broadcasters – like ESPN – are the ones who benefit the most from bundling; millions of cable TV subscribers, combined with content that locks in many of those subscribers creates a scenario where the cable sports networks can ramp up their monthly per-subscriber fees. And, to no surprise, they have. The demand for the last bastion of engaged ad viewers has created a bidding war between ESPN, TNT and the other sports networks. In order to pay for those big deals, ESPN and the other networks have demanded bigger subscriber fees from the cable networks. Those fees get passed right down to the viewers. Let’s put this in perspective to explain how wide the gap is between sports programming and other cable programming fees.

In recent reports, ESPN charges between $6.04 and $6.50 per subscriber to cable companies; by comparison, HGTV only costs a mere $.17 cents per month. While it may seem we’re talking dollars and pennies here, it must be pointed out that those $6+ fees are not just coming from sports fans, but every single subscriber. Without the cable bundling packages, ESPN would have to charge significantly more per month to cover their broadcast deals and operating costs. Financial analyst Leo Hindery recently stated that sports programming packages could continue to balloon to the $40 per month range. Another key Wall Street analyst estimates that ESPN would have to charge $36 alone just to pay for the current costs. That’s not even remotely viable in a world where NetFlix costs $10 a month and NBA League Pass is about $200 per year.

It isn’t mere speculation about the potential of subscribers defecting en masse from cable companies, hitting ESPN right in their revenue projections. It was recently reported that 7 million subscribers have dropped in the past two years. At $6 per subscriber, that’s $420 million gone annually from the company that makes up 25% of Disney’s overall business. When this came to light, Disney’s stock took a major hit.

From a company that built its fortune in splash hires and press buzz, they immediately made some sweeping changes that would be deemed as “PR Kryptonite”, including wide scale layoffs and jettisoning some of their highly paid on-air talent. Despite all of the normal press release bingo that comes along with these changes, the real story is that ESPN is cutting expenses – hard. This, while at the same time claiming all is well in the world, and growth is going to continue unabated. Disney CEO Bob Iger stated that the company is “very bullish about ESPN” despite all of the behind-the-scenes scrambling to slash costs. It is likely that Disney and ESPN will show improved profitability in the 3rd or 4th quarters because of this, and this is entirely intended to bolster the stock price and soothe investor concerns. However, cutting costs in the short term is not the long term solution. The reality is that the deals for sports programming may be outpacing the market in a way that will create havoc in a few years; the massive deals that seem to have no ceiling may very well be finding their peak.

What would this mean for sports fans? Well, probably more options, but it would mean paying more attention to which networks or streaming services are carrying the games you want. There’s also the reality that the entire major league sports industry – from franchise fees to collective bargaining agreements – was built on the idea that sports would continue to see ever-increasing broadcast deals. If those deals suddenly are replaced by much smaller fiscal agreements, you’ll see much lower salaries for the players, lower ticket fees, and more broadcast partners all around. I don’t want to speculate too much, but such an event may well open the door for more than one pro league in the various major sports. However, that’s a topic for another day.

For now, it’s important to understand that cable sports – and the sports entertainment industry as it exists today – may be due for a radical shake up in the near future. ESPN continues to ink bigger and bigger deals, the most recent for $1.4 billion being about 3 times the size of their previous deal. So considering the fact that they lost a half-billion in annual revenue while at the same time adding another full billion in expenses means they might need for Disney to have more than pretend fairy-dust to make it all work. All of this explains why you’ve suddenly seen ESPN and other networks so eager to jump into ad deals with DraftKings and FanDuel, which are technically gambling and they wanted no part of prior to this year.

So that’s a truncated explanation with quite a bit left out for later. Coming this week, I’ll have more information on something else – a minor sports league that actually has a viable business model. I know, you guys are familiar with me ripping apart the financials of leagues like the Amerileague or the ABA, so you’ll want to drop in for this one.

Marcus Shockley is the creator, along with a band of talented (but possibly misguided) misfits, of BasketballElite.com, the Southeast Summer Showcase, NetCast Sports Network and has scouted and written about basketball for longer than any person should openly admit. You can follow his rantings on sports, life and acceptable flavors of ice cream on Twitter @m_shockley

Adam Silver

The NBA has talked about potential expansion into countries other than the United States for some time; as it stands now, that expansion only has included a single team in Canada, following the move of the Grizzlies from British Columbia to Memphis. However, NBA Commissioner Adam Silver recently told the Times of India that the league is actively looking at options outside of the U.S., including India:

“It’s premature to say that we’ll have a league on the lines of NBA… but it’s something we’re looking closely at. I have no doubt that over time, there will be a successful basketball league in India”

Silver commented on several items related to the NBA and even specifically the NBA Finals, but when asked again about expansion in India, he reiterated the league’s goals:

“It is critically important. I travelled to Mumbai in December with Vivek Ranadive, one of our owners who was born in Mumbai. We see it as an incredible exciting market.”

