Inequalities in Professional Sports


 

               Domination, and the establishment of an overpowering dynasty is the goal of every sports franchise. In the world of professional sports, competitive success is dependent on the quality of the athletes and the coaching staff a team can assemble, which in turn is dependent on how much money a franchise has. The relative wealth of a sports organization is typically dependent on the regional market, giving large markets an inherent financial advantage over small markets. This then translates into a distinct advantage in recruitment. This is a clear example of  what Michael Walzer describes as  in justice in his article “Complex Equality.” Sports management organizations have a vested interest in maintaining parity with respect to the competitiveness of all participating teams, both for the good of the sport and ultimately for the financial health of the business enterprise as a whole.

In the article “Complex Equality”, Walzer describes a theory of justice which he believes is the best for society. In communicating his idea of complex equality he describes the relationship between distributive justice and goods, asserting that that each good is it’s own sphere, and that it should not intersect with other spheres or create any advantages in other spheres. Walzer believes that justice requires that each good be distributed in accordance with its own sphere-specific principles, which are identified through the interpretation of its social meaning. According to Walzer, a society is tyrannical if one good dominates others, and if the parameters of Complex Equality theory are violated.  In attempting to explain this concept he communicates,  “No social good x should be distributed to men and women who possess some other good y merely because they possess y and without regard to the meaning of x” [1](222). This theory directly relates to the inequalities that exist in professional sports.

In professional sports, one sphere is the city-specific market, defined as the size and socioeconomic status of the fan base. Another sphere is money, or the wealth of the franchise. A third sphere is personnel, which includes  players and coaches. As stated, Walzer believes that these spheres cannot overlap.  While that may be an ideal concept, how can there not be an overlap when the good in one sphere (fan base, socioeconomics) directly impacts the good in another sphere (money), which in turn pays the good in the third sphere (personnel)?  It stands to reason that the team with the largest money sphere will attract the best personnel simply because they have more money to spend. This is just one cause of complex inequality in the world of professional sports, and it has created many problems, resulting in a decrease in fans and thus in revenues.  With unequal talent levels between teams, games frequently become blowouts, creating an uneventful and predictable experience for the fans. If only a handful of dominant teams are capable of winning consistently and challenging for the championship, the sport’s attractiveness and excitement for fans and for television is diminished. I believe that steps must be taken to address this issue and solve the many problems which professional leagues face because if it.

Many professional sports leagues have created salary caps in an effort to address the issue of franchise dominance. Salary caps are limits on the amount of money a team can spend on player salaries. The limit is a per-player limit and/or an overall limit for the entire team’s roster. “Three of the four major American professional sports leagues including the National Football League, National Basketball League and National Hockey League all have salary caps in place. Salary cap proponents believe the system promotes competition, organizational intelligence and overall league revenues.” [2] Effective salary caps prevent wealthy franchises from behaviors which are destructive to the sport, such as signing a multitude of high-paid star players, preventing rival teams from recruiting talented players, and guaranteeing victory based on their economic power. With a salary cap, each team theoretically has the same capability to attract star players.  This promotes parity among the teams in the league with respect to talent, and should increase revenue both for individual teams (particularly in smaller markets) and for the league as a whole. This parity is essential to provide an exciting sports experience for fans and to allow all franchises to successfully sell tickets. Some sports do better than others in negotiating these salary caps. The National Football League (NFL) has the strictest salary cap rules, where as Major League Baseball (MLB) does not have one at all, but utilizes a luxury tax, which creates its own set of problems.

The NFL has recently dealt with significant controversy concerning salaries and salary caps. From March through July 2011, the NFL experienced a “lockout” due to conflicts between the players and the owners. The players were unhappy with what and how they were being paid, considering the dangers of their sport and the average career span of an NFL athlete. After much debate, the owners and players were able to negotiate a mutually acceptable labor agreement in time for the 2011 season. The new collective bargaining agreement has a salary cap of $120 million per team, and a salary floor as well, forcing all teams to spend at least $108 million, which is 90% of the cap. [3]The NFL is considered to be a “hard” salary cap, which means that all the teams must stay under the salary cap, which is different each year. Franchises can incur significant penalties for violating salary cap rules, including fines of up to five million dollars, cancellation of contracts, loss of draft picks, and even cancellation of seasons.[4] Although the hard salary cap does not insure parity between NFL franchises, it represents a strong effort to employ complex equality theory to professional sport, as each team must operate within the same total salary range.

Instead of a salary cap, MLB utilizes a luxury tax to control player salaries. A luxury tax is levied on teams that exceed an agreed upon total team (player) salary, which is determined annually. Each team is taxed on the amount of salary money that exceeds the annual limit. A team that exceeds the agreed upon limit must pay a penalty of 22.5% of the amount they were over within a five-year period. If the cap is exceeded a second time teams must pay a 30% penalty, and teams that violate the cap more than two times pay a 40% penalty. [5]I believe that this approach in trying to stop franchise dominance does not work, because although they are fined, franchises with more money are willing to pay the fines if it means that they will successfully attract the top athletes. The New York Yankees are a perfect example of how the luxury tax fails to stop franchise dominance. “George M. Steinbrenner, owner of the Yankees, has been billed $174 million of the tax’s $190 million total since 2003.”  In 2009, the Yankees contributed to over 95% of the total luxury tax payments. [6] Probably NOT coincidently, the New York Yankees have also won approximately 25% of all of the World Series. These facts make it impossible to argue that the luxury tax system is an effective means of eliminating franchise dominance in MLB. “”[The tax] doesn’t seem to stop them,” said  Mark Attanasio, owner of the Milwaukee Brewers. “But I don’t blame the Yankees, I blame the system. The Yankees are playing within the rules of the system. This isn’t sour grapes. You can’t blame the team so you have to change the system. They have a lot of very intelligent business people there. I’m sure they’re working within their economics.” This is a striking example of complex inequality, where the money sphere has overlaps with and impacts the personnel sphere, which leads to an imbalance in power between MLB franchises. Markets with a smaller regional market and an owner who cannot or will not spend $174 million to break the rules cannot possibly compete with the recruiting power of the Yankees.

The United States is a country founded on the concepts of equality and justice, and I believe fairness and equality must be an important aspect of professional sports. The industry has much to lose if fans perceive unfair and avoidable advantage between teams. Regional market size and strength cannot be changed, but separation of the money sphere and the personnel sphere within a franchise can and must be valued and enforced if any semblance of parity is to occur.  If franchises are able to dominate competition by using economic advantage to recruit greater talent, weaker franchises will lose their fans, which translates to lost revenue, and the potential for ultimate failure of the industry. It is important to take Walzer’s ideas on equality seriously, to insure that every team has an equal opportunity to compete. I believe that sports such as the National Football League (NFL) and the National Hockey League (NHL) who have attempted to fight inequality by instituting salary caps are doing the right thing. It was shown above that failure to negotiate firm salary caps will likely result in a dominant team that controls the league and wins the championships. I strongly believe that MLB needs to strongly consider adopting a firm salary cap, because, as is the case with the New York Yankees, when it comes right down to it, over time he who has the most to spend wins the most games.

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2 Responses to Inequalities in Professional Sports

  1. Jordi says:

    The “minor” sport of Major League Soccer has salary caps as well.

  2. Jordi says:

    Do sports mean something, do they have social value, outside the sphere of economics, of the value of a ticket relative to watching entertainment? TO me, that is the key to the relevance of complex equality.

    Also, I suspect your point about common economic fate has as much or more to do with TV contracts as ticket sales.

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