'Buying' into the farm system

Can NBA minor league teams be profitable? Can player salaries be competitive?

Updated: October 2, 2012, 4:29 PM ET
By Larry Coon | ESPN Insider
D-League David Calvert/NBAE/Getty ImagesCreating too many teams too quickly could tax the talent pool and the D-League's long-term value.

Editor's Note: This is the second installment of a five-part series this week examining the possibility and impact of a full NBA minor league system similar to the model used in Major League Baseball. Today we explore what the financial implications of such a system would be.

What started with a smattering of eight teams in the fall of 2001 has expanded to 16 teams and is the NBA's official minor league -- the NBA Developmental League, or D-League. While many NBA teams have embraced the D-League concept, a few remain skeptical -- and this skepticism needs to be overcome if the D-League is to realize its vision of becoming a true farm system for the NBA.

The NBA has been slow to embrace the concept of a farm system as a place where teams can develop their own talent. From 2001 to 2006, the D-League franchises were all independent -- while they shared an affiliate relationship with NBA teams, the big league clubs had little control over the D-League rosters, coaches or basketball operations. Developing talent for an eventual call-up to the NBA was difficult.

In talking to several NBA team executives, a consistent message emerged about the problems that existed, and the changes that are needed for the D-League to take the next step. At the forefront were teams' rights to the players in whose development they were investing.

"If an NBA team likes a player [on another team's D-League affiliate who is not already under contract to the NBA team], they can sign him," said one team executive. "There is no exclusivity, and no right of first refusal."

The structure of the D-League began to change in 2006, when the Los Angeles Lakers pioneered the concept of a team-owned D-League franchise. By owning its minor league affiliate, the Lakers could install their own coaches and trainers, run their own system and better develop their players -- creating an environment much more akin to a minor league baseball team.

"It's a benefit to NBA coaches when someone is called up [from the D-League], and he is already familiar with the system," said the same executive. "For example the San Antonio Spurs obviously have a certain way of doing things. It helps to have players who already know it."

Larry Coon is the author of the NBA Salary Cap FAQ.