A modest proposal: players should own the league (and eat babies)

I'd like to venture away from physics and toward economics:

I had intended for this blog to be more of a commentary on science and on contemporary science-writing, but I haven't posted in half a year so the initial grand designs appear not to tickle my writing bone.

So, while I wait to be inspired with posts related to the original purpose, I'll write a few serial installments of my manifesto.

It seems to me that there's a lot of inefficiency in the economic model according to which professional sports leagues operate. What, exactly, do team owners own? Well, they own the right to make decisions regarding the team and to collect the money the team makes. But that's a weird thing to own, isn't it?

Some sports teams are very profitable. So owning the rights to the profits of a sports team can be a great thing to own. But does it make sense?

In many businesses, it makes some sense for the owner to reap a profit. Although the workers contribute the value of their work, the owner contributes the value of his capital, which is an essential part of the final product. Example: In a factory, the owner provides the factory, and the workers work in it. Of course there's value inherent in the factory – the workers couldn't make whatever they make without the machines they need to make it. Marx wanted the workers to own the means of production, but he didn't deny that there is value in the means of production.

But a sports franchise is a very funny kind of business, because in many cases the owner owns nothing that's related to the means of production (often – as with the Celtics – the owners don't even own the arena). All the owner owns is the right to make money from what the workers – the players – do.

The owners of the Celtics (not to pick on them, but they're my favorite team so I pay more attention to them than to other teams) make something like $20 million per year. Some years it's less. Some years more. Their best player, Paul Pierce, makes only $15M this year. So, the ownership group (led by a fellow named Wyc Grousbeck, who seems like a great fan and whom I have nothing against except for a few quibbles with some management decisions) pockets as much money or more (for contributing no value) as the best player on the team does (for all the obvious value he contributes). If Wyc Grousbeck went on vacation and didn't do anything related to the Celtics for a month or so, fans wouldn't notice a lick of difference. If Pierce went on vacation for a month, well, earlier this season the Celtics lost 18 straight games while he was out, so we know what his absence means to the squad.

I don't think I need to belabor the point that the players contribute nearly all of the value in an NBA franchise. So I'd like to propose a superior economic model.

Imagine this:
° The NBA players all stop playing for the NBA. They then go to some investment bank – Goldman Sachs, for instance – and they say, "We want to start our own basketball league. Will you loan us some money so we can get off the ground?" Goldman Sachs does this sort of thing all the time. They finance people who have a great business idea but don't have enough capital to implement it.
° Goldman Sachs says, "Why will anyone watch your league?"
° The players respond, "Because we're the best basketball players in the world. People might have some affinity for team names like 'Celtics' and 'Knicks', but eventually they'll just want to see the best basketball players in the world."
° Goldman Sachs would say, "Sounds good to us."

In this new system, there wouldn't be an inefficiency to the tune of $20M a year going to a rich guy. The players could hire a management system and organize into teams with coaches and general managers. Because there wouldn't be such a huge inefficiency in the form of these owners, ticket prices would be lower, and ultimately fans would be happier.

And players should eat babies.