In this episode Kurt and Kevin talk about the monopoly of professional sports.
Listen to “Episode 66: The Monopoly of Professional Sports” on Spreaker.
Kurt: Well, Good day to you, and thanks for joining us here on another episode of Veracity Hill, where we are striving for truth on faith, politics, and society. Today is October 14, a Saturday here. We are finally back in our offices here at the Defenders Media office in downtown West Chicago. We have been on location the last two weeks. Two weeks ago we were at the Moody church attending a conference. We had a chance to interview Dr. Clay Jones on the problem of evil and suffering and last week we had a late invitation of sorts to interview Dr. Fuz Rana of Reasons to Believe and so we went over to Ginger Creek Community Church and talked to him there. I’m glad to be back in the saddle here, if you will, at the office for, what I hope is a regular episode, but it’s not regular in the sense that we’re going to be bringing you a heavy theological topic. Part of that is on purpose. I know we had been doing that more frequently, discussing deep apologetic and theological matters. Today’s episode’s a bit more lighthearted. We’re talking about sports, but not just talking about sports, like hey the quarterback did this, or I can’t believe the Cubs won the National League division series against the Nationals, not in that sense. What we’re going to be talking about today with my colleague Kevin, who’s back in studio for the first time in a while here. Thanks for coming. We’re going to be talking about how the industry of sports has become bedfellows with the government in a number of ways and in a sense, either legally or even just in terms of its market share, has a monopoly in the economy. We’re going to be getting into discussing topics related to that so if you want to participate we are livestreaming this. I will try my best to follow along with your comments here. If you are watching you might notice that it is just Kevin and myself, Chris is off this week, and so we’ve reverted back to some of our old technology. We’re using the Meevo camera here and we won’t have the overlays throughout the episode today and so if you miss that, if you’re someone that misses that, then let me tell you. You should support our ministry. We are doing a fundraiser right now. We are 22% of the way toward reaching our goal. Part of the money that we want to raise, and we’re trying to raise a total of $800 a month, and some of that money is going to go toward paying a producer, aka Chris, his nickname is Merlin because he works magic. He’s got this camera. He works the overlays. It really is just a great benefit to our ministry and so if you like having that high quality video production, I want to ask you to support our work whether it’s $10 or $20 a month, please help us to reach our goal so that way we can continue to bring to you a great production week after week. Nevertheless, he’s off this week and so we are reverting to some old technology here, but it’s good technology nonetheless, cause we’re still coming to you live. These are first world problems, Kevin.
Kevin: That’s right. We’re blessed by them.
Kurt: That’s right. That’s right. There’s that. Let me also say too, I am not making this the official announcement. On November 3-4, I request your presence to join us at the Compass Church in Bolingbrook where we are having the annual Defenders Conference and this year’s theme is 500, the Protestant Reformation, where I will be joined with a number of scholars such as Jerry Walls, my personal friend Richard Park. We also have Dr. James Payton, and a number of others, Cisco Cotto is a radio personality here in the Chicago area. He’ll be joining us and a couple others, and we’re going to be talking about themes and issues surrounding that momentous era. It’s not so much an event that it’s a singular thing. The Reformation is a period of time. Multiple events occurred within that short era. We’re going to be talking about those events, the ideas, and as I say informally, the good, the bad, and the ugly of the Protestant Reformation. We’ll be constructively looking at some of the shortcomings, some of the good things about it, and again, that’s November 3-4 at the Compass Church, Bolingbrook campus. I hope that you’ll join us. If you want more information and want to register, you can go to thedefendersconference.com, so that’s a website I’ve been working on all week Kevin.
Kevin: Yeah. Looks good.
Kurt: It’s finally up to snuff and so later this afternoon I will post that out on the Defenders Media social media outlets and the website as well. We’ve go three weeks to promote the event. If you are a fan of the show, please help us to spread the word about that event. We were a little bit late in securing a venue for a number of reasons, just a couple setbacks. It should be a great time. A lot of fun.
Kevin: I’m looking forward to it.
Kurt: Yeah, and hopefully we’ll get the opportunity to livestream at least the plenaries as well. We’ll see. We did that at the Deeper Roots conference back in September. Maybe we’ll get that chance as well for this event.
Kevin: Cool.
