Written by: Elliott
One word strikes laughter into the heart of American Sports franchise owners everywhere: relegation. Why? Because the philosophical assumption behind the US sports-economic model, “the cash cow dividend,” is so firmly entrenched that relegation is a non-starter, a concept so foreign and remote it merits myrth, not serious discuss. And the fans suffer.
I have my own bias: I am from Kansas City, a Midwest town known to the coastal bullies as fly-over country. While US sports enthusiasts debate between salary caps and luxury taxes with the pretext of competitive equality, the reality is reduced labor costs and increased profits for owners. Ironically, the cost to us, the medium-sized city fan, is complacency.

But why? Why do we coddle ownership groups with public-private parks, a draft that rewards inadequacy, and no punishment for ineptitude? If you were paid for incompetence, would you work hard to become competent? If a player performs poorly, there are repercussions. Coaches have it ten times worse. But owners? A closed-door verbal barrage may await at the annual ownership retreat in La Vegas, in-between moist spinach-leaf massages.

Derivative investing hedge funds with their dream-inducing dividends wreaked havoc on financial markets, but of course we the ignorant investor played a part as well. Did we think when we cashed our checks? Did we stop to ask where the profit came from? Or where we too busy counting zeroes and rushing to the nearest liquor store and racetrack? Should we expect more of sports franchise owners? Should we expect more of ourselves?

Oh, and there one other element: promotion. For every risk, there is reward. If you could buy a second-division side and get a slice of a TV deal in two years time, would you roll the dice? Would promotion help to generate interest in the second-division sides? in turn, could that provide more opportunities to up-and-coming talent? Perchance.

Regardless of the effects, the practicalities, and the logistics, we have to ask ourselves just why we still allow Ronald Reagan to sleep in our bed. The salary cap and luxury taxes have had the perverse effect of creating profit by profligacy. And its getting tougher to stomach.
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November 11th, 2009 at 12:41 pm
[...] cap or end of relegation/promotion was on the European horizon. Yes, I have written a piece on this before. But relax – this addendum-improvement will have no ostrich [...]