It is interesting that the NBA is looking specifically at India, but may make sense. Competition in England with the British Basketball League as well as Korean, Italian, Chinese and other established leagues could be more difficult. It will be an interesting story to watch. Travel would be an issue of course, so it’s not clear if Silver and the NBA are looking at putting an NBA team in India, or just looking at exhibition games.

UConn Women's Basketball NCAA Champions 2014

In a promotion connected to the NCAA Women’s national title game, Moe’s Southwest Grill ended up selling 20,000 $1 burritos to fans of the UConn Huskies after the women’s team won their ninth NCAA national title:

In a “If UConn wins, you win,” promotion, the 17 Moe’s Southwest Grill restaurants in the state lowered the price of burritos as the men’s and women’s teams advanced in the NCAA tournaments.

It is estimated that due to the promotion, Moe’s gave up about $500,000 of sales, but considering they had 20,000 burritos going out the door, there’s a good chance they’ll make that money back pretty quickly if they were able to bring in some new fans.

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Adam Silver NBA basketball

One thing is for certain; the debate over whether college athletes at high-revenue college programs should be paid is not going away. This, despite the NCAA’s best efforts to frame the conversation with rhetoric about ‘student-athletes’, a term they coined decades ago to justify not paying the players in their employ.

Now the NBA has decides to wade into the fray a bit more, with newly minted commissioner Adam Silver mulling over what they might be able to do for those athletes:

“Rather than focusing on a salary and thinking of them as employees, I would go to their basic necessities,” Silver said. “I think if [Connecticut Huskies guard] Shabazz Napier is saying he is going hungry, my God, it seems hard to believe, but there should be ample food for the players.”

To be clear, the NBA isn’t talking about outright payment of salaries to players but rather a subsidization of any gaps in college attendance. On one hand, it’s good the NBA is paying attention…while on the other, it’s hard to see these comments and wonder why the NBA owners were claiming massive losses during the recent labor agreements if they can offer possible subsidies for thousands of college players. The truth has to lie somewhere in the middle; either the NBA is talking about a limited program, or it’s just more rhetoric designed to give lip service to the issue.

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Chris Paul Clippers

You would think that Chris Paul would be beloved in Los Angeles. After all, he’s helped make the Clippers, considered to be the worst-run organization in all of professional sports over the last 30 years, actually relevant. But, that’s not the case:

“I thought the city would have embraced him,” Clippers forward Blake Griffin said of Paul. “I mean, it seems like everywhere we go, people love Chris. I don’t know why he would get booed at a Dodger game.”

Paul said he understood being the victim of the Untrue Blue. Fans booed him at the Dodgers’ game against the San Francisco Giants on Friday, he said, because L.A. remains a Lakers town. Sadly, even being shown on the Dodger Stadium video board alongside Dodgers outfielder Carl Crawford couldn’t protect him from the scorn of a sellout crowd.

So what gives?

In Los Angeles, the Clippers are the “other team”. The team that isn’t the Lakers, a team that “borrows” the court of the Lakers when they need to play a home game. It’s been this way since the Clippers franchise moved into L.A. from San Diego in 1984. The Clippers have horrible ownership and have been the laughingstock of the league, well, since even their days in San Diego.

Team owner Donald Sterling lobbied the NBA to allow him to move the Clippers to Los Angeles because of poor attendance…but the reason so few people were coming out to watch the games was that the team was awful for years. Bringing the team to L.A. did nothing to solve the poor management of Sterling and the Lakers were already well established. Remember, this was during the height of Magic Johnson’s ‘Showtime’ Laker teams. Sterling had purchased the team in 1981, and was based in L.A.

So the city of L.A. considered Chris Paul an outsider. They expected him to play for the Clippers for a season after David Stern’s ludicrous move to prevent him from going from New Orleans to the Lakers, then they expected him to move over to the ‘real’ L.A. team. Since he hasn’t, they haven’t embraced him.

