Friday, July 1, 2011

Underthinking Professional Sport

So the inevitable has happened, the NBA is going into lockout. The NFL has been in lockout for the last couple of months. And about 5 years ago, an entire season of the NHL was lost due to a lockout. Now this doesn't mean that the sports teams lost the keys to all the stadiums and couldn't play.

"S**t, I thought you had the keys, who is going to tell the fans?"
Essentially what it boils down to is that the players and owners of the teams cannot agree on contracts, most commonly how the revenue is split between them, but sometimes to do with strange clauses.

"I SAID I WANTED THESE LINES TO BE YELLOW, I AIN'T PLAYING TILL THEY ARE YELLOW"
So the management lock the players and staff out of the facilities until some sort of agreement can be made. Most often it is the players claiming that their cut of the pie isn't big enough.

"With my current salary I can only afford 2 of these cars"
These players are making mega-bucks anyway, but they feel they deserve more, since the product as a whole makes a lot more money than its total salary bill. And at the end of the day you can't have sports without players.

Well... maybe you can.
This is a valid argument to an extent, except the players don't own the teams or the league. They are merely employees, which means they don't take on the liabilities that the owners take on.
So if its a good season, with plenty of crowds the players get paid, and the owners make money, if it is a crappy season with no crowds, the players still get paid the owners take a bath.

Looks like I need a bath.
As a side what a ridiculous saying, so if you lose a lot of money it is the same as taking a bath? How is that relevant, unless you lost so much money that you know live like a hobo so you need a bath. But then you aren't so much taking a bath as needing a bath.

They definitely need baths, doesn't mean they get them
So anyway, my point is the players really have no liabilities in this, whereas the owners do, hence why they take a bigger cut. It is why the CEO of a company makes more money than the guy that builds the product. If the product tanks the guy (hopefully) get paid out his wages, the CEO takes the loss.
So if players want to earn any more then they do they need to increase their risk in the company. I.e have ownership in shares perhaps, that way if the season performs well they make more money, if it doesn't they make less or lose money.

"Nets stock just dropped 3 points yo."
There is no way players would accept those terms, because it is too big a risk. But that is why they are stuck with a low percentage of the revenue, because the owners are taking the risk. Just my thoughts anyways.






11 comments:

  1. Stupid American sports leagues need to sort their crap out.

    ReplyDelete
  2. Players have not liabilities?! really Azzy? ... hows your face? or are you just checking to see if your readers are wealthy enough to pay attention..

    ReplyDelete

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