Tuesday, April 21, 2009

What the market will bear --- Part 1

"What the market will bear"

This is the phrase that has been used, for at least the past couple of decades as far as I know, to justify unconscionable excess. It has been a favorite phrase used to justify why a CEO should take home roughly 400 times the compensation that the average worker does. And it has been a favorite phrase used to justify why someone with an above-average ability to throw, catch or hit a ball should make more money in one year than the average doctor does in twenty. “Hey, it’s what the market will bear!

So what they tell you every day, with this phrase, is that you the consumer has signed off on this excess. What they claim is that their particular skill is so valuable and so rare, and so necessary or important (or at least so much in demand) that they deserve to retire in luxury for a few years (if that) worth of ‘effort’. The excesses of the financial industry is now evident to most people, but I think that the obscene financial excess in big time sports is less evident to average person, even in this economy.

Anyway, who is ‘they’? This ‘they’ includes anyone who makes money off the system as it is. As it pertains to sports, the ‘they’ includes, of course, the owners and the players who make incredibly large amounts of money. But it doesn’t stop there---the ‘they’ also includes other conflicted parties such as the ‘journalists’, ‘analysts’, sports talk idiots, broadcasters, telecasters etc . Basically, the ‘they’ includes anyone who talks about, writes about, broadcasts or telecasts (and makes insane amounts of money from you because of) big time sports. And finally, the ‘they’ also includes millions of idiots who like to think of themselves as ‘true loyal fans’ and who therefore walk around mindlessly parroting the shit that they absorb from the mainstream media (such as ‘It’s what the market will bear’), without pausing to consider that they are actually only rationalizing their own exploitation. Yes, this whole thing is a lot like big time politics.

So what they tell you is that this whole thing is driven by you and your need to consume what they alone can produce. And this pisses me off because (i) It is true and (ii) It is only partly true, i.e. there is a part of this sports economy that John and Jane Q Public are directly responsible for driving, but there is an even larger part of this obscene economy that is allegedly driven by the Publics but over which the Publics have little meaningful control in reality.

The discussion about money in sports comes up regularly over the airwaves in the form of questions like “Do (pick a big sport) players make too much money?” or “In this economy does it look bad that Itchy McBallscratcher is being paid 25 million dollars a year?” And since the discussion is led and carried by our beloved conflicted ‘they’, it will never end up raising key questions or issues. For instance, people spend weeks discussing whether ballplayers should make more or less than the owners or who deserves what share of this obscenely large pie. But they never substantively address the issue of why, in a country where 50% of families are living 2 paychecks away from financial disaster-- where schools are woefully underfunded and so many already underpaid schoolteachers spend their own money for classroom supplies — and I could go on but you get the idea--- do two sports leagues (the NFL and MLB) alone manage to rake in about 11 billion dollars a year?

So my point is not about the raw numbers involved, as in X team or player makes Y million dollars; rather my point is to examine how and why X is making increasing millions of dollars at a time when the average American is making effectively less and less. My point is to examine whether it is really necessary that a major league minimum salary needs to be what an average American makes in a decade or more. My point is about balance. We show where we are as a society by what we choose to patronize and to what extent, in the context of the state of the common human of the times. When you take a good look at the sports economy it seems to provide yet more evidence (like we needed it huh?) that we are a society firmly in decadent decline.

The discussion should be about whether, not just in these economic times but at any time, we can afford to spend so much on professional sports, when it is coming at the cost of essentials such as education, healthcare, civic services etc. Sadly, far too many people aren’t even aware of how much of their money gets funneled into big time sports without their realizing it. And of course, far too many people don’t care. It is what the market will bear.

Consumption of big-time sports---it is the new opiate of the masses.

Coming up:

In Part 2 we’ll try and deconstruct some stupid ideas like “Support your local big-league team” and “Sure he makes $20 million a year but it is OK because his earning years are so limited”.

In Part 3 we take a good look at how a sports team can leech off a city in particular and the public in general. Yes, there are some cool numbers involved. We’ll see how, much like in the financial sector, big-time sport has its share of ‘welfare’ multimillionaires.

Update: What the market will bear-Part 2 is now up and available here.

Print this post


scribbler50 said...