Kurt: So, I know there are a couple people that have submitted questions to the mail bag. We will be getting to those later today. But before we get to that, at the end of the show, Kevin. I want to talk about and I thank you for joining me today for discussing the monopoly of professional sports. Let me ask you, I’ve got sort of my reasons for thinking that professional sports has, as I said, either a legal or an informal monopoly. What do you see as maybe some of the indicators that there is a monopoly here?
Kevin: Let’s see. In terms of leagues, there’s really no competition. NFL, Major League Baseball. I don’t know. Then you have, for awhile they were non-profits cause they’re a passthrough, but NFL gave that up. I read that article you said about why they gave it up, which is interesting. That they can hide some of their financials and how much they’re paying other people and then they can’t also be berated for being a non-profit.
Kurt: Right. Because that looks bad from a marketing perpsective. A non-profit that’s a $2 billion a year industry.
Kevin: Right. Which is funny, but that is just one, it’s like a passthrough organization for all of the leagues. It kind of makes sense in their claiming that it didn’t really impact their bottom line that much, maybe $10 million a lot which is a lot but….
Kurt: Drop in the bucket for them.
Kevin: Exactly. So let’s see, then you have basically, it’s the teams controlling other teams and it’s just organization like that and it’s hard to break in, because they have contracts with cable and they have contracts with distribution and things like that, so you need a lot of momentum behind you to get up to that level. I guess those are the big indicators that come to my mind about it. Then you have education and how they recruit out of that. I read some articles you sent me about the corruption that goes on and the problem with not being able to pay players what they’re, the money that they’re worth pretty much. I think those are the big ones that come to mind in terms of the control that they have. What was interesting is one of the articles you sent me talked about a Major League Baseball Supreme Court decision that occurred in the 20’s I think, that basically said that they are not an interstate commerce. They don’t engage in interstate commerce. What’s ironic about that is at the same time, roughly the same time, you have like…[NP1] stuff like that, where just growing grain on your own property for your own consumption, they consider that to be interstate conference, but not Major Leauge Baseball…
Kurt: Sports teams travel. They cross the states.
Kevin: They do. Even if you don’t consider one individually, as an organization they certainly do cross it. You see this contradiction and I think the contradiction bothers me more than the monopoly status itself. I think that my overview is that I think that most natural monopolies serve a purpose and as long as the government doesn’t get involved, and we can get into the stadiums, there’s another big indicator, not so much a monopoly but just a buying government,,,basically corruption in terms of what the people who we elected locally in our cities are willing to do. They’re willing to use public funds, which obviously isn’t their funds. This is something that Milton Friedman…
Kurt: You’re going to talk about the four ways that he….
Kevin: Exactly. Right. But basically the key one, you can….
Kurt: Let me explain it here for those that aren’t familiar with it. Milton Friedman, who was a 20th century economist and he taught at the University of Chicago for many many years, he said that there are four ways you could spend your money. The most efficient way….
Kevin: Or spend money in general.
Kurt: Right. Spend money in general. The most efficient way to spend money is to spend it on yourself. Spending your money on yourself. That’s the most efficient way. I might not go have a steak meal for dinner. I might opt for KFC/Taco Bell.
Kevin: Exactly. You make compromise. You make tradeoffs.
Kurt: Because it’s your money. You want to save what you can. Another way you can spend money is when you spend someone else’s money on yourself. Let’s say your boss takes you to lunch and he or she says it’s my treat. So you think, okay, well I’m going to get a milkshake, and you wouldn’t normally have purchased that milkshake, but because someone else was willing to pay for it, you splurged.
Kevin: Like you hear people with expense accounts or something like that.
Kurt: But now you’re not going to go too crazy because you don’t want the boss to think poorly of you, if you go wild. The third way you can spend money which is equivalent to the second way in terms of efficiency would be to spend your money on someone else, like when you buy someone a gift. You’re willing to pay someone or to give someone something that is of more value than you would have paid for yourself. You might think here that you would be willing to buy someone a milkshake. Right? Now, the fourth camp here. This is when you spend someone else’s money on someone else. Okay? When you spend, essentially this is what government does. They tax people, they take that money, and they spend it on someone other than themselves. Sometimes they spend it on themselves. Let’s be honest, but in general the programs that they create are spending more on someone else. Spending someone else’s money on someone else and that is the least efficient way to spend money. You’re not as careful with it. You don’t care as much.
