Those who study politics and economics often look for models, in order to test on the micro scale the effects of policy on society as a whole. These models help to show how competing policy approaches can potentially play out in a real world environment. Two concepts that I see as important to our country, both politically and socially, are equality of opportunity and economic redistribution geared towards promoting social welfare. The world of professional sports in the United States gives us two useful, contrasting models of the effects of these concepts on competition.
Baseball and football are two of America’s most beloved pastimes, having tens of millions of fans each, spread across all fifty states. As I grew up in Boston, I saw firsthand the borderline religious fervor that baseball and football could arouse; one only need attend a single Patriots or Red Sox game in order to see the level of dedication many fans feel towards their local sports team. However, despite their mutual popularity, baseball and football teams, financially speaking, are organized in completely different ways.
An analysis of these financial structures has the potential to illustrate the effects of equality and redistribution on an industry as a whole; in short, football teams have salary caps and pooled revenue sources while baseball teams operate in the free market. Contrary to prevailing “free market” ideology, professional football has thrived even with its aggressive self-regulation of market tendencies, price control and redistribution of resources.
Major League Baseball is organized around thirty competing franchises, which funded primarily through ticket sales, private funds, and advertising. There is virtually no revenue sharing (economic redistribution) and equality of opportunity between teams. Thus, teams with larger markets ( like New York and Boston) are able to raise far more money than those with small markets (like Milwaukee and Kansas City). The teams that have access to more money are able to buy the contracts of the best players by overbidding the smaller teams; thus, these teams tend to get the better players. Having a better pick of players in no way guarantees victory, but it does give certain franchises a steep advantage over others by allowing them to lure talent away from the opposition (Not to hate on the Yankees, but they are legendary for doing this; right back to the days of Babe Ruth, up through Johnny Damon in 2005 and beyond).
Baseball illustrates a society where those with money and increased access are able to get advantages that those who don’t have resources cannot. There is no redistribution of wealth from the richest teams to the poorest teams, thus there is no guarantee of equality of opportunity. If we consider baseball as a microcosm of society as a whole, we see an unregulated society where the market alone determines the distribution of all resources. While everybody plays by the same rules of the game (analogous to our laws), some are able to gain an advantage before the game even begins. The rich do not pay to advance the interests of the poor, thus the poor are often unable to compete on a level playing field with the rich in the competitive market. Baseball illustrates the right wing concepts of a free market driven society, where the government (MLB) does not interfere to make certain that everybody has equal opportunity.
Major league football is based around a centrally governed organization (The National Football League) which operates using profit sharing and salary caps in order to preserve fairness. While the revenue streams of football are virtually identical to those of baseball, coming primarily from television contracts, advertisements, tickets, and other merchandising, the distribution of money is much more equitable. The money that comes from the NFL media contracts is distributed equally among all teams, regardless of the size of the venue. Smaller teams receive the same amount of money from the NFL that larger teams get despite their smaller profitability. When combined with the salary cap on players, this redistribution policy prevents any one team from buying all of the superior players’ contracts.
Some teams do have superior talent, but this is unlikely to be due to them spending several times more than any other team. In football, the income disparity between players is far lower than that of other professional sports, like baseball. By promoting a level playing field, the NFL attempts to give every team a fighting chance to make it to the Super Bowl, and thus advance the entire sport.
When translated into a societal model, football is a much more socialized society than that of baseball. In football, the opportunity for individual teams to dominate access to large venues and high profits is minimized by the redistribution of wealth between teams, creating a situation where every team has a similar opportunity for success. The most profitable teams subsidize the less profitable ones, making access to money is less important than teamwork, training, skill and coaching.
The NFL revenue sharing situation illustrates how progressive taxation in society redistributes wealth downward, as well as horizontally, so that those without money have an increased chance of success. This situation makes it less likely for a few entities to retain monopolistic control over the league. Without this redistribution, the teams with larger amounts of money would reduce competition in the game/market in order to gain an advantage over others.
A society with strong redistributive programs which fund field-leveling programs such as infrastructure, education and a social safety net, will, like the NFL, promote increased equality and advancement based upon skill. The policies of the NFL illustrate the progressive concept that income redistribution aimed at boosting those with fewer resources can promote fair competition and increase the welfare of society as a whole.