Great post, Stache, especially the part where you point out how we the victims actually help this mess along (this self-mugging) by applying that phrase as if it makes it okay. Like we "get it" and it's cool. Unbelievable! And this will continue in sports until the fan finally puts down his foot and says "I can't take it anymore, bear this!!!. Little chance though, at least not for a while. Fans just think of it as the world we now live in and, like lemmings, continue to open their wallets and feed the perceived addiction that they have to follow their teams because they always have. And somehow they find the fucking money. This is the ugly side of capitalism, a system that in order to really work needs at some point to display (dare I say it) honor, fairness and respect. Not top-heavy fat cats sitting on top of the pyramid pissing down on the masses. Pissing down on the masses as long as the masses "can bear it".

I've been in a few arguments in my life over this very topic (not about sports) where I've said, "Isn't this price gouging?" and the anti to my argument too often applied that phrase. "No, no, it comes down ultimately to what the market will bear." And I wanted to go nuts. That's because what that catch-all rationale meant to me was... you can push the greed factor as far as you want, it's okay, and then, when it finally reaches the breaking point, when people can barely fucking breathe, they'll let you know. Kinda like getting someone in a headlock until he pounds the mat and says, "I give!!!" Then it's, "Okay, that's it, freeze the price right there or we're gonna lose this sap!"

And sadly, why does it have to come to that? Why push things to the breaking point, especially in these times? I'll tell you one thing, the Yankees are finding out real fast what the market will bear with their new ballpark. Even with their upscale crowd because there ain't much traffic heading to those $800.00 to $2,000.00 seats they're selling.

And (as you and I have discussed) wait til this week-end when the number one rookie in the NFL draft gets a thirty million dollar guaranteed contract. Before he even laces up his cleats! That's the tail wagging the dog in our faces!
Again, great post, Stache, I look forward to installment Two.

Anonymoustache said...

Thanks Scrib50, for the great comments. And as usual, I agree on practically every count.
As for the 'why'---lack of awareness and lack of concern amongst the general populace. I mean, about half the country voted for Bush. Twice. And then 47% voted for a ticket with Palin on it.
So I'm not surprised that people will gladly mug themselves.

Comrade PhysioProf said...

Dude, I think you are so totally fucking wrong on this one. Professional sports are one of them most economically sustainable and valuable assets we have in our society.

The reason why pro sports is still doing OK in this economy compared to many sectors is because it can still provide pleasure, enjoyment, and escape, and all you need is a teevee. So, pro sports is monetizing all those eyeballs that don't have to spend any marginal money to watch.

And if you want to talk about salaries, I think all those players totally deserve the salaries they get. There is a reason someone is willing to pay those salaries. This is the complete opposite to the Wall Street bonus situation, where "masters of the universe" would basically sell-out the medium- and long-term success of whatever the fuck entity they were responsible for in exchange for massive short-term gain and massive short-term personal compensation.

In pro sports, the incentives are not so short-term (one or two years).

Anonymoustache said...

Great job of parodying an AM talk show caller.

Dr. Jekyll and Mrs. Hyde said...

But....if A-Rod weren't getting paid all that money, how he could he ever find a way to get the really good steroids? See how important those high salaries are in maintaining performance? DUH.

And, as a native of a certain city that recently got not one but TWO new baseball stadia, I'm more than a little tired of the argument that the market is even involved. The teams and the city government are involved....and the bill is paid by....sigh.

Anyhow, I think the key point is that these salaries aren't about "what the market will bear"--they're about "how the sociopolitical system protects and encourages exorbitant salaries even in face of evidence [e.g. Billy Beane] that it is not necessary."

Anonymoustache said...

---"they're about "how the sociopolitical system protects and encourages exorbitant salaries...."---
That's the point I was trying to make overall---that the system is rigged such that the market will be forced to bear what it cannot and should not bear. But essentially, public ignorance and apathy is the underlying reason why these practices are not only prevalent but are in fact PR successes in most cases!
And I have some numbers about our local stadium boondoggle to share too--maybe I'll move that up to part2.

Anonymous said...
This comment has been removed by a blog administrator.
Anonymous said...
This comment has been removed by a blog administrator.
Anonymous said...
This comment has been removed by a blog administrator.
Anonymous said...
This comment has been removed by a blog administrator.
Anonymous said...

You may probably be very interested to know how one can make real money on investments.
There is no need to invest much at first.
You may commense to get income with a money that usually goes
for daily food, that's 20-100 dollars.
I have been participating in one project for several years,
and I'll be glad to let you know my secrets at my blog.

Please visit my pages and send me private message to get the info.

P.S. I earn 1000-2000 per day now.

http://theinvestblog.com [url=http://theinvestblog.com]Online Investment Blog[/url]

price per head service said...

I love the way the people here interact and shared their opinions too. I would love to track your future posts pertaining to the said topic we are able to read.