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More on the perfect league

Greg at the Sports Law Blog critiqued my principles of sports league design.

He's right that relegation - the trap door - to insure all teams put forth serious effort has no chance of being adopted in American professional sports. Monopolies don't relinquish their market power unless prompted by government, and the Justice Department is not currently interested (they have been in the past though, so there is some hope). On this point however, you should note that college alliances are fluid. They reform every ten years or so when schools find better partners.

Greg puts too much faith in salary floors as a device to ensure effort. They don't work empirically, nor should they work theoretically. Salary floors are simply the result of strategies in collective bargaining. Owners give the union a floor in exchange for getting a cap. But this has not kept the football Cardinals & basketball Warriors from stinking for a decade. This should not be surprising -- salary floors are a fixed cost, and have little impact on the marginal incentive to try hard (note: it's not the players, but the organizations that lack incentive under current league rules).

Finally, Greg puts too much emphasis on the fans whose teams get the boot in an open system. That's a temporary problem; next season they can play their way back to the top. My principles place more emphasis on the people in cities who are denied the opportunity to watch a local pro team by an absolute barrier to entry, controlled by the monopoly league. Give them the opportunity, I say.