Thursday, October 15, 2009

Socialism for the Very Rich: The Case of Professional Sports in the USA

One of the themes swirling around the current health care debates is the notion of a European socialism. In the standard rhetoric, not just restricted to health care, the pervasive and enervating affects of collective provision of goods and services are contrasted with the dynamism and freedom of pure market mechanisms. Well and good, but why is this model not used in the USA where most markets are dominated by cartels and collusion? Only the ideologues believe in the free market. The rich and powerful do not. And to prove my point I only need to look at professional sports in the USA. ‘Collectivist’ Europe has a fierce market system in the dominant game of soccer. Take the English Premier League (EPL) where at the end of every season the poorest performing teams are relegated to lower divisions, thus losing out on valuable televising rights revenues. The successful teams in the lower leagues move up to the more lucrative divisions in a direct relation between performance and pay. The very successful teams in the EPL get to compete in European-wide competitions where there is an even bigger payout. Competition is used to reward the successful and punish the unsuccessful.

Compare this with the closest USA equivalent, the National Football League. Here poor performance is rewarded not punished. If your team has a lousy season, you get the first round draft picks—the most promising players coming from college—and your schedule is adjusted the next season so you face weaker teams. Getting lower draft picks and a tougher schedule against good teams in contrast punishes the successful teams. The emphasis is on creating parity between teams. Where is the free market? Where is the competition? Relegation for the awful? Forget about it. Lousy teams are never relegated. Owners get to keep their teams in the lucrative TV-revenue sharing deals. The emphasis is on continually leveling the “paying field” so that mediocrity is always rewarded and excellence is always penalized. Of course the whole system is geared so that owners can keep raking in the money no matter how incompetent their franchises. Owners and players are kept in clover with no fear of relegation or revenue loss. Real competition? Forget about it. A monopoly system continually reproduces itself so that the poor and the weak get to stay with the rich and the strong that would have Karl Marx applauding. Sounds like socialism to me. And this same system also extends to baseball and basketball, where we have perennially woeful teams such as the Pittsburgh Pirates in baseball and the LA Clippers in basketball. So let’s bring all this criticism of European-style socialism even closer to home of the professional sports cartels. When the NFL looks like the EPL, that is when people can start speaking about a real market in sports. Until then sit back and watch Europe-style socialism at work in the NFL. To accurately reflect the business model used, the acronym needs to be changed to NSL for the National Socialist League.