(First of two parts)
It is time to consider government regulation of professional sports.
Past time, actually. But since no one, to my knowledge, has even so much as raised the point, let’s see if we can at least get a healthy discussion started on what would be a significant step towards a reclamation by the people of their national pastimes.
First of all, let me explain what I mean by government regulation. I propose that the federal government, acting under the constitutional powers granted by the Commerce Clause, establish regulations regarding the private ownership of all professional sports franchises and that these regulations be enforced by a newly-formed Federal Sports Agency (the FSA, if you will). The FSA would be empowered to control all aspects of the management of a sports franchise, beginning with the prices charged for tickets and the salaries paid to athletes.
Further, I propose that Congress establish clear direction for the FSA with respect to both ticket prices and salaries. For openers, no increase in ticket prices should be approved absent compelling evidence that a franchise is in dire financial straits.
In addition, individual team profits should be capped, and no player salary in excess of one million dollars a year or ten times the average annual income of all Americans, whichever is greater, should be allowed to any athlete.
In the last 40 years, sports in America have become big business, and a relatively small number of individuals, primarily athletes, have become very rich as a result. It is more difficult to know to what extent the owners of sports franchises have benefitted from the explosion in revenues that has occurred since free agency and salary arbitration became the tools of this revolution, but as the resale value of these franchises has steadily increased to almost astronomical levels, we can assume ownership has benefitted, if not in annual earnings reports, then at least in terms of long term investment valuations.
In any event, the losers in this game have been everyone else, beginning with the fans, but extending very perceptibly to the non-fan as well. Consider the following description of what has, in fact, happened:
The owners of all 30 of the major league baseball franchises, unable or unwilling to regulate themselves effectively, have allowed their player payrolls to skyrocket. In the last decade, single team payrolls in excess of $100 million have become unremarkable. The average player salary now easily tops $3 million! These same players, only 40 years ago, averaged no more than $50,000 a year in salary. (That works out to a 60-fold increase, which means these guys are staying ahead of inflation by just a bit.) In response to this economic upheaval, the owners have grumbled a lot (as if some outside entity had forced them into this predicament), while they have found ways to more than increase their revenues to meet these increased expenses.
The first and most obvious method is to hike income from the games themselves, i.e. higher ticket prices. Example: In 1969, the top ticket price for a field level seat at Dodger Stadium was $3.50. Ten years ago that same seat cost $35. This year it was only available in a season ticket package for an average of $150 per game.
These dramatic increases in ticket prices have occurred nationwide. Tickets for the new Yankee Stadium began at $50 (for the cheap seats) this year. Even a small-market team like Kansas City charges an average of $25 a ticket for its games.
But the explosion in ticket prices for the “average” fan is nothing compared to the loot commanded for the new “luxury suites” that are now found in every ballpark and arena. These suites start at $100,000 per year, with many costing corporations ten times that much.
Not our money, you say? Keep reading.
A second method of increasing revenues comes from television, where the major networks are engaged in an ever-escalating bidding war to get the big sports. As an example, the current NFL contracts for TV broadcast rights total over twenty billion dollars a year (ten times greater than it was a decade ago).
In turn the networks, needing to generate added revenues to pay for the “right” to air these games, have hiked the cost of advertising by a commensurate amount. The price for a 30-second ad at last year’s Super Bowl was 2.5 million bucks. Think about that figure for a minute. Now add in the cost of producing the attention-grabbing spots. And just where do you suppose the advertisers are getting the revenue to pay for those ads?
And so, in the end, even the guy or gal who couldn’t care less about the fortunes of the Indiana Pacers or the Los Angeles Angels of Anaheim or the Tennessee Titans or the San Jose Sharks ends up paying for the explosion in salaries that our free market system has wrought. We are all paying in one way or another, folks.
And who are the beneficiaries of our unwitting largesse? The answer, in case you haven’t been paying attention, is a relative handful of very good athletes and an even smaller handful of already wealthy individuals and corporations who own their contracts. Is this any way to run a railroad?
Still not convinced? Then this weekend, as you watch our national pastimes, note how heavily laden they are with commercials and promotional “announcements.” Is any athlete, let alone his fat-cat employer, worth the X million dollars a year you are helping him earn?
Next: How the world of professional sports represents that rare exception in a capitalist economy, to wit: an industry that will continue to flourish in spite of significant wage, price, and profit controls.
Excellent points Ed.
Thank you for explaining it in simple terms.
Growing up in Los Angeles, I attended many sporting events, for sheer fun. I loved the Lakers, yet never lost any sleep over a game, or cried over a loss. Silly me, I just found other things in life were far more important.
Your points are more than valid. The prices of tickets when I was young were reasonable. After reading your article, I would not pay one dollar over the 1970 rates.
Honestly I’ve always wondered how a man hitting a ball with a stick could possibly rate more salary (10 times more) than a teacher who is highly educated, and responsible for the future generations of the U.S.
