Friday, July 02, 2004

[Sports] Slate- The Capitalism of Soccer:

When you look at the business of professional sports—in both Europe and the United States—American sports are virtually all socialistic while the European soccer leagues more closely resemble the entrepreneurial capitalism we Americans fetishize ... Every year, the worst-performing teams—three in England, four in Italy—check out. Relegated, they must play the following year in the next-lower division. Meanwhile, ambitious upstarts who have succeeded at lower levels check in. They are promoted.
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By contrast, the American professional leagues are like a Marriott Residence Inn—once you're allowed to check in, you never have to leave. There's no great punishment for consistently propping up the standings year after year. Yes, the market value of losing teams often suffers in comparison to those of winning teams. But once you're a member of the cartel, there's a floor under the price.
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To different degrees, Major League Baseball, the NFL, and the NBA are examples of European-style socialism among billionaires and Fortune 500 companies. They share revenues, tightly regulate admission to the cartel, and bargain collectively with powerful European-style unions, which act as barriers against reform. Losers not only can prosper, but they get first dibs on next year's crop of talent. In America, someone who wishes to start a major-league sports team, or who wants to upgrade a minor-league team into a major-league one, is essentially out of luck. Not so in Europe.
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The European system rewards ambition and ruthlessly punishes sloth and incompetence ... In Europe, the successful and rich teams grow richer. (For assembling and stockpiling talent, the New York Yankees have nothing on Spain's Real Madrid.) The poor get poorer, some teams fail entirely, and those intent on self-improvement have an opportunity every year to rise above circumstances.