Kevin: Yeah. You don’t care really what they get because it’s their gift so you’re not going to be benefitting from it. You don’t really care how much you take because it’s not their money so….
Kurt: Right. So in this respect, as it pertains to professional sports, I think what we see in terms of stadiums are cushy plans from local governments to woo sports teams to their city and instead of these sports teams building the stadiums themselves which they can do. They have the money to do it.
Kevin: Or they could take out corporate bonds and the people who want to support them can.
Kurt: There are perfectly legitimate private ways to build stadiums. Nevertheless, of course in their interest, they want to save as much money as they can so if they can get a government to give them money, they’re going to try to do that. So we’ve got issues like in St. Louis, in Memphis, and recently Los Angeles, at least from the articles that we had read, these are all great examples of government using taxpayer dollars to woo people to their cities. Let me go into a couple of details here. In St. Louis, it was in the 1990’s I think, that the St. Louis Rams agreed to stick around because the city of St. Louis was going to give them so many hundreds of millions of dollars to build a stadium. So what does the city do? I forget the precise details, but they might take out bonds to pay for it or in Atlanta, they use a hotel tax that covers the NFL stadium there and so governments come up with their ways to fund these cushy plans to build stadiums. It puts a burden on the taxpayer of course, but what happens? Well, look what happened in St. Louis. St. Louis no longer has football team. St. Louis Rams have moved to Los Angeles and the city of St. Louis is still paying off that stadium.
Kevin: And if it was their own money they’d include something in the contract about them being locked in or something like that for years to come.
Kurt: Or having the Rams cover the cost of the stadium if they were to leave.
Kevin: Exactly, but because it’s not their money, these little things slip by and it’s not important.
Kurt: Either it slips by and they don’t care, or maybe they thought about that, but they thought they didn’t want to lock in the Rams. It’s like, why would you sign a pre-nuptial agreement. Right?
Kevin: Yeah.
Kurt: So, in that case though, that’s sort of the informal monopoly you might say where NFL teams are twisting the arms of local governments to give them money.
Kevin: I don’t know if I would consider that monopoly because you don’t have to have, if it wasn’t the government doing it, I would say that’s fine. You can do whatever you want with your own money to make that deal or not for an area, but I consider…
Kurt: I would call it a monpoly insofar as that they’re only one professional football league and insofar as St. Louis might want to have…it’s only a monopoly in that sense, but it’s true. There are other teams that might be interested to move to St. Louis, I mean, teams do move from city to city.
Kevin: Right.
Kurt: It does happen, but nevertheless, I think it’s still an issue when you only have twenty something or other something teams.
Kevin: It’s only an issue where you have corporatism where the government’s taking over responsibility for corporate interests…
Kurt: Yep. And then you get, I know in Miami, one of the issues was the Miami baseball field in the MLB. I forget the name of the park exactly. It’s a newish park, just the past couple of years. Taxpayers were on the hook for a lot of it. It’s like a billion dollar stadium. The problem though is when the team doesn’t do well and there’s low attendance.
Kevin: They can’t make back hardly anything.
Kurt: That’s right. It’s just, in a sense, it becomes a flop. It’s an investment that the government does and it fails.
Kevin: And this is money that they took from other people to get.
Kurt: Right. Good. I’m glad you brought that up, because ultimately, this is not about wealth creation.
Kevin: Even if it makes economic sense. Even if it was a good investment, they’re taking money from other people to do it.
Kurt: A number of the articles we read, I remember one article from PBS and I’ll be sure to provide some of the links to the articles that we read here on the web site if you’re listening to this now or after the fact and you want to check out what we’re basing our discussion upon, there was an article by PBS where the reporter had noted a number of economists had said this is going to be job creation either in the construction itself of the stadium or if you’re wooing a new team, you gotta pay the ushers and the concession stand. You got to pay people to work at the stadium so job creation which is good, however, when you tax people, you get their money, you’re just redistributing the wealth and so you really want people to have invested it privately from the get-go. That I think is one of the issues because we should not be so quick to think that if the government just takes money, throws it at a project that’s going to lead to more revenue, that’s not always the case.
Kevin: That’s hardly ever the case.
Kurt: Right. Hardly ever the case.