It seems the most simple concepts in life have become corporations. Mom and Pop shops are now 711’s and men with sticks are now ”entertainers” a.k.a ”movie stars” rather than sports figures. Basically, we’ve glamorized these men with sticks. Right up there with the new singers who cannot sing without digital ”robotic” noise, yet get paid milions.
I would love to see part 2 of this article.
Let me start by saying I know almost nothing about sports and care very little. However, the older I get the more my libertarian streak grows so whenever anybody suggests government involvement to fix a problem I question whether the issue is one we want the government to take a hand in. I don’t doubt that professional sports has lots of big problems and that ordinary folks have to pay a lot for tickets – but I hardly see why that’s a matter the government should get involved in.
Furthermore, I have read (cursorily, since I lack interest in sports) that many of these problems are the result of historic government interventions, in particular, an exemption from the anti-trust legislation covering every other business, that yields many of the current inequities.
So I’d sure want to think twice about asking the government to take time off from fighting 2 wars, fixing the economy and healthcare to focus on remedying the inequities of professional sports in this country… Nu?
Ed, Ed, Ed…. I don’t know what to say. Do you even pay attention to what the government does, or should I say can’t do. I worked for the government (in the military) and I have first hand experience of how Inept and inefficient the government can be.
The only question I have is how can you be so confident in “PEOPLE” that may or may not be smarter than the rocks in your yard. The “PEOPLE” you trust and when I say “PEOPLE” I hope you understand that I mean the “GOVERNMENT” and the statements you are making only serve to control people and “DICTATE” what people should or shouldn’t have. And as Adam has already said the government already set the rules that got us into this situation.
It’s funny to me how people think that government can or should always fix things, especially when people forget the rules that regulate the current situations were put in place by the that same government.
Ed are you jealous of what they make? I am, but I certainly don’t think the government taking their money is going to get me any more money or is it going to make it any better. It’s just going to get turned into something that get’s the government more money.
If your worried about the sports people being so greedy and making so much money, you might want to look into your elected officials and look at all of the lifelong perks they have voted them selves.
Absolutely not. No athlete is worth such obscene amounts of money.
And I don’t mean to dismiss professional sports or pretend that I’m so evolved that I have risen above such modern day bread and circuses.
However, the salaries of professional athletes are ridiculous. Since when did tossing a ball warrant huge sums of money? And more disturbingly, blind allegiance?
Athlete’s salaries (and that whole business, categorically speaking) are a reflection of our true priorities. Stadiums charge $150.00 per ticket because we keep purchasing them. And by “we”, I mean Americans, generally.
Yankee stadium charges exorbitant prices because they can. We let them. Welcome to capitalism, folks.
If everybody took a stand and refused to pay such outrageous prices that would send a powerful message. What’s going to happen? Are the Dodgers going to play to an empty stadium? Or is it more likely that, after a few poorly attended games, the powers-at-be will take a look around and decide to knock off a few bucks in order to fill their seats?
Many people believe they only vote on election day. As consumers, you vote with your dollars every single day.
You have a problem with Wal-Mart’s employment practices? Fine, then don’t shop there. Go to Costco. Better yet, kick in a few extra bucks and support your local small business. If enough people feel the same as you do, then Wal-Mart will either have to change their practices or go out of business.
That’s the beauty of capitalism. You do have other options. If you hate Starbucks because every time you sip on your venti-triple-soy-vanilla-latte you taste the tears of the downtrodden, then go to Peet’s, instead. Or Java city or any of the million other coffee houses.
It’s not that simple you say?
Everybody does that thing where they say it’s futile because everybody else is going to continue to shop at Wal-Mart anyway, so why bother because they’re having a “buy-two, get one free” sale on Diet Coke this week.
“But, Ashley, we don’t have a choice.”
Oh, but you do. The high cost of tuition and crippling law school debt leaves me little cash-poor these days. Yet, I still somehow find a way to manage.
Make the effort. It counts. Take a stand against ticket prices and athlete salaries by not participating in a few games. Don’t buy that ticket. Turn off your TV. Don’t watch “just for the ads”. Put down that Pepsi (or whatever it is that you bought because of effective product placement). Go read a book for a while until this sorts itself out.
Again, this goes to our priorities as a society. “We” value cheap commodities over human beings. Just like “we” place professional athletes over doctors, lawyers, social workers, and teachers. So much so that these athletes get away with all kinds of deplorable conduct. We look the other way and don’t hold them accountable for anything. So they get away with illegal drug use, domestic violence, rape, and even murder. Fans idolize them and defend them every single time. Without question.
So what’s a few million dollars?
We value their contributions over the work of other professionals. And so they get paid accordingly.
We first have to realize our own complicity in this mess. And then promote change. This requires us to experience a paradigm shift regarding our relationship with professional sports. If everyone actually took a stand, I bet that the results would be far better than any anti-trust legislation.
Sorry you asked now, aren’t you? 😉