Chris Paul is arguably one of the most marketable players in the NBA at the moment, with national endorsements, elite play and a winning personality. But as long as he stays with the Clippers, he will probably continue to be considered the ‘away team’ on the team’s home court.

Kyrie Irving NBA Cleveland Cavaliers

SiriusXM and the National Basketball Association announced yesterday that they will launch an exclusive NBA channel on Monday, December 9, that will cover the league 24 hours a day, 365 days a year, and bring fans closer to the game.

SiriusXM NBA Radio on Channel 217 will debut on Monday at 7:00 am ET and will feature a star-studded lineup of exclusive interviews throughout the day including NBA Commissioner David Stern, NBA Deputy Commissioner Adam Silver, Dallas Mavericks owner Mark Cuban, Los Angeles Lakers head coach Mike D’Antoni, Cleveland Cavaliers guard Kyrie Irving, New Orleans Pelicans forward Anthony Davis, Indiana Pacers center Roy Hibbert, Detroit Pistons center-forward Greg Monroe, Boston Celtics head coach Brad Stevens, center-forward Kelly Olynyk and forward Brandon Bass, and Hall of Famers Chris Mullin and Bernard King. Other big guests for the opening week will include Celtics owner Steve Pagliuca, Golden State Warriors owner Joe Lacob, and Hall of Famer Clyde Drexler, as well as Portland Trail Blazers guard Damian Lillard and Toronto Raptors guard DeMar DeRozan. Atlanta Hawks guard Jeff Teague will also be interviewed on the channel on Dec. 12.

Along with one-on-one interviews with the biggest names in the game, the new NBA Channel will showcase more than 14 live NBA games each week and a daily schedule of NBA-focused news and talk from an unparalleled roster of hosts.

Featured hosts include former star players and coaches such as NBA Champions and TNT analysts Kenny Smith and Steve Kerr; three-time NBA Champion center Stacey King; former NBA Champion guard and head coach Lionel Hollins; former head coaches Mike Dunleavy, Sr., and Sam Mitchell; Hall of Famer and women’s basketball pioneer Nancy Lieberman; and former NBA guard Mateen Cleaves. In addition, Ian Eagle, Frank Isola, Mark Boyle, Joel Meyers and Jason Goff will provide their expertise on a regular basis.
NBA fans can call in to discuss the latest headlines and weigh in with their opinions on the issues of the day. The channel will also feature regular interviews with NBA legends; on-location broadcasts from special events like the NBA All-Star Game, The Finals, NBA Draft, team training camps; programming and specials focused on the history of the game; and more.

“The NBA has always been an important element of our sports lineup and we’re thrilled to be enhancing our coverage with the launch of SiriusXM NBA Radio,” said Scott Greenstein, SiriusXM’s President and Chief Content Officer. “Since 2003, we’ve given our listeners the ability to follow their favorite team’s games from anywhere across the U.S. in their car, at home or on their mobile device. Now they’ll have a radio channel that will deliver a 360-degree view of the league from the people who know the game best. Starting December 9, SiriusXM NBA Radio will be must-listen radio for NBA fans.”

Listeners tuning in for the first day of programming will hear The Starting Lineup, hosted by Stacey King and NY Daily News writer Frank Isola, starting at 7:00 am ET. At 12:00 pm ET, Sam Mitchell and Jason Goff will host Off the Dribble. Steve Kerr and Ian Eagle will host Long Range at 3:00 pm ET. The channel will air live coverage of the Los Angeles Clippers vs. the Philadelphia 76ers that night starting at 7:00 pm ET, followed by the Dallas Mavericks vs. the Sacramento Kings. The following night, the channel will carry live play-by-play of the Miami Heat vs. the Indiana Pacers at 7:00 pm ET. For more information on the channel and programming please visit www.siriusxm.com/nba.

SiriusXM and the NBA recently agreed to a multiyear renewal of their broadcasting agreement. SiriusXM subscribers will continue to receive a comprehensive schedule of live play-by-play that includes every regular-season game from every team, all games from the NBA Playoffs and The Finals, and select Spanish-language game broadcasts.

NBA programming is available to subscribers with XM Select, Sirius Premier or Sirius All-Access plans. Those satellite radio subscribers who add SiriusXM Internet Radio access to their subscription can also listen to NBA games on the SiriusXM Internet Radio App and online. Schedules with SiriusXM channel assignments can be found at www.siriusxm.com/nba.

