EU and NBA face similar plight

David Gura Nov 15, 2011

Kai Ryssdal: Let’s take two big stories in the news this week — the European debt crisis and the NBA lockout — and do a little compare and contrast.

On the face of it, not a whole lot in common. Banks versus bank shots, if you will.

But Marketplace’s David Gura explains the European Union and the NBA are kind of playing the same game.

David Gura: We all know some European countries are struggling, like Italy and Greece, and that there are other countries in much-better shape, like Germany.

David Berri: It’s kind of like the NBA, where you have small-market teams and large-market teams.

David Berri is an economist at Southern Utah University — a sports economist. In the NBA, a handful of teams — the Celtics, the Lakers — they do better than teams in smaller markets. They make a lot more money.

Berri says that’s raised a provocative question.

Berri: Why don’t the rich teams start kicking some money into the pot?

In a way, small-market NBA teams and struggling European economies are making the same argument.

Brad Humphreys is also a sports economist. He teaches at the University of Alberta.

Brad Humphreys: It’s important for the overall well-being of everybody in the union, or in the league, that sometimes some of the worse-off members need help from the better-off members.

Humphreys says Europe and the NBA are learning a valuable lesson about growth: They may have over-expanded when times were good, and now they’re paying the price.

But there’s at least one key difference between the EU and the NBA: Germany and the European Union may be able to do without a country like Greece. But the Lakers — like every other high-revenue-earning team — need other teams to play.

In Washington, I’m David Gura for Marketplace.

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