The Business Models of Sports Leagues

Most pro sports in the US are built around business models that make no market sense. They are quasi-monopolistic guilds classified as non-profits but run for profit.

The incumbent advantages and tribal fandom means they aren’t going anywhere soon. Still, there’s so much room for innovation, and I love thinking about changes to existing leagues, or brand new leagues, or even brand new sports.

The first thing I like to think about is more market mechanisms and fewer central plans. Price floors and ceilings and collective bargaining could get scrapped. The draft order being pre-ordained for losing teams could be scrapped. Imagine if draft picks had a true open market, and rookie contracts too. Teams would be forced to choose whether to keep a player or sign a new one. Picks would be weighed against free agents equally, with no bargain deals for new draft picks. This would be great for sports fans and media, because we’d get to have endless debate about whether a guy coming out of college was really worth picking up at the same price as an aging star. Comparison is the cash crop of sports talk.

I think about college sports a lot too. They’re a total corrupt racket top to bottom, and the players get the rawest end of the deal. Not getting paid by the school is one thing, but being banned from accepting pay to do commercials or other off-field/court activity while the college forces you to shill for their fundraisers? Sheesh. More talent will and should opt out of this high risk low reward charade if they have an alternate way to develop skills and transition to the pros.

Obviously, competing with college by creating a minor league is an uphill slog. Few things run deeper than college fan loyalty. I’d love to see some enterprising university sell their sports team. Split if off. Privatize it. Let it run as an independent business, paying the players, negotiating TV deals, etc. Let them keep the records, tradition, history, and mascot. Let them play in the on-campus stadium. Let students get discounted admission, and pay the university some fee every year.

You could turn pre-pro sports into something far more rational. Pro teams and scouts could get involved without scandal. Shoe deals could be made. Players could be traded. Players would do so much better for themselves, and fans would get to keep the same loyalties and colors and rivalries. Colleges would lose their stranglehold of control over the team, it is true. But they’d get great PR, avoid dirtiness of dealing with scandal, exploitation, fake-passing athletes in classes, coaches high salaries making professors envious, etc.

That’s just scratching the surface. I have a whole mental folder of ideas for leagues and sports, including some far-future ideas about gravity-free environments and what kind of sport works best with an extra degree of movement freedom.

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Looking to The State for Justice

Discussion of the immigration question has been misdirected and pushed onto polluted soil in part by certain intellectuals who have focused their discussion on how an imaginary, completely privatized world would or should operate. Because this is not the world in which we live — and, indeed, is probably impossible to create in any event — these intellectuals have made the fatal move of supposing that pending the advent of the completely privatized world, one may legitimately treat the national government as the agent of the people now residing within the area ruled by that government and, further, suppose that the government’s keeping would-be migrants out of the country corresponds to what an ordinary private-property owner does when he obstructs trespassers or ejects any who have already trespassed on his property.

This move is even more far-fetched than the conceptualization of a completely privatized world. First, the current residents of the county, whether they be net tax payers or not, are not the owners of the country as a whole in any defensible sense. These alleged “owners” enjoy none of the attributes of true owners: the rights to control the property, accrue any income it yields, and transfer their rights in mutually acceptable sales and gifts. Second, the existing residents have widely differing views in regard to how they wish the migrants to be treated. Third, viewing the government as the faithful agent of the existing residents is preposterous. It comes much closer to the truth to suppose that the government is their most dangerous enemy, the one with the power, resources, and intention to override their rights and plunder them almost at will.

In short, supporting government border agents in the real world can in no way be justified as equivalent what private security people do for a home-owners’ association. In the real world, where the government pours billions of dollars into supporting vast legions of armed border agents, one must choose: shall I back the state or shall I back Pedro and Maria as they attempt to cross the state’s border — itself, of course, the product of previous conquest and plunder? Let us not allow our minds to be clouded by fantastical conceptualizations utterly without parallel in the real world. Looking to the state for justice is probably the worst species of error one can make. Whatever you do, don’t side with those who are violating your rights day and night, rather than with those who are attempting only to exercise their natural rights.

