Rant of the Week

Sports Economics

 

Everybody knows that salaries for professional athletes are completely absurd, but nobody seems have any rational idea of what can be done about it.   The basic argument against doing anything is that if people want to pay $55 to sit in a huge stadium and watch a bunch of spoiled athletes shoot hoops or shag fly balls or run into each other, what's to stop them?  It's a free country.

Ah, but it's not that simple.  There are rules by which all businesses in the U.S. and Canada must operate.  Most of these are good rules, designed to prevent collusion and restraint of competition.   But professional sports do not abide by these rules: they have an exemption, granted by the government.  The solution to the problem of outrageous sports salaries is really very simple.  You remove or modify   the legal exemption.  Bang. Done.

Few people understand what the meaning of this exemption is.  The meaning is that professional sports teams are not subject to the usual rules of competition, even though they are for-profit businesses.  They are allowed to cooperate together to form a single league with a de facto monopoly over players and venues.  In exchange for this exemption, the leagues are supposed to provide a commissioner to ensure that the interests of the sport are served.  In reality, in practice, all the commissioners serve only one interest, that of the team owners.   New franchises are handed out like lollipops because the astronomical entrance fees are divvied up among the established owners.    

What would happen if the exemption were abolished?  It would take a while, but we would begin to see minor leagues flourish again and some of them would grow into genuine competition for the Majors.  Most medium-sized towns would be able to support a professional team because, with a multiplicity of smaller leagues instead of one, exclusive, big league, players salaries would decline to a rational level.  And instead of a very small number of black athletes emerging from the ghettos to make it very, very, very big, we might have a large number of black athletes playing on a large number of professional teams, making a decent living for themselves, and helping bring business to their home communities with medium-sized stadiums, where fans will also actually get a decent view of the game.

We would have to kiss goodbye to the concept of "THE" Major Leagues.   Big deal.  And no more publicly-funded stadiums, one of the most insane ideas of our time (why are we taxpayers subsidizing the outrageous salaries of professional athletes?).  

All Contents Copyright © Bill Van Dyk
 1998 All Rights Reserved