Kevin: Yes. Throw more money at education and performance hasn’t improved so…
Kurt: Yeah. If we look at all the industries where government has thrown more and more money over the past few decades, those are the more expensive fields. That’s why it’s been more expensive to put a kid in school, health care prices have gone up.
Kevin: Military spending is astronomical.
Kurt: Yeah. And when you look at the areas where the government hasn’t thrown money into an industry, what happens, in general? You see a decline in the cost to the consumer.
Kevin: Oh right. Yeah. When you have a free market.
Kurt: One of the best examples I like to use or smartphones or phones in general, cell phones. The government did not get involved. The government didn’t throw money at these companies. They did fine just on their own and there was competition and the companies got better at making phones that consumers wanted and so we went from the Zack Morris, Saved By The Bell, big huge phone, to now smartphone. For those of you watching here on livestream, you can see I am running the Mevo camera from my iPhone. That’s how smart phones are these days that they can even run cameras.
Kevin: Yes. Phenomenal.
Kurt: Pretty wild. But that’s what happens I think when the government doesn’t get involved. In the long run, there is a cheaper, more affordable product and it’s a better quality product. These are general rules I would say. When we look at professional sports, while ticket prices can be cheap, I think the government getting involved and picking winners and losers is bad for the taxpayer.
Kevin: Absolutely. Certainly on an individual basis. You can make an argument that lots of people in the city are sports fans and so they would go along with this, but even if you have a majority saying that, you’re basically taking money from the minority….
Kurt: The people that don’t want it.
Kevin: To the majority. Exactly.
Kurt: And of course, nothing is holding people back from saying, “Hey. Why don’t you chip in to this campaign to bring this stadium here?” Nothing is preventing people from privately organizing and saying we’re taking a collection. Let’s raise $500 million to pay for this.
Kevin: And if it’s a good economic investment, well then you should be able to sell the bonds for that and get the payoff whether that comes or not.
Kurt: One of the things, just so I don’t forget, I do want to get into talking about college sports and I do, maybe we’ll get to that after the break. I also want to talk about the fact that professional sports is an entertainment industry. It’s almost as if people don’t realize this and I think in terms of looking at a society at large, when we put so much emphasis and money into entertainment at the expense of other social projects, I think we should have caution there. As much as I am a diehard Cubs fan, I do not like spending $80 a ticket. That is too much for me, and now we’ve got a situation where players to play a game are requesting tens of millions of dollars to do what they do, and it’s just a game. It’s just a game. I think that’s a big problem in our society when we’re willing to say, “Hey. You can swing a bat and hit a ball out of the park? Let me pay you $60 million over five years”, and yet the President of the United States makes less than that, so in terms of job importance. Now mind you, what I’m not calling for here is regulation. I’m not saying….
Kevin: That’s coming close to it though. What are you saying?
Kurt: What I’m saying is that the market can dictate.
Kevin: Okay. So $80 a game might be good if they’re filling the seats and people pay that. Right?
Kurt: But what I’m suggesting is is that consumers can request cheaper prices…
Kevin: How would they do that?
Kurt: They could stop showing up to the games.
Kevin: There you go! A AAA game. I go to the King County Cougars. It’s just as fun for me because they’re all pretty much at the same skill level, fascinating things happen, and I think the family atmosphere is a lot better, so if you’re interested in the game, there’s a lot of other outlets even for baseball or for other avenues even besides like college. That’s really cheap too.
Kurt: So another thing, you can still watch the game because they’re often televized. You don’t just have to go to the ballpark, which it is a different experience, it’s a fun experience to be able to watch professionals play the game. But you mentioned yeah, minor league teams. You could also involved in little league if you like the game and you want to see little kids, plus it’s a lot of fun to watch little kids.
Kevin: It’s a different experience, but it’s awesome. It’s a lot of fun.
Kurt: Why don’t we take a break here and when we come back I want to talk about college sports and I’m actually messaging right now with Tab Bamford and he is a big sports guru here in Chicago and we’ll get his thoughts on this. We will try to set that up here while we take this short break from our sponsors.
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Kurt: Thanks for sticking with us through that short break from our sponsors. We are trying to get a hold of Tab Bamford. He’s a sports guru and specialist here in Chicago. While we do that, why don’t I, I realized I could take the mailbag while we hopefully get set up with him and get that going, so I’m trying to multitask here, but nevertheless, I love to play this song.
