OK, so it was a rough day at my day job today; lots of conflicting priorities, too many people with needs, but none with anything more than hunches or other anecdotal nonsense to either quantify or qualify them. Pretty typical, really - just more intense than usual.
But what it did - now that I'm home and it's quiet, and my brain is re-focusing on other things - was get me thinking about how major professional sports are forced to operate under such a ridiculously non-standard business model. Especially major league baseball.
Think about it. In a typical business (depending on where you are on the maturity continuum, as it differs for new businesses vs established ones), revenue growth is #1, and profit is #2. It can be the other way around, but those two things are always paramount. You really need both, especially long-term, and they swap places a lot. Unless you're running something of a non-profit nature, of course.. but those businesses chill me to the freaking bone, so I'm not talking about them here.
In professional sports, WINNING is #1. Always. And your primary consumers (fans) will tear you to shreds if they catch you thinking otherwise. Which of course, you have to. But you kind of have to pretend that you aren't, or at least, you have to come up with an awesome excuse when it's obvious that you are.
In a normal business, you're in it to make money. It's obvious and it's expected, and nobody takes any offense to it, because if you don't, you shut down, and your stakeholders can't re-coup their investment. Everyone loses. Pretty much end of story. But professional sports operate under the most extreme magnifying glass in the entire business world, and have this wierd-ass community-ownership component; every fan feels they have a stake and a say, to some extent, and they simply do not give a crap about your bottom line. And unfortunately for owners, those fans are their lifeblood; the business can't exist without their support - and they aren't capitalists. To them, the results aren't measured in terms of dollars and cents, they're interpreted from wins, losses, and championships. At the end of the day, revenue and profit are essentially irrelevant to anyone other than the owner.
That's strange, folks. And damn hard to do a good job with. Almost impossible. In this kind of situation, you're constantly juggling fan needs and expectations against the need to balance your budget. And those two don't reconcile under free-market conditions. Or even under pseudo-free-market conditions, like those that exist in pro baseball.
Now, it's much easier on the owners in sports with a hard salary cap. Infinitely easier. You have a maximum amount that you can spend on players, and it's the same for every team. To a very real extent, that eliminates the constant pressure by fans for the owner to overspend on players, and player salaries are the #1 cost center in pro sports. The emphasis moves away from salaries, and I think that's a relief to everyone involved: owners, players, coaches, and fans alike. The NFL is thriving under this kind of system.
I wish they had a hard cap in baseball, but they don't, though I think it's inevitable. The system probably can't survive in it's current format, at least not long-term. Feel free to disagree with me, but... you'll be wrong. The sport is so competitive now that the obvious market inefficiencies are drying up, and when new ones come into play, they're much less significant than before. The gap between the haves and the have-nots keeps growing, and there is less and less inefficiency for the have-nots to be smarter about and take advantage of. Eventually, it just comes down to resources, and those are largely driven by location, and of course, population.
Now, guys like Bud Selig and others at MLB (Andy MacPhail will take his place, eventually, write it down) will get creative and push off that day for as long as humanly possible. They'll extend the playoff system, juggle the divisions, grant additional rights to have-not teams that lose players, etc.. and it could even work. For awhile. But not forever. Eventually they (the owners) are going to have to decide to stick to their guns and stand firm against the union, lock them out for a season or more, and force a hard salary cap into the equation. And it will SUCK, for everyone. Fans will be pissed, players will go insane, and the owners will lose a ton of money. Teams might even fold, other leagues might get formed, there will be dogs and cats sleeping together, you name it.
But eventually, it will work out for everyone. A system that utilizes a hard cap can be fair to owners and players alike, as long as that cap represents a percentage of revenue, and that percentage is negotiated, and subsequently adjusted, regularly.
But really, my whole point to this post is that the system is insane. I'll leave you one thing to think about as I close this one out - over the last 2+ years, the Pirates got absolutely skewered by their fan base and the other owners alike, because it turns out that they were $20 million more profitable than they said they were, and they didn't immediately turn around and "invest" that money into player salaries that wouldn't likely have furthered the fans win/loss goals any further, anyway.
The bastards. How could they NOT waste money on unproductive siginings? That's what everyone else is doing! It's only fair! What? They say they want to invest in the draft (which they did)? BAH! Liars! HOARDERS! String them up!
The world is nuts. Feel free to disagree.. but again, you'd be wrong.
No comments:
Post a Comment