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Friday, April 8, 2016

Socialism in Professional Sports

Here's something kinda interesting to think about..

Most people hate Socialism and all its connotations and pretty much everyone loves sports..

And yet professional sports is rampant with Socialism and could not survive without

How can we say that considering all the professional sports leagues are multi-billion dollar enterprises where most of the employees (coaches, players..) are millionaires?

Well, lets delve a little..
Before we get into the economics, lets look at how the leagues are structured..

Every sports league at the end of every season has a draft and how is it decided who picks first vs fifth or fifteenth?

The worse you are, the higher the draft selection... Being successful and the best team in the league i.e. winning a Championship is rewarded by going to the back of the line and picking dead Last

Remember what Socialism is..  No one has too much of an advantage and if some are more successful than others, you put laws into place to level the playing field
So what would happen if you had the best team pick the best draft players every year and then keep winning?

Ultimately fans lose interest and stop watching/following

Dynasties were once accepted the past (think the NY Yankees or Boston Celtics) but now if one team won 8-9 Championships in a row, it would absolutely destroy the sports league economically.

Another tool of 'fairness' leagues implement is the salary cap which is meant to prevent or punish teams willing to spend to put the best product on the field (or ice or court) from doing so or get hit with cap penalties and fines
Often teams will tell their fans they couldn't acquire a star player or make their team better in free agency because of that darn salary cap..  

Well who created it?  It wasn't God and it wasn't the Congress?   And no one's going to jail if an owner overspends..

Its just a mechanism for owners who are more interested in profit than winning to retain a leash over those who care more about winning..
The next way the Socialism is used in professional sports is through revenue sharing where all teams in a league get an equal cut of the financial pie no matter how good or bad they are or how much or little ownership tries to win..

Let's use the NBA as an example here..  They share all revenue that does not go to the player's association which includes national TV rights, merchandising, advertising and the like..

The owner of the Golden State Warriors who have won 70 games and the owner of the Philadelphia 76ers who have won an embarrassing 10 games will each get Equal share even though Golden State is on national TV constantly and are top merchandise sellers while the Sixers are only on local TV and no one wants a Sixers jersey for free...

And of course the other owners get their equal slice of the pie.
In baseball during free agency, if a team signs a player that the former team deems indispensable,  that team will get a complimentary draft selection as a 'reward' for not being willing to pay what is necessary to resign while the team that is willing, loses a draft pick.

This is Socialism..

The best team or teams are continually punished while those at the bottom of the pile who don't make sincere effort get rewarded..

This is why the Kansas City Royals and Pittsburgh Pirates were absolutely Terrible for the entire 1990s and 2000's while consistently making a profit for ownership..   There never was an incentive to do otherwise
By luck they drafted enough talent in a short period that they could ride a brief wave of success

This year, the MLB with the highest payroll is the LA Dodgers with a payroll of $253.6 million..  The lowest is Milwaukee Brewers at $62.9 mil

That is a top to bottom differential of $190.7 million dollars

And when the season is over and the Brewers lose 100 games when the league revenue is all evenly doled out, we guarantee Milwaukee will make a profit.

Even how the money is distributed during games is determined based on Socialism
Let us say the NFL's Washington Redskins face the New York Giants twice a season with each team home once and for whatever reason, the Giants sell out their stadium with 65,000 in attendance while in DC, only 35,000 show up..

You'd think this would put the Redskins in a serious financial bind because they collect the revenue from their home game and Giants keep theirs..


Usually everything is split 60/40 where the home team gets the 60%.   So that means the Redskins collect 40% of the sold out draw in NY and 60/40 the other way for the game in Washington only half as many attended..

So the team that draws huge crowds does not get to benefit over the team that sells out 50% of their seats..  The better team 'gives' to the worse..
And like we said, if sports were run like true Capitalist enterprises, it would be like NCAA football where only a select handful of teams are genuinely Championship caliber and everyone else destined for Bowl games in mid-December.

So would the country be better off if run more like professional sports?

Honestly we think not, but sports is the example by which without Socialist rules in place, it would not be as popular and profitable collectively as it is