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Kurt: I like the guy’s little, “Aaah” at the end. The first question that we have comes from David and David has a question here. I want to make sure that I’m phrasing it correctly, or I can paraphrase it. Basically, David has wondered here about the Angel of the Lord in the Old Testament, wondering if these are appearances of Jesus, if I’m remembering his question precisely and I can get that up just in case, so I will start to answer that question as best that I can. David, to your question, I think that we should be careful, I should say, maybe they are, but I think we should be careful in placing too much weight upon what I think is ultimately speculation. I don’t think there’s enough evidence for us to conclude that the Angel of the Lord as he appears in the Old Testament is the second person of the Trinity. I just don’t think we can go that far in saying that. Maybe it’s a nice little thought to think that maybe it is, but I don’t think we can really have a reliable belief that it is, so here’s his question. He writes, “I recently read this somewhere and was wondering if it agrees. In the Old Testament there are many references to the Angel of the Lord. Do you agree that this was an earlier manifestation of the Son of God before His permanent incarnation as after the birth of Christ there is no longer any more references that the Lord appeared as this manifestation again?” David again, thank you for your question. As I just said I think that would ultimately just be speculation. I’m not an Old Testament scholar so if you can hear back from an Old Testament scholar on that, by all means, see what they say.
We do have another question and let me load it up here in the emails actually, if I can find it, because it was a very complex and yet important question on slavery and the early American states and their different approaches to that. Let me load it up here and it was from a listener who was listening back to one of our very earlier episodes. I think it was religious liberty. You know what? Maybe we’ll pause on that because we’ve got Tab Bamford here. He’s calling in and we’ll get him up here on the line.
Hey Tab. How are you doing?
Tab: I’m good. How are you?
Kurt: Good. Alright.
So we’re broadcasting live right now so I’m glad it looks you had a soccer
game cancelled?
Tab: Yeah. Thank you, rain.
Kurt: So for those that don’t know, Tab Bamford is a sports afficinado here in Chicago. You’re a big Black Hawks fan and you blog at, trying to remember at the top of my head. Chicago Daily Sports Tab. Is that right?
Tab: Yeah. There’s a whole bunch of stuff going on so I write for Chicago Now, the fourth period magazine…[NP2] manage stuff for Bleacher, part of the Big Ten Network. Lots of stuff going on.
Kurt: Lots of stuff going on. Thanks for joining us on the show today and we’re talking about the monopoly of professional sports. I’m not sure what your take is on that, but I did want to pick your brain on and it’s great that we’ve entered the second half of the show here. We wanted to talk about college sports. Could you introduce to us some of these recent scandals in sports? I know there was one at University of Louisville and why do you think these scandals go on? So tell us about that scandal and why do you think these things happen?
Tab: The scandal that led to Rick Pitino being placed on administrative leave which is a polite way of saying we’re legally going through due process to fire you and half of your coaching staff is significantly bigger than Louisville and really, there have been a few scandals. Yesterday the NCAA didn’t make a ruling on North Carolina after investigating them for seven years because players were taking fictitious classes. That’s a university problem that lots of different schools have found ways for athletes to aid their GPA by taking questionable courses over the years…
Kurt: Is that right?
Tab: Oh yeah. That’s a whole other discussion and that comes down to academic integrity. The Louisville issue could fundamentally shake amateur athletics to its core. First of all, it isn’t an NCAA investigation. This is an FBI investigation. When the FBI was investigating a number of universities, some of whom are finding out still that they’re under investigation, Louisville was the first big name player to be brought to the public awareness. The FBI has already been in contact with and my understanding is that they have formally charged the former director of, now former director of global marketing for Adidas and the cliff notes is it boils down to Adidas has been circumventing college sports to try and get future professional athletes to wear their stuff and become brand name ambassadors[NP3] and so back in the day, you’d hear about the $100 handshakes in locker rooms where boosters would come in and make sure you got a good meal after a game and things like that. This is more a case of Adidas wanting to get kids wearing their brand at a young age and so they’re accused of funneling hundreds of thousands of dollars through AU coaches, tournaments, boosters, friends of programs, at the high school level, and then using that influence to steer high school athletes to college programs that wear Adidas and then ultimately trying to use that influence to continue and say in the Louisville example, Rick Pitino turns kids into NBA players on an annual basis. If you go there, he’ll turn you into an NBA player in 12 or 24 months when you go pro, we’ll take care of you then legally. Literally, they were starting to incent players at the high school level where very few states have any kind of a care about the definition of pure amateurism and we’re looking to start funneling money to kids in high school and then using that influence to steer their college decisions. That could rip the lid off of amateur athletics as we know if more than Adidas is involved and as many universities as are potentially involved continues to grow.