Mike Miller Heat Amnesty

The Miami Heat have decided that the will use the Amnesty clause on sharp shooter Mike Miller, which may save the team more than $30 million. The savings will likely come from luxury tax payment savings. The move is not entirely unexpected, although it was only a few days after team president Pat Riley stated that the team was looking to keep the core group of players intact.

However, the Heat reportedly tried to trade Miller, not because of his play but because of the mounting cost the team incurred when adding their “Big 3” of Bosh, Wade and Lebron James. Miller was aware that such a move might be made and is taking it in stride:

‘I understand the business side of basketball,” Miller told The Associated Press. ”It’s a combination of being very, very thankful for the opportunity that I’ve had, but it hurts that we had a chance to do something very, very special and I’d love to have been a part of it.”

It’s not entirely bad for Miller, he had battled back from injuries last season to make a positive impact in this year’s title run with the team, and despite being off the roster he will still receive his salary of $6.2 million and $6.6 million for the next two seasons. However, the Heat won’t have to count Miller’s salary towards the cap.

By Marcus Shockley

The president of the National Basketball Association players’ association, Derek Fisher, speaks to reporters after taking part in contract negotiations between the NBA and the players association in New York June 30, 2011. The NBA was on the verge of its first work stoppage in 13 years after negotiations over a new labor deal collapsed hours before the current collective bargaining agreement expires, the union representing players said on Thursday. REUTERS/Lucas Jackson (UNITED STATES – Tags: SPORT EMPLOYMENT BUSINESS BASKETBALL)

        
        

So much of a young basketball player’s life revolves around getting better on the court.

The best players work hard, day after day, away from crowds or an opponent, working on their shot, their ballhandling, their strength or their understanding of the game.

That is excellent. The players with the higher work ethic and the most drive are the players who have the best shot and achieving their dreams, either to play in college or someday play as a professional.

But, being good at basketball alone, and the work toward that goal with the exclusion of everything else, will not prepare a player for life. Players have plenty of people who want to help them be great basketball players but very few to help develop all of the skills needed to deal with the remaining 99% of their lives.

With that said, I wanted to offer some advice to young basketball players, and athletes in general, about what skills are absolutely critical to be successful in your life. Mastering these will not guarantee success, but it will help greatly.

1. Learn how money (really) works.

Time for some brutal facts. Almost nobody, in any walk of life, is good with their money. Most people are wage earners, and if they lose their job, they are in trouble. That goes for almost all rappers, basketball players and movie stars too. Most professional basketball players are broke within 4 years of leaving the NBA. That’s pathetic, but it’s no different than most people.

Don’t be “most people”.

Understand that when you think an NBA player is rich, he’s getting paid by someone who is 100 times richer. The player’s career will end, but that owner will still be there…rich. Understand where the money comes from in sports. It’s not just a big pool of cash sitting in a locker, it’s generated from underlying business principles. Learn what they are.

Understand how to live within your means. Read books like “The Millionaire Next Door” and actually take it to heart. You want to be rich forever, not just for 3 years. Look at Magic Johnson as a businessman, not any players who are still collecting an NBA paycheck. Get good at math. It’s not hard to understand profit and loss. People who don’t understand math are broke in a hurry. People who don’t understand math go out and buy Bentleys and jets while still collecting a sports paycheck.

Don’t be broke. Get good at math. Be as good at math as you are at dribbling or shooting.

Understand the Dow Jones and the stock market. Understand why someone with a lot of money might NEVER invest in the stock market, and you’ll understand whether or not you should put your money there.

Understand interest rates. Understand ROI. Read. Don’t just listen to your business advisers. Definitely don’t listen to your buddies or family members who are always broke. If you do, you’ll end up broke.

2. Learn how to communicate

Learn how to speak correctly. It’s okay to use slang around friends, but when the lights come on, it’s time to be “on”. There’s a reason why Kobe Bryant, Lebron James, Carmelo Anthony, Ray Allen and Kevin Durant sound intelligent in interviews, and it’s not just because they are naturally smart. They have worked on their ability to speak in front of reporters, in front of a crowd, to fans, to the media. You’ve spent so much time watching Durant shoot those perfect outside shots, studied his release, his form, and read all about his practice methods. Have you studied how he talks? You should.

Communication is a skill that can carry over to every part of your life, and it’s another skill that most people, not just athletes, lack. Learn to communicate with people in all walks of life. Don’t mumble and look at the floor when you talk. Don’t act annoyed. You want to be big time? Learn how to act big time.

