:: 1.23.2004 ::
Speaking of football...
I had an interesting thought about the economics of professional sports a few nights ago.
I know I'm not the only who finds it boring that the Yankees, the richest team in MLB, consistently end up in the World Series final game. Unlike the NFL, pro baseball has no salary cap, so whichever team has the most money gets the best players, period. And the better a team plays, the more money it makes from ticket and merchandise sales. You end up with a very vicious and boring circle.
Let's look at football.
With the institution of the salary cap, along with free agency and the NFL's policy of giving the team with the worst record from the previous season the first draft pick, the pro football league has essentially mandated an economically level playing field. The result? A lot of interesting and unpredictable games, especially in the playoffs, and a cinderella story for the Superbowl - the Carolina Panthers. A league that used to be ruled by dynasties is now, I think, a much healthier institution (at least in terms of team makeup - whether refereeing has improved over the last ten years is a whole other question).
Now this is very interesting to me. Granted, the NFL is a closed economic system. But the league seems to have proven that a level economic playing field will not pull everyone to the bottom, but rather lift everyone up. MLB, on the other hand, is "semi-regulated - like electricity or farm price floors, which gets you the worst of the market and the worst of regulation." That last is a quote from my friend Leslie, an econ guru who works for HP. As she says, "hybrids don't work." If the MLB was truly a free market, with teams allowed to operate in any city and open competetion working to even the odds, we might get a more vibrant league. Too bad that's not the case.
:: Deb 11:51 AM :: permalink ::
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