(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.