For years the Euro leagues have been nothing but an afterthought to NBA fans. Undrafted rookies or washed up veterans who failed to make the twelve man roster often go to Europe to languish in obscurity as the NBA's version of the CFL.
However, with departures of NBA prospects such as Brandon Jennings and players such as Loren Woods, Juan Carlos Navarro, Tiago Splitter, and Bostjan Nachbar have left the NBA for Europe this season.
The departure of Josh Childress carries more significance. He is the first American player in line to make big money as a key part of a good team who has decided to ditch the NBA for a Euro league record setting contract.
What does this mean for the NBA and basketball? The signings of Brandon Jennings and Josh Childress show the emergence of the Euro league as a competitor of the NBA and NCAA for players. This, in turn, threatens the NBA and NCAA's strength and current structures.
Economically, several factors has enabled the Euro league to sign mid-level players. First, the value of the Euro has increased from $1.10 in 2003 to $1.59 today. The strength of the Euro has allowed the Euro leagues to pay higher salaries. Also with the current economic climate in America along with the help of the Federal Reserve printing dollars like monopoly money, being paid in Euros also hedges against the continuous decline of the US dollar.
In the case of Josh Childress, Olympiakos has agreed to pay all of the taxes on his three year $20 million deal worth $33.3 million dollars in pre-tax income. There are no salary caps or max contracts in the Euro-league, so clubs have no limits to how much they can spend on players.
Mid-level players and restricted free agents benefit most from the Eurolegue as the NBA clubs have no ability to match a restricted free agent's contract from Europe.
The rise of the Euro league hurts the depth of the NBA. Mid-level and role players can opt for Europe for higher contracts and therefore hurt the depth of the NBA. This would further dilute the limited talent pool of NBA level players and make the NBA a lower quality product. Middle/lower level players will get overpaid and NBA franchises would have further difficulties in keeping championship teams together.
However, international basketball is a greater threat to college basketball than the NBA. Brandon Jennings decision to not enroll at the University of Arizona and play professionally in Europe seems to be the start of a trend that can ultimately lead to a decline of college basketball to the relevancy of college baseball.
Over the past decade, the top American basketball players have had no legitimate interest in attending college. They have either gone straight from high school to the NBA, or (with the recent one and done rule) attended school for only one season to fulfill the one year requirement to enter the draft. As a result, the talent and quality of college basketball has significantly declined.
If Europe helps Brandon Jennings' draft stock, many top players will also opt out of college in favor of actually getting paid while working on their games. Neither raising nor lowering the NBA age limit will help keep top players in school. They will either go straight to the pros or find Europe more appealing due to the money and not having to go to class. Unlike the NBA, the top players in the world do not want to attend college, so there are no definite solutions for the NCAA.
Despite recent trends, the NBA still has the edge as the world's best basketball league and with a few reforms; the league can eliminate the Euro league as a threat and improve professional basketball in the process. The NBA can expand into Europe and take the European markets.
Another solution would be to negotiate with the Euro leagues to add requirements of a posting fee to an NBA player's contract (similar to Japanese baseball players coming stateside) that a European club is required to pay if they want to sign a restricted free agent.
Or the NBA can take a route similar to soccer, and have a basketball version of the Champions League tournament where the best professional basketball teams across the globe compete for a single world title.
Overall, the Euro league’s growing success is having an influence on the state of American basketball while showing the globalization of the world's second most popular sport.
(For more info see my article on globalization in basketball http://bleacherreport.com/articles/26257-globalization-and-sports-part-ii-how-the-nba-should-expand-into-europe)
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