No One Got Paid What They Were Worth! Exploring Player Value in the Early History of Professional Basketball

Abstract

Prior to the ABA coming into existence in 1967, the NBA enjoyed a monopsony in the market for professional basketball talent in the United States. One would predict that a monopsony would be able to exploit the talent employed. The arrival of the ABA, though, theoretically should have dramatically reduced the ability of the NBA to exploit its players. The question this study seeks to answer is how long the monopsonistic power of the NBA survived after the arrival of a rival league. Beyond this question, this study will also examine the link between pay and performance in the ABA. In the end, this study will show that for a few years, basically no one in the NBA or ABA was paid what they were worth.