Wednesday, April 22, 2009

Is the NFL Draft really representative of American business values? the NFL Draft really representative of American business values?

April 22, 4:57 PM · Add a Comment
ShareThis Feed
You hear a lot of about how that President Barack Obama is a socialist, how he wants to share the wealth or how he wants to cap the salaries of say bank executives or automaker execs which is against all free market principles according to certain segments of the chatter society, but here is a question for those shrill voices and writers. How many of you will be celebrating this Saturday when National Football League Commissioner Roger Goodell steps to the podium at Radio City Music Hall over on 6th Avenue in midtown Manhattan, not far from Wall Street which is the heart of the capitalist society, and announces that the Detroit Lions are "on the clock" as Goodell kicks off the 2009 NFL Draft?

Probably a good many of them who are rooting that their favorite NFL team picks up some valuable new employees to help their team advance in the regular season and the playoffs.

You see the members of the radio and cable TV noise chamber and their followers who vehemently despise socialism and salary caps are cheering for the very thing they cannot stand. The National Football League has a cap on player salaries, practices something called "leaguethink" which is really socialism as the 32 owners share the wealth from TV and other revenue sources equally and the NFL Draft itself keeps most of the qualified applicants from shopping their services to the 32 NFL teams. There is no free market for the players ranked from #2 to about #230 in the pool of people qualified to work as a player in the National Football League. The draft also rewards failure; the best of the new employees end up with bad teams like William Clay Ford’s Detroit Lions. The poorly managed teams like Ford’s Lions which was winless in 16 games last year get a bailout, a potential great player.

The conservative columnist and TV pundit George Will is a baseball fan and a free market advocate until it comes to baseball and sports. A number of years ago when Will was a member of the Baseball Blue Ribbon Committee looking at ways of keeping all teams on a level financail playing field, he told me that baseball should and could not be subjected to free market principles. Will had been on the Board of Directors of the San Diego Padres and the Baltimore Orioles so he knew what he was talking about in the sports industry. Sports needs to be regulated by Congress and sports owners need a willing players association that allows what amounts to an illegal business practice. An annual draft of players which takes away an individual player's right to negotiate with multiple potential employers instead one just one.

Think of what the noise chamber would sound like if a college graduate in normal economic times was drafted by a company and sent to an area of the country far from home and was told this is the only job opportunity that you are allowed at a slotted salary. There would be huge cries of that is not fair. This is how it is with the NFL Draft. NFL fans are rooting for something that is against American principles. A legal restraint of trade. But it is only football and why should people care when these college grads, although most of them are not graduating, are offered millions of dollars to play a game?

George Will is, of course, a hypocrite. Free market proponents claim that people should let the market dictate the value of an employee or a business. An entry draft like this Saturday's NFL event is choreographed. Players are slotted into a pay scale based on where they are chosen in the draft. The players except for a very select few at the top of the draft cannot necessarily get their ideal job in their ideal part of the country. They cannot shop around their services and the owners are very happy about that because the players cannot initiate a bidding war between the owners, a good many of whom are free market supporters in their other businesses. It is all legal too under the United States labor laws which allow two parties in collective bargaining, in this case the owners and a willing players association, to cut a deal allowing the draft even though a third party, the draftees, lose the right to sell their services to 32 prospect employers.

The number 1 pick is the only player that has some leverage to chose his team like John Elway tried to do in 1983. Elway did not want to be taken by the Baltimore Colts with the first pick 26 years ago. Elway told Colts owner Robert Irsay not to bother and if Irsay choose him, he would continue his baseball career as a minor league player in George Steinbrenner's New York Yankees organization. Irsay took Elway but ended up trading him to Denver. Elway accepted Denver's offer.

Bo Jackson did not necessarily want to play for the Tampa Bay Buccaneers in 1986 even though Tampa Bay selected him as the top pick in the 1986 draft. Jackson decided to play baseball instead with the Kansas City Royals organization. He had leverage and used it. In 1987, Los Angeles Raiders owner Al Davis took Jackson in the seventh round and that started Jackson's dual baseball-football career.

In 2004, Eli Manning told San Diego Chargers officials not to bother drafting him. But San Diego worked the phones and found an attractive trade package and took Manning anyway. San Diego then sent the quarterback to the New York Giants which was fine with Manning. If Elway, Jackson or Manning were rated lower, they would not have had any leverage.

Potential NFL players coming out of college who are drafted have few choices if they want to make the NFL a career. They could sit out a year and hope they get drafted elsewhere, they can play in Canada or they can go home and find another line of work. Or they can sign a contract with the proposed United Football League and hope the league lasts. Oddly enough the undrafted players have some leverage as they can negotiate with multiple teams and perhaps get bonuses that are better than those drafted in the seventh and final round of annual NFL grab bag.

The NFL owners have a salary cap, which keeps players salaries from skyrocketing and on top of that, NFL players contracts are not guaranteed. A player who gets cut, a fancy word for being fired, keeps his bonus and gets a severance package. NFL owners share enormous national TV revenues although some bigger markets raise more capital than smaller markets because of how much the market will bear for tickets and marketing partnerships. That causes a divide between rich and poorer financed teams but that doesn't affect players as there is a salary cap and a salary floor in the league. Owners have to spend a minimum amount for players and that is a substantial number. The divide is in how much an owner spends on football staff and marketing.

The NFL Draft is now a slice of Americana. Countless hours of TV and radio shows are devoted to this event, numerous stories fill newspapers, blogs and magazines. This is a huge day for football fans and for those fans in the chattering society who decry socialism, spreading the wealth and salary caps. They hope their team gets better but overlook how the draft is so anti-free market capitalism. As the noted philosopher Don King once said. "Only in America."

No comments: