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Source link: http://archive.mises.org/16637/goodell-pleads-to-save-bureaucracy/

Goodell Pleads to Save Bureaucracy

April 26, 2011 by

In response to yesterday’s injunction, National Football Leader Praetor Commissioner Roger Goodell took the op-ed page of the Wall Street Journal — the people’s newspaper! — to complain that the ultimate result of all this nasty litigation will be a free market for NFL player services. And that would be bad:

In the union lawyers’ world, every player would enter the league as an unrestricted free agent, an independent contractor free to sell his services to any team. Every player would again become an unrestricted free agent each time his contract expired. And each team would be free to spend as much or as little as it wanted on player payroll or on an individual player’s compensation.

Wow. It sounds like NFL players want to be treated like workers in most other professions. Goodell wants to treat them like government schoolteachers, where salaries are fixed by a union contract and primarily reward seniority.

Goodell continues:

Under this vision, players and fans would have none of the protections or benefits that only a union (through a collective-bargaining agreement) can deliver. What are the potential ramifications for players, teams, and fans? Here are some examples:

• No draft. “Why should there even be a draft?” said player agent Brian Ayrault. “Players should be able to choose who they work for. Markets should determine the value of all contracts. Competitive balance is a fallacy.”

Goodell never refutes this. He simply implies it’s nonsense. But Ayrault was right on the key point: “Competitive balance” is a fallacy, at least with respect to the impact of the rules Goodell advocates below.

• No minimum team payroll. Some teams could have $200 million payrolls while others spend $50 million or less.

• No minimum player salary. Many players could earn substantially less than today’s minimums.

This is the core fallacy. Goodell equates “competitive balance” with keeping every team’s payroll at or around the same level. But the NFL has fixed its payroll levels for years — and yet there’s still a clear disparity between good teams and bad teams. Yes, bad teams occassionally have good seasons, but that speaks to the real cause of the NFL’s apparent competitive balance: the short schedule. If Major League Baseball only played 16 regular season games a year, the higher payrolls of the Yankees and Red Sox wouldn’t be quite the advantage it is under the present 162-game schedule.

(Tellingly, the schedule is the one thing Goodell wanted to tamper with earlier in the labor negotiations, expanding the regular season to 18 games; that would do far more to reduce “competitive balance” than eliminating salary minimums.)

• No standard guarantee to compensate players who suffer season- or career-ending injuries.Players would instead negotiate whatever compensation they could.

• No league-wide agreements on benefits. The generous benefit programs now available to players throughout the league would become a matter of individual club choice and individual player negotiation.

• No limits on free agency. Players and agents would team up to direct top players to a handful of elite teams. Other teams, perpetually out of the running for the playoffs, would serve essentially as farm teams for the elites.

• No league-wide rule limiting the length of training camp or required off-season workout obligations. Each club would have its own policies.

• No league-wide testing program for drugs of abuse or performance enhancing substances.Each club could have its own program—or not.

Over and over, Goodell repeats, with an obvious sneer, “each club would have its own policies” in the absence of a monopoly-union labor agreement. He argues that some players would end up worse off left to their own devices. How does he know? Until the league tries a decentralized labor system, it’s impossible to know who would be better or worse off.

Goodell ends with a flourish of economic illiteracy:

Is this the NFL that players want? A league where elite players attract enormous compensation and benefits while other players—those lacking the glamour and bargaining power of the stars—play for less money, fewer benefits and shorter careers than they have today? A league where the competitive ability of teams in smaller communities (Buffalo, New Orleans, Green Bay and others) is forever cast into doubt by blind adherence to free-market principles that favor teams in larger, better-situated markets?

Nobody ever accused the NFL — one of the largest recipients of government welfare via stadium subsidies — of “blind adherence to free-market principles,” and it’s obvious Goodell doesn’t even understand what those principles are. On the one hand, Goodell raises the antitrust problem: the league can’t maintain many of its current rules without the support of a union, because to do so would invite antitrust lawsuits like the one that led to yesterday’s injunction. Goodell seemingly endorses the notion that antitrust promotes free markets, but his league must be allowed to violate those principles in order to survive. That is yet another fallacy.

In truth, there’s nothing anti-free market about a group of private businesses adopting rules they believe will advance their economic self-interest. The problem here is that Goodell seems more intent on maintaining the league’s bureaucracy then adopting sensible business policies. Goodell is the chief bureaucrat, so his stance is understandable, albeit not laudable.

As I’ve argued before, much of the league’s spending on players is driven by the demands of the bureaucracy itself. This Thursday’s NFL Draft is a prime example. Eliminating the draft would likely reduce overall spending on rookies and discourage individual clubs from paying a premium for unproven talent. The Draft creates an IP-like artificial scarcity that restricts the ability of club managers to negotiate the most favorable terms with prospective employees. This has nothing to do with so-called competitive balance; the league maintains the Draft because of tradition — or inertia — and because it values the additional marketing exposure during its offseason.

