There’s not enough money in sports. I know that LeBron James makes nearly $45 million every year, that the Golden State Warriors had a payroll over $175 million last year and that the NFL signed a media rights deal worth over $100 billion in total value. I know those numbers seem completely out of control, but I promise only the last one is. Hear me out.
The amount of money circulating in professional sports is in fact controlled by cartels that intentionally limit the amount of money teams can spend to artificially increase competition. Despite sounding eerily like a pitch for an HBO drama about a tenacious young detective’s desperate attempt to stop Chicago’s crime bosses from fixing the World Series, it’s actually the basis for the entire industry of professional sports in America.
The cartels, chief among them the NFL, NBA, NHL and MLB, hold near-total monopolies on the American market for their respective entertainment products. Artificial reduction of team spending to increase parity is commonplace across the board, and the leagues act as coordinated bodies to ensure it. Don’t ask them about it though, they disagree.
What the leagues sell is competition itself, so they have invented a variety of money-limiting mechanisms that ensure its quality. Take the salary cap, which limits the amount of money each team can spend on player contracts each year to ensure the playing field is level. This is, in theory, to prevent the wealthiest teams from simply writing the biggest check to every good player and winning every year, thereby destroying any real competition and rendering the product valueless. Money is intentionally left on the table, but whose money is it?
If a team was willing to pay LeBron James more than $45 million for his services in a year, they are simply not allowed to. Yet if the Swedish Government — for whatever reason — wished to pay $500 billion to the NBA, or roughly their entire GDP, for the rights to broadcast James’ games on Swedish television, there are no rules preventing them from doing so. The profits can be endless, but the compensation is capped. Player salaries do increase with profits, but only for specific sources of income. It is their money that is being sacrificed to maintain competitiveness.
In most other cases, a company that artificially gauges prices and worker compensation because it has no market competition would trigger antitrust legislation from Capitol Hill. But American sports leagues are not AT&T in 1982 or Standard Oil in 1911. They are cultural institutions, and because of that, they don’t believe they are subject to the same rules as everyone else.
And I’m not sure that they’re totally wrong. While they operate in legally dubious waters, there is certainly something different about sports from other historical monopolies. I don’t particularly care for my wireless carrier, and I certainly don’t like paying for gas. But I felt like my life was on the line when, staring at my TV with my dad in 2013, I heard a particular crack — the sound that only David Ortiz’s bat makes — lift the ball into the bullpen with the bases loaded and the security guard’s hands raised in celebration.
The competition that these monopolies provide, for better or for worse, means something real to millions of people. I only wonder if leaving players’ money on the table to maximize profits isn’t just another form of monopolistic worker exploitation, and whether or not I can live with that.