Kurt: In terms of the spirit of the game, it certainly harms the spirit of the game of amateur sports, but do you think that there should be anything legally wrong with Adidas coming to a high school kid and saying “Hey. We’ll pay you to wear our shoe?”
Tab: That is a beautifully loaded question. That’s a ten-ton anvil. Lots of layers to pull back. I think legally, it’s hard to say, “No. You shouldn’t be able to get kids to wear your stuff.” It’s dirty in the current culture and in the current legal system of athletics. I’m not sure. There’s certainly, legally, there are money laundering issues so there’s all sorts of financial due process issues that are not I think germane to our conversation here. They were certainly breaking laws when it comes to money laundering and things like that, but your question is about the ethics behind paying high school kids to wear your stuff. I have always struggled with the idea of making anyone money and don’t[NP4] find a way to be compensated for what their true value is ,but my problem is that you can’t BS the system and play around the fringes and find loopholes or create lies to effectively make that happen because you can’t compromise a system and blow ethics out the door for the sake of doing something. There are due process channels by which you can make things happen. There are ways to sponsor teens and make sure the kids get gear that does not call into question their amateur status. I don’t think that you need to be giving fifteen year-old kids grandmothers hundreds of thousands of dollars and steering them towards specific universities. I think that they certainly crossed a line, but going to what I think the fundamental root of your question was, is it bad that elite athletes at any level could be compensated for being elite at what they’re doing? As someone who was not elite, but certainly played multiple sports in high school and ended up playing three years of football in college, it’s a massive undertaking and I don’t think that there’s any reason for athletes to not be compensated in some way, shape, or form.
Kurt: That brings me to another question. It seems that for a lot of people, collegiate athletes, they are supposed to be student-athletes. Right? They’re a student first and an athlete second.
Tab: Theoretically.
Kurt: Theoretically. Yeah. It seems that the way it’s turning out that they’re athlete-students and that college sports in its own sense is almost just become a league in its own right, a semi-professional league practically speaking.
Tab: Yeah, and this is the hard thing. When you look at the volume of kids that go play college football anywhere from the University of Alabama to North Central College or Wheaton College or Taylor University or Sisters of the Poor, whatever, you have hundreds of thousands of individuals that matriculate up to the college level and play football somewhere. Out of that, you end up with about 240 that’ll get drafted in some way, out of which maybe 130-150 will stick full-time in the NFL. That sticking at the professional level and this is just talking football, the average career life expectancy now is two and a half years and so you’re really looking at long-time viability of a career path to being a professional football player being like an infinitesimally small percentage. For most of these kids, and especially when you get to the larger programs, the division ones, the Michigans, the Florida States, the Alabamas, the kids are living on campus basically year-round and they’re cramming a lot of course work in. This is what a lot of folks don’t realize. They take course work over the summer so that the NCAA regulations that mandate you have specific grades and have completed a certain number of course hours are all met. Most of the time, the overwhelming majority of the time, football players are matriculating to the college level, and this is true of basketball as well, are getting to the college level and they are spending a fair amount of time truly being fifty-fifty student-athletes. There are off-season times that they are almost exclusively students, but in season because of the travel and the way that the game has grown, during the season when the lights are on these kids they’re viewed almost exclusively as athlete-students and not student-athletes, but there’s the other 6-7 months of the year that they’re predominantly a student. That’s when I said before that I believe athletes should be compensated in some way. I honestly believe that for 99.8% of these athletes, having a four-year college education, room and board, books, and cost of living paid for is a tremendous opportunity. If you’re on the swim team at the University of Michigan for four years and you’re out of state, that’s $250,000. None of your sociology major classmates or any major classmates are going to walk out of school and make $60,000 as a 22 year-old, 30 year-old for that matter. And so the idea that you’re going to get a $50-$60,000 a year education package paid for is plenty of compensation, but there are elite circumstances around some individuals that they make the university more money and have some brand prestige that I think they could probably make a little bit more. And those individuals, there’s more asked of those elite individuals, the Tim Tebows, the Johnny Manziels, the Jameis Winstons, the Marcus Mariotas of the world, the kids that are going to end up being a #1 draft pick, more is asked of them than most of the other kids on the roster. You don’t ask the third string point guard to go meet with the alumni after a game or booster event. The last guy on the bench isn’t paying for the new locker room, it’s the superstars and so that’s where the rub comes in.