But there’s an even more direct argument against Goodell’s “we can’t let the players be free agents” mantra: If a decentralized labor system is unacceptable when it comes to playing talent, why is it acceptable when it comes to managerial talent? After all, coaches, general managers, scouts, and all other non-player personnel aren’t subject to the rigors of a government-sponsored union contract. Teams are generally free to hire and promote managerial talent as they see fit. Yet we don’t hear any complaining from Goodell about out-of-control spending on general managers or offensive coordinators. Dan Snyder can hire five coaches in ten years — often at record salaries — but somehow it’s inconceivable that a backup right tackle could negotiate his own contract without strictly adhering to a 300 page labor agreement negotiated by a union he may never have consented to join.

And that’s really what Roger Goodell really cares about — that labor agreement. He values rules and regulations more than anything else. It’s what justified the existence of the commissioner’s office in the first place. Clearly, Goodell contributes nothing to the product of professional football; all the evidence of Goodell’s tenure suggests just the opposite. And as much as Goodell gripes about the players resorting to litigation over negotiation, the truth is that nobody benefits more from the government’s involvement in the NFL — be it through labor or antitrust law — as the “commissioner of the National Football League.” He holds a quasi-governmental title for a reason.

{ 3 comments }

Paul Tenney April 26, 2011 at 9:23 am

S.M. — I’m not pro-owner (nor pro-player) in this argument, but I think you’ve gotten off base here. Let’s focus on the facts: this WHOLE problem goes back to state intervention into the market for professional sports in the first place. Why are you anti-NFL, and not anti-player? Have not the players also committed the treachery of being repeatedly and vigorously propped up by the state? Of course they have — both sides are guilty. This all goes back (at least) to the AFL-NFL merger of the late ’60′s, when the NFL was threatened with anti-trust blowback for their efforts (when, of course, 10 years earlier there WAS no AFL, and they did already in fact enjoy a single-provider status of professional football in America). Why did the merger go through? Why, because the NFL agreed to a swath of stipulations — recognition of the NFLPA, no games on Fridays or Saturdays (so as not to compete with High School or College football) etc. The point is — the STATE stuck their nose in this whole affair first, and that’s what’s caused this current mess. Let’s be consistent — as free-marketers, the state is always to blame (if there were no state, who would the NFL get to force citizens to pay for their palaces?).

Now, in terms of Roger Goodell’s lack of economic understanding, you’ve mixed up so many concepts I’m finding hard to figure out where to start. Your whole post reads like the old argument many libertarians used to use, “I’m not in favor of a salary cap because that’s a form of central planning.” But when it’s central planning by a private business, in a voluntary market, there’s absolutely nothing wrong with it! Why, but the same argument, why shouldn’t one team find it advantageous to line up 12 players instead of 11. Who’s to say that’s wrong? It’s a free market isn’t it?

The point is, the whole system here should not be equated with a “free market” because that’s not what they’re trying to achieve. It’s a game, and what is best for the game is to make sure that they have a set of rules that produce the optimal circumstances to make money — the better the competition between teams, the more interesting is every single game to the fan. Revenue sharing isn’t socialism, it’s good business! In fact, it’s the free market in action! Business owners, deciding with their own resources how to split up the pie so that in the end they all make more money. This is why they have salary caps. This is why they have restrictions on free agency. It makes the game more interesting.

Basically, for you to argue that the NFL can’t do these things, or shouldn’t want these things, you are arguing that somebody else should tell the NFL what to do with their scarce resources. I really think you’re off the mark here. They have every right to decide who to hire and how to hire them. If they want to have a draft, that’s their right. It’s not a free-market within the NFL organization — it’s a game. It’s a product. The players have no more right to decide what team they want to play for in the NFL than I have a right to decide what job I want within my company. They choose to hire me based on what they want from me and I either agree to the terms or not. If the players don’t like it, they’re free to organize as they want and protest or form another league. All of this should happen in the absence of state interference, and that’s what Mises et al would say too.

Bottom line — the state needs to butt out, the owners need to quit asking the state for stadium money, monopoly TV contracts, etc., and the players need to quit using the courts to hold up bogus “pro labor” deals. Let’s focus on that, not on artificial constructs of the “free market” that aren’t even relevant within the confines of a single private entity.

S.M. Oliva April 26, 2011 at 9:33 am

” for you to argue that the NFL can’t do these things, or shouldn’t want these things, you are arguing that somebody else should tell the NFL what to do with their scarce resources. ”

That wasn’t my position at all. The NFL is perfectly free to adopt whatever rules it wants, as far as I’m concerned. And I’m free to point out why those rules are dumb and counter-productive. I’m not one of those libertarians who thinks every private business decision is sacrosanct or beyond outside critique.

Paul Tenney April 26, 2011 at 9:44 am

Alright, you are right. I’ve gone too far on that point. I was sort of saying, “it seems like that’s where this logic is leading,” but you are right that you didn’t say that. Address the rest now, por favor!

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