The hypocrisy between a country’s political philosophy and how its sports leagues are run

Julio is a American from Alabama. He just received his Masters in Engineering, tops in his class, from MIT. But this year, the top 100 engineering firms got together and selected one by one candidates to fill their available positions. It ensured that engineering talent was properly spread out around the country and decreased costs on the hiring process. The companies also determined that the underperforming firms would get to choose their candidates first.

Those that weren’t selected or didn’t agree to a position, wouldn’t get a job in engineering this year and would have to go through the process again next year. Julio was honored to be chosen 2nd overall, because because he worked really hard to achieve high scores in school. But he didn’t like the company that selected him. In his mind, they weren’t a good personality fit and they had large debts. They were also located in Nome, Alaska.

Friends, clearly, this is not a true story. This couldn’t happen in America, it feels fundamentally un-American.

But it does happen.

Its called the professional sports draft, and all the major North American sport leagues have them and are the only leagues in the world that I know of that have them.

AND here’s the kicker, the general American public not only accepts the draft, they look forward to it. This strikes me as odd. Because I can also safely assume that the American public wouldn’t accept the Engineering draft I described above.

This, my friends, is what this post is about. The hypocrisy between a country’s political viewpoints and how its sports leagues are run. Because its not only an American thing.

Let’s take a simple quiz.

I will list a word that sports leagues use around the world to describe their philosophy for how teams can acquire athletes. First, we will determine which words 1) sound more capitalistic (i.e. lightly regulated free market) or 2) sound more socialistic (regulated market where the goal is to level the field).

(NOTE: I’m not advocating for either system. I’m not saying socialism is better than capitalism or vise versa. This is simply an observation I’ve made between how citizens cheer for teams one way and then turn around and vote another way.)

  • Draft: The draft is a process where new players coming into the league are selected by teams. Players have no say in where they end up, if they want to play in the league (John Elway and Eli Manning the exceptions). The draft order is usually determined by the worst team from the previous season getting the first pick. In other words, the last shall be first and the first shall be last. This is a socialistic philosophy.
  • Salary Cap: This is a league dictated maximum payroll teams are allowed to spend on players. It’s intended to stop the big teams from vastly outspending the smaller ones and keep a financially fair field. Another clear socialistic sounding philosophy.
  • Luxury Tax: This is a method used when leagues don’t want to impose a hard salary cap, but want to slow down some teams spending. The tax is issued when the team exceeds a certain amount, and the tax is paid back to teams below the tax threshold. If I remember the last U.S. Presidential campaign correctly, taxing the rich equals fascism or was it socialism or was it both? I’ll call this socialism to be safe.
  • Revenue Sharing: This is when the top earning teams pay the lesser earning teams to maintain a competitive balance and ensure the bottom feeders can be profitable. You guessed it, Socialism!
  • Relegation: If your team finishes in the bottom three at the end of the season you lose your spot in the league. The successful continue, the losers are out. Capitalism.
  • Promotion: If your team finishes in the top three of your league you get to move up to the next league. Increasing your status by pulling up your bootstraps. Capitalism.
  • Posting Fees: A team has put you on the auction block. If you sign with an another team, the team that signed you needs to pay the team you left a set fee. This type of dealing is common in Capitalism.
  • Selling: Similar to posting fees, this is when a player wishes to move on or their current team wants a player to move on, but they are still under contract. The two teams then negotiate a fee to be paid to the selling team. A fair transaction at market prices. Capitalism.
  • Loans: When players aren’t getting a lot of playing time, they are often “loaned” to another team for a set period of time. This leans more Capitalistic.

Now let’s go back over this list to determine which of these terms are more common to North American Sports Leagues or European Sports Leagues:

  • Draft (socialist): North America
  • Salary Cap (socialist): North America
  • Luxury Tax (socialist): North America
  • Revenue Sharing (socialist): North America
  • Relegation (capitalist): Europe
  • Promotion (capitalist): Europe
  • Posting Fees (capitalist): Europe
  • Selling (capitalist): Europe
  • Loans (capitalist): Europe

Surprisingly, North American sports leagues have more of a socialist leaning in economic philosophies despite the regions (or at least the U.S.’s) political propensity towards ‘freedom’ at all and any cost.

AND the European leagues have more of a cutthroat method of competition (losing a spot in a league is a tough pill to swallow) but they allow for easier movement of players to locations players want to go while their governments look for ways to ensure their citizens are well taken care of.

At a grander level, I think it shows that there are institutions important to citizens that are showing the rest of their country that maybe some preconceived notions towards a political philosophy may be ignorant at best. And that maybe we should take a deeper look at the economics of sports leagues to determine which are going to be healthier in the long run, so that parallels can be made at the political level.

I guess what I’m attempting to say is that sports aren’t people. Sports may prick our pride, or give us joy for a moment, but they don’t affect (or at least shouldn’t affect) our mental and physical health. Therefore, we should use sports as an economic testing ground, much like scientists (rightly or wrongly) use rats, monkeys, and pigs to study human health, to help study the cause and affect certain policies have on the economic well being of a league and thusly a nation.

(H/T to @maudav for some initial discussion on this topic.) (Image credit: http://freestock.ca/flags_maps_g80-world_map__abstract_acrylic_p2970.html)

5 Responses to The hypocrisy between a country’s political philosophy and how its sports leagues are run

  1. Peter

    You have hit the irony on the head.

    You also missed the following: Team owner states he can’t compete based on an old stadium/arena. Team owner asserts pressure on local governments to provision dollars towards this major capital cost upgrade project, whereby the taxpayer foots the bill to build the stadium. The owner gets a massively subsidized rent deal as well, tax rates reduced to almost zero, rights to revenues from concession, parking, stadium naming rights, etc.

    Socialism. Extortion could also be an accurate statement.

    But the real question is where are all the angry tea party grassroots folk and why aren’t they rioting in the streets?

    • Great comment @Peter, I’m glad you see the irony and do also wonder why the Tea Party doesn’t picket this.

      For the record, another reader mentioned I also missed the influx of American owners going into the EPL and bring financial fair play initiatives with them. Just strange.

  2. Peter

    On sports radio, it was explained to me that the pro sports leagues are collectives in the US. It is capitalistic because nobody is prevented from starting a competing startup league. Which brings the question of is it a de facto monopoly? Because clearly the US government knows that monopolies gouge consumers.

    Solution – a $200 billion US subsidy to launch 2 other pro football leagues to compete with the NFL. Some percentage of NFL revenues are forked over to these “competing” leagues to ensure there is competition in the market place.

    • @Peter – Congress could simply force the NCAA to professionalize and then the competition would be right there.

  3. Lisa

    Interestingly enough, many of US pro sports leagues are structured as nonprofits. MLB is an exception. That is, the NFL, NHL, USTA, the NCAA etc are exempt from paying taxes, not that you can claim a deduction when you buy a $400 ticket to a Bears game. I wonder if these kinds of structures contribute to the more socialist kinds of rules…

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