People who communicate well will always be more successful than those who don’t. Sports television doesn’t hire people who sound like idiots, even if what they say may be disagreeable. Coaches who become more famous have to be great communicators in addition to being able to coach. Roy Williams, Mike Krzyzewski, John Calipari are all extremely good at communicating. Ditto for Phil Jackson, Doc Rivers and Stan Van Gundy.

Learning how to communicate will improve your ‘B.S.’ detector as well. Understanding how people try to manipulate their message will allow you to pick up on it even stronger.

Expand your vocabulary. Don’t be afraid to be smart.

3. Learn how to network.

Some people are born as natural networkers. They know just how to meet people, to work a room, to meet everyone. But for most of us, it has to be learned. For a teenager, it’s even more daunting.

But one of the great secrets of life is that getting ahead in just about anything requires at least some portion of ‘who you know’. There are many players who have gotten looks from pro teams, either in the NBA or overseas, because they knew someone. That won’t get you a roster spot, but it will get you a shot. Knowing as many people will create opportunities, will provide help, resources and support when you need it. Don’t just meet people for what they can do for you, just learn to meet people. If they need help or advice and you can offer it, do so. Over time you will find that having connections will pay off in ways you cannot imagine. A player who you played with in high school may end up as a GM for a pro team overseas. A fellow classmate in college may end up running a business that is looking for endorsement deals. A coach you worked with at a summer camp might recommend you to a scouting service.

Business runs on networking. Learn how to be “in the loop”.

And if you never play in the NBA? All of this matters even more.

By Marcus Shockley
Lebronanomics

Yesterday, my latest issue of FastCompany magazine arrived in the mail, complete with Lebron James on the cover. It struck me that Lebron is one of the few athletes that not only appears on sports magazines but regularly appears on non-sports related publications as well, something that rarely happens to even elite athletes. While I could delve into how Lebron makes money for the publishers by making their covers more appealing, I think the net result of Lebron’s ubiquitous image and it’s misleading ramifications is a far more important piece of business.

While it would be interesting to delve into the exact reason that Lebron James, despite being now reviled by many basketball fans and not yet having actually won a title, is still worth a fortune because of the revenue he generates, that isn’t what strikes me the most.

We have had, for some time, a ‘lottery’ mentality in American culture, and the images of Lebron James proliferating across business magazines such as Black Enterprise and Fortune only serves to extend that idea. This idea that has permeated our culture for several decades is that if we can just get that “big break”…i.e., get drafted into the NBA, or get signed by a record label, we’ll be suddenly rich forever.

But it doesn’t work that way.

The reality is that real wealth is built over time, and that for every Michael Jordan, there are thousands…literally, thousands…of players who got massive paychecks playing basketball and now have almost nothing. They hit the lottery, and now they’re broke. The same goes for musicians. Some, like former Virginia Cavalier and NBA player Cory Alexander, didn’t blow their money and tried to invest with established banks, only to wind up with nothing.

Business is hard. Don’t be fooled. Very few people can do it, and even CEOs of established companies have learned the hard way that striking out on your own can be brutal when you don’t have a company paycheck to act as a cushion. NBA players are employees just like most Americans; there are employees of large corporations that make far more than any NBA player, so salary is not a determinant of business acumen.

This is why the image of James being used on business magazines can be troubling. Until James retires, and has several years of not drawing an NBA paycheck, he hasn’t been running a business or been a captain of industry.

He’s just another guy, collecting a paycheck.

There are a couple of former players who have proven that they were able to take their ‘lottery’ winnings, meaning their NBA paycheck seed money, and turn it into real, long lasting wealth. Michael Jordan and Magic Johnson have grown their money for years and don’t appear to be in any financial trouble. Those two are far more accurate representations of business, and they should be lauded for what they did after they stopped playing professional basketball on those money magazines. In fact, Magic Johnson not only built wealth, but his career was cut short, and he still managed to end up a rich businessman.

American media is rife with the wrong examples of success. Putting Lebron James on the cover of Vogue is fine, and putting Lebron, or Carmelo Anthony or any other NBA player on the cover of a business magazine like Fast Company or Forbes is incredibly misleading. It sends the message that these players are successful, when in reality, the track record of players after they stop getting a paycheck is abysmal.

This isn’t to say James, or any other current NBA player, won’t be successful after they leave the NBA behind. But using these players as the current examples of success is teaching Americans, young and old, the wrong way to get rich.

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