Sunday, February 03, 2008

The politics of sports...

Reading recently about baseball in Cuba, I was appalled to learn that the best players from the Havana team Metropolitanos are regularly taken from the team and sent to the other Havana team Industriales. I considered this practice corrupt and an example of what is wrong with the political system in Cuba.

Then I realized that what happens in Cuban Baseball is exactly the same as what happens in professional European sports. In European team sports the best players are also regularly moved from smaller teams to the bigger teams. Wealthier clubs, such as Manchester United and Chelsea, simply buy the best players from other clubs or lure them from away with bigger contracts. The result is that all European sports leagues are dominated a only few teams, just as Cuban baseball is dominated by Industriales and Santiago de Cuba.

In Europe sports are run on free market principles, particularly after the Bosman ruling by the European Court of Justice in 1995, with laws prohibiting any limitations on the free movement of workers and capital. The end result is, however, not that dissimilar from what happens in communist Cuba!

Interestingly, US professional team sports are not run on free market principles as in Europe. Rather the sports are socialized with mechanisms to regulate and limit the power of money, including inter alia: restrictions on player movements, the draft, salary caps, revenue sharing and closed leagues with no promotion or relegation. These mechanisms have helped maintain a healthier competitive balance and greater equality between the teams than in Europe.

The US system is of course essentially capitalist. The leagues and clubs are business whose sole purpose it is to organize sports events for economic profit, but the system of regulations does seem to taken straight out of a Keynsian economics text book. It could therefore be argued that while European sports leagues are models of pure capitalism and Cuban baseball of communism, US sports are maintaining the social democratic ideal!


At 04 February, 2008 12:22, Blogger Lasse Bech said...

Why not try to send this brilliant reflection to a mayor newspaper as a "letter to the editor"?

At 05 February, 2008 10:06, Blogger Torsten Pedersen said...

Thanks Lasse, but I'm don't think my piece is deserving of a wider forum than this. Somehow I know that my analysis is flawed and too simplistic.

It has, however, always fascinated me how US sports have been run as 'de facto' monopolies (Major League Baseball actually has an official exemption from anti-monopoly laws). In European competition law such monopolies would not be allowed to exist. Or could you imagine Man U. or FCK agreeing to share their profits with other clubs?

We cannot know, however, if American sports would be more profitable if they were run as European sports. Economists may indeed be able to create a model showing the inefficiency of the American system. But would it be as much fun to follow these sports if they were more like the Dutch, Scottish or Danish football league, where the same 2 (or 3) teams dominate each year?


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