Why Do We Need to Save the Poor Billionaires?
Written by Bill   
Friday, 30 April 2010 09:00

I guess it's social problems week here on the blog.

Yesterday morning, Mike & Mike spent an awfully long time talking about the whole Dez Bryant-Jeff Ireland situation. And understandably so, I guess. It seemed from what I saw that just about everybody was appalled by the whole thing, but they made reference to a sentiment (and I'm not sure whether it actually came from their listeners or if they just made it up) that if a football team is considering investing so many millions of dollars in a kid, it has the right to ask him whatever questions it wants to.

Which is, of course, ridiculous, but it spurred Greenberg onto a rant about how badly the NFL needs a rookie salary cap. It was getting out of  hand, he said, that teams were having to spend tens of millions on kids who have never played a professional game in their lives. Keep them to a few million dollars (I can't remember the exact figures) for the first three years or so, and then, if they prove to be true superstars, then they make the big bucks.

That seems especially shortsighted to me when you're talking about football, where the average player's career lasts about three years, but of course this isn't a football site. I bring it up because you get a lot of the exact same attitude in baseball, something I wrote about last June with regard to the uproar over Steven Strasburg's rumored contract demands. How dare high school kids demand that much money? Let them prove something on the diamond first! We need hard slotting and a salary cap!

And, well, it's silly. No one forces MLB and NFL owners and GMs to spend millions of dollars on unproven amateurs. The idea one gets from listening to the likes of Greenberg talk about it is that these poor owners are forced into giving kids more than they deserve, and that the problem needs to be reined in to protect the teams from themselves.

Well, these are sophisticated corporations run at some level by experienced businesspeople (even the Royals!), and almost all owned by billionaires who have had lots and lots and lots of success at making investments and signing contracts. They wouldn't pay draftees (or any players) as much as they do if they weren't convinced that it made sense for them to do so. The assumption one should make is that the team has already made adjustments for the uncertainty about his future and what they don't know about his past, and the number they came up with reflects those things.

Meanwhile, on the other side, the elite amateur (American) baseball player is trapped--in a pleasant trap, as traps go, but it's a trap nonetheless. There are 30 top companies in his field, all of whom would love to have his services; but the draft means he can entertain offers from just one of them, and doesn't even get to choose which one. If that team decides not to give that player what he thinks he's worth, his only real alternative is to play independent ball for a year and hope that he stays healthy and that the next team who draws his number is feeling a little more generous or desperate.

So if you put a salary cap or other limit on that, you're basically tying both hands behind the player's back. He can't accept competing bids for his services, and he can't even attempt to get the most that the one team who can bid on him is willing to offer.

The usual answer is something like "yeah, but who cares? We're talking about 18 and 22 year old kids who are going to be millionaires. So they get one or two million instead of fifteen million. Big deal." And, well, okay, but think about what you're actually doing. It's not like that extra $13 million goes to solve world hunger or something. You're artificially changing the rules of the bargaining environment, and you're changing them in favor of the big, sophisticated, successful, already-advantaged businessperson (and it's not like they'll thank you by lowering ticket prices). I have nothing against the owners or teams and don't begrudge them their money, but they definitely don't need any more special favors in this whole process.

If a draftee (in baseball, and I can't think of a reason football would be any different) gets himself a huge contract or signing bonus, it's because at least one team thinks his services are "worth" that amount. Or even more than that, probably, since the team didn't have to compete against anybody to come up with that numbers. Without some compelling reason, I don't think we should be straying any farther from letting players get paid what the industry decides they're worth. Keeping the money in the teams'  or owners' pockets and the sense that kids just shouldn't be getting that much cash without having to "prove it" just don't seem to me like compelling reasons.



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