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Privatize Veterans Affairs

Former Secretary of Veteran Affairs David Shulkin was recently fired from his post. Supposedly Shulkin was fired due to scandals as well as his opposition to the privatization of the VA.

Mr. Shulkin wrote an op-ed in the NY times recently where he said,

I believe strongly in the mission of the Department of Veternas Affairs, and nothing about my political experience in Washington could ever change that. I also believe that maintaining a strong VA is an essential piece of the puzzle that is the United States’ national security system: We can only expect our sons and daughters to risk their lives and fight for our freedom if we can keep our promise to care for them when they return home broken, injured or traumatized. There is no excuse for not holding up our end of the bargain.

What a load of bunk!

This is an embarrassment that a man of that high office could have such limited knowledge. Later in the piece Shulkin states “As many of you know, I am a physician, not a politician.” No kidding! Mr. Shulkin has immense more knowledge than me in medicine but clearly knows nothing of economics, politics or even national defense. Good riddance, David.

Shulkin states a VA is an essential piece of the national security of the US. Perhaps if we stop sending young and full of life men and women to foreign countries, where they can’t tell the difference between civilian and enemy, where they end up taking innocent lives for some unknown end goal, we may have slightly less need for medical services back home.

Shulkin states that we can only expect our sons and daughters to risk lives when we promise to care for them when they return. Tell this to those who were conscripted into fighting in Vietnam. They were forced to fight regardless of the care situation back home.

Shulkin implies that by privatizing the VA we would fail to provide care for veterans when they return home. Does Shulkin have the slightest idea how either markets or charity works?

When Mr. Shulkin provided care in his physician practice, did he only do so because the government forced him to? Or did he maybe provide care because he made a living from providing value to his patients and he felt fulfilled in aiding his patients to recovery?

In his opposition to the privatization of the VA, Mr. Shulkin embodies some of the worst and most disheartening ignorance in politics.

Does Mr. Shulkin realize that veterans would love to choose regular hospitals for access to care because the VA is slow, ineffective and is constantly on the defensive from latest scandals.

Privatizing the VA is:

  1. The most moral thing to do
  2. Irrelevant for national security (though we could be more secure by not starting wars all over the world)
  3. An easy way to save the government money
  4. The best way to ensure veterans actually get high quality healthcare back home when in need.

Mr. Shulkin ought to be ashamed of himself.

I don’t have much hope for Trump actually privatizing the VA but he deserves credit for floating the idea and should be urged at every moment to follow through. I will be doing my best to convince him!

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Only the Rich

The government gives an excludable good away for free: roads, parks, education, medicine, whatever.  Then some economist advocates privatization of one of these freebies.  Technocrats may offer some technical objections to privatization.  Normal people, however, will respond with a disgusted rhetorical question: “So only the rich should have roads / parks / education / medicine / whatever?”

A straw man?  Not really?  As I’ve explained, a straw man is when you falsely attribute a silly argument to your opponents.  But “Only the rich…” is an argument the opponents of privatization routinely embrace.

But what exactly is so silly about the “only the rich” argument?

1. Some free government services would remain quite affordable after privatization.  These goods certainly wouldn’t “only be for the rich.”  This is especially clear if (a)  government subsidies are currently driving up prices or (b) privatization paves the way for broad-based tax cuts.

2. Suppose that after privatization, the formerly free goods become quite pricey.  The non-rich could still afford them by making their purchase a priority.  In the current regime, for example, boats are pretty expensive.  But many people of modest means still own boats because they make boat ownership a priority, sacrificing other goods and services to free up funds for the activity they intensely value.  Prioritizing is especially effective in the long-run because motivated people can and do save money to build up a nest-egg.

3. The market often offers expensive full-price products and affordable substitutes side-by-side.  In a free market, for example, driving during peak time would probably be very expensive.  But tolls earlier or later in the day would be far cheaper.

4. If they plan ahead, the non-rich can often afford extremely expensive products by buying insurance.  Even if the rates aren’t cheap, insurance is the classic way to transform devastating financial shocks into manageable financial burdens.

5. Where all else fails, the non-rich can turn to borrowing and charity.

Intelligent critics are likely to blame me for being overly literal.  Of course “Only the rich will have X” is hyperbole.  But it’s a poetic way to lament the inequities of the market mechanism.  But I say the intelligent critics are interpreting populist rhetoric far too charitably.

If literally true, the hyperbolic arguments would be powerful objections to privatization.  If privatization will genuinely deprive all non-rich people of all medicine, we probably shouldn’t privatize.  But if the worst you can say about privatization is, “Rich people will have more and better medicine,” the obvious retorts are: “Rich people already have more and better medicine,” followed by “That’s the whole point of money – to get more and better stuff.”

In short, the “Only the rich” catchphrase isn’t merely a childish overstatement.  Like most political hyperbole, it’s effective because adults take it literally.  As I’ve said before:

Why are proponents of government action so prone to hyperbole?  Because it’s rhetorically effective, of course.  You need wild claims and flowery words to whip up public enthusiasm for government action.  Sober weighing of probability, cost, and benefit damns with faint praise – and fails to overcome public apathy.

What would it take to transform “only the rich” populism demagoguery into serious policy analysis? Simple: Critics of the market could argue that the marginal improvement in incentives isn’t worth the marginal costs of higher inequality.  Of course, once you frame the issue that way, it’s a short jump from critic to agnostic.

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Borderists Don’t Understand Property Rights, Part Infinity

Borderism in bloom.

In a fully privatized libertarian order there exists no such thing as a right to free immigration. Private property implies borders and the owner’s right to exclude at will. And ‘public property’ has borders as well. It is not unowned. It is the property of domestic taxpayers and most definitely not the property of foreigners. And while it is true that the State is a criminal organization and that to entrust it with the task of border control will inevitably result in numerous injustices to both domestic residents and foreigners, it is also true that the State does something also when it decides not to do anything about border control and that, under the present circumstances, doing nothing at all in this regard will lead to even more and much graver injustices, in particular to the domestic citizenry.” – Bionic Mosquito

First off, “immigration” is a lie used to justify bigger, more powerful government. Government to be aimed at those the borderists want to aim it at, but bigger, more powerful government, regardless.

What was that main theme again? “In a fully privatized libertarian order … ‘public property’ … is the property of domestic tax-payers…”

Ummm. No. Sorry.

In a “fully privatized libertarian order” there would be no “taxes” to be paid by anyone, “domestic” or “foreign”. If there were “public property”, it would be owned by a group which voluntarily agrees to pay for its purchase and upkeep and allows the public to use the property at its whim. Not financed through theft. Not really “public”.

And this has absolutely no bearing on the borderist argument, no matter how badly they wish it did. Borderism is anti-property rights, because they believe the State’s spurious claim on my property trumps mine.

The last 3/5 of the paragraph wobbles between admitting government “border control” is a bad deal for the slaves (and others), and seeking to justify it anyway.

This is just one example of where the borderists go wrong; the examples are seemingly endless. And frustrating. All calculated to reach the conclusion that “feels” pragmatic and cozy, while avoiding the truth.

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Very Different Kinds of Anarchists

If your vision of a stateless society involves ‘covenant communities,’ HOAs, lifetime employment contracts, private prisons, punitive executions, and “no shoes, no shirt, no service” signs enforced at gunpoint, we are not advocating the same thing.

I want to abolish the state because it is fundamentally based on imposing the preference of some people on others through force and violence. I want to live in a world in which individuals are free to do whatever they want so long as their actions don’t cause articulable harm to other people.

If your goal is simply to replace the tyranny of the state with a tyranny of privatized violence and overlapping contracts which violate the inalienability of the will, we’re very different kinds of anarchists.

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