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Player Wages & Competitiveness

The Sports Law Blog points to an entertaining article by Joel Stein on the A-Rod trade. Stein: "The Yankees now have a slightly better lineup than the National League All-Star team, one of whose members will undoubtedly be the Yankees' second baseman by the play-offs."

People who are enamored with the ideal of equality might not think that funny. Understood, but then again, humorous types often find the truth where others do not: "If all the cities had the same amount of money, every year might be as exciting in a roll-of-the-dice way, but there would be no truth in it. America is a nation of vast economic, educational and ethnic disparities. The Yankees are the real America."

If you want sports to be a fantasy game where talent and advantage are handicapped, there is a way to do that. The NFL comes close. The economist Edward Gramlich, currently a member of the Federal Reserve Board, once wrote a scholarly paper contrasting the socialistic structure of the National Football League with the capitalistic structure of professional baseball.

I favor the latter, and here's one reason. If our favorite sports -- say the NBA -- gain increasing interest outside the U.S., salary caps and extensive revenue sharing will preclude our teams from competing with the best in the world.

Here is a concrete example. The U.S. will produce numerous soccer superstars in the future. But they will all go to Europe unless our clubs pay competitive wages. MLS rules are currently designed to limit player wages. Until that changes, MLS will be a business with a sensible plan, but a second rate league on the world stage.