Friday, August 19, 2011

The Yankees, the Pirates, and economic policy

I’m a Yankees fan, a big one.  I’ve been a Yankees fan since I was 8 years old.  I don’t remember why, but despite living in Flushing, Queens (New York) and being a Mets fan, I decided to become a Yankees fan.  So as a sports fan I’ve had a decent life (I also grew up a Buffalo Bills fan, so I’ve suffered some too…).  This year after Joba Chamberlain was lost for the year with an injury I realized, for the first time in my life as a Yanks fan, they really have no shot this year.  Their lineup is old, starting pitching unproven, and bullpen broken down; imagine such a thing!  I had to accept what most fans of teams deal with almost every year.  Of course it’s not like I’m Pittsburgh Pirates fan, a team which has not had a winning season since 1992.   The Pirates, after competing in the National League Championship Series in 1990, 1991, and 1992 have failed to even break a .500 winning percentage since!   This year they have been above average this year, but unfortunately have fallen below .500 due to a tough losing streak.   

Major League Baseball (MLB) is perhaps the most capitalistic sports league in America.  The Yankees payroll this year is nearly $200 million while the Pirates are under $50 million.  Even worse are the Kansas City Royals with a payroll around $35 million.  Thanks to the enormous revenues brought in by being based in the huge economic market of New York City, the Yankees have been able to turn that income and spend lots of money on their payroll.  Teams like the Royals and Pirates, whose owners could be criticized for not re-investing profits earned into the team payroll, still find themselves at a huge competitive disadvantage financially.   It’s teams like the Yankees who can offer mammoth contracts to players like Mark Texeira ($23 mil.), Alex Rodriguex ($30 mil.), and Derek Jeter ($15 mil.). The Yankees spend nearly as much on their starting infielders than the Royals and Pirates entire payroll combined!  This spending power enables the Yankees to make a few mistakes here and there; see Carl Pavano, Tony Womack, Kei Igawa,  and Javier Vasquez.  That’s over $100 million spent on players who were basically complete busts! For the Yanks though, they just grin and bear it.  Teams like the Royals and Pirates don’t have the luxury of making bad decisions financially, if they make a mistake or two they’re screwed for quite a while (like 20 years if you’re the Pirates).

MLB is called “America’s pastime,” certainly fitting since the National Football League (NFL) is by far the most popular sports league in the US right now.  A big difference between the NFL and the MLB is in their economic systems; while MLB allows a team to spend as much as it wants (though there is a tax is a team spends over a certain amount), the NFL has a strict salary cap and, get this, revenue sharing among the teams.  NFL revenue like TV contracts, jersey and ticket sales get split up to the different teams. How’s that for socialism?! Among America’s most popular sport no less!  Quite a while back the owners realized that the league would be a lot more interesting if all the teams had an equal opportunity to succeed, and sure enough every year around this time, nearly every fan thinks this is going to be their team’s year.

This revenue sharing in the NFL isn’t a fool-proof system, for example the Cincinnati Bengals and the Cleveland Browns, but even those teams have made the playoffs in the last 10 years.  The Pirates haven’t had a winning season in 21 years!  What does this show, more financial resources gives you better opportunities while less resources gives you less opportunities.  What do I mean? If the Pirates or Royals make 1 or 2 bad decisions it could really screw them for a few years.  The Yankees meanwhile just sort of “write off” these bad decisions.  They can “afford” to, they’re making tons of cash!

What am I getting at here? In life, just like in the MLB, money buys additional opportunities. A young person coming from a wealthy family can “afford” bad decisions just like the Yankees can; party too hard at college and fail out or waste away a scholarship opportunity for example.  It’s no sweat, “there’s plenty more where that came from…”  Someone coming from a lower socio-economic level just doesn’t have the same monetary safety net.  Make a bad decision or two and their suddenly the Pittsburgh Pirates!  The Pirates have suffered for a generation, the same goes with folks from lower income levels, make a mistake or catch a bad break and its tough luck, and there’s not really a whole lot to do about it; there just isn’t the financial resources there to absorb that impact.

If America’s favorite sport right now, the NFL, has a economic system that borders on socialism, where every year every team starts on a basically level playing field, wouldn’t that make sense for real life?  And enough with this argument that overtaxing folks will discourage them to make money or work hard; the Yankees pay a tax every year because they’re payroll is so high, yet I doubt they will try to cut Jeter or Rodriguez!  Isn’t it time we level the playing field a bit by giving everyone a fair shot?  And yes, this does leave room for “personal responsibility,”  ultimately someone’s success or failure is up to them; the Bengals and Browns show people can still mess up a pretty good system, but at least Bengals and Browns fans can hope anew at the beginning of every season, unlike the lowly Pirates fan… Sure every once in a while Peyton Manning call pull of a miraculous comeback down 21-3 to win an AFC championship.  Yes, The Pursuit of Happyness is a nice story, but in real life those rags to riches stories don’t happen nearly as often as we’d like them to.  In the game of life, being down 18 points at the beginning isn't as easy to overcome as Peyton Manning makes it look like.

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