Kurt: So here’s a question for you and this is something that I’ve thought. I know, and maybe you can help clarify for me since my knowledge of the sports infrastructure is going to be quite limited compared to yours. In baseball, you have a minor league system where kids either go to college or straight out of high school they become a professional athlete. It’s not a good living, but it’s a living to play baseball and to try to make it into the professionals. Then you have, basketball, you have the developmental league which is a relatively new thing. I remember it was started probably less than a decade ago. In football, there isn’t that sort of out-of-college league, so I’m wondering, at what point should we consider as a society, having a college-age semi-professional football league for these college kids that either really they don’t want to be in school, they just want to play football, and people want to watch them play football, or even when they’re out of college they want to keep playing and want to make a living out of it in this entertainment fueled society where people will pay money to watch that. At what point should we say, “Let’s do that.”?
Tab: Here’s the real rock in a hard place with that, is that if you’re going to have a professional football organization of any legitimacy that has people paying attention to it, meaning you’ve got more than 10,000 people in the seats. There are high schools in Texas that have 40,000 people show up on Friday nights.
Kurt: They’re getting more attendance than the Chargers in Los Angeles.
Tab: This is true. This is true. Rightfully so in many cases. The hard is that if you’re going to have a fully-manned roster of let’s say 50-70 individuals and you’re paying them anything, the cost of doing business is astronomical and back in the 80’s, the USFL was an attempt at a direct competitor to the National Football League.
Kurt: I didn’t know that.
Tab: And a lot of Hall of Famers played in the USFL and they threw a lot of money at guys to come and play in an alternate professional football league. Jim Kelly played there for a bunch of years. Reggie White played there for a few years. Herschel Walker went there for a few years. It was a massive undertaking and they were throwing big money and it was truly, when you look back at the history of professional sports, the ABA was a competitor to the NBA and you were competing for who could throw the most money at the most players and it was truly a competitive environment until you realized that the more was more successfully either built, their infrastructure was better, their leadership was better, but one was beating the other and the two ultimately decided that the merger was necessary. The same thing happened with hockey. The first big defection was Bobby Hull leaving the Chicago Blackhawks in the early 70’s when he got a million dollars a year to move to Winnipeg and start with the upstart Jets. All of the owners of the new league put money into a pot and one of the owners picked his name out of a hat to be the guy who actually got Bobby Hull, but the whole league played his salary because they wanted superstars. With the USFL you had one of the owners who ultimately like, his leadership ended effectively the USFL was Donald Trump and it’s because he wanted to go after the NFL and he actually won an antitrust lawsuit against the NFL, but the cost of the lawsuit effectively bankrupted the USFL. ESPN did a 30 for 30 on it which was tremendous. You should watch it. There have been other leagues that have tried to compete at the highest level, but I think at this point when you talk about a monopoly, I don’t think that we’re in an environment where another league couldn’t happen, but I think it’s just cost-prohibitive to do it, because you’re looking at stadiums that cost between $400-700 million to build. You’re talking about roster infrastructure from the players on the field to the personnel that put a game on to the organizational depth in any sport. It’s a billion-dollar proposition and if you’re going to spend a billion dollars, A) there aren’t that many people that will spend a billion dollars and B) if you’re going to do it and you’re going to buy a team like the Florida Panthers and move them to Seattle. You’re not going to start an entire league for yourself and pray to get a television deal from Fox Sports 12, right now it isn’t necessarily that there isn’t room for a second tier, but that we’ve created a Goliath in that all of the major sports networks are majorly committed to the sports that we have right now and the reason that ESPN is becoming unbearable to watch is because they are overcommitted to the NFL and the NBA from a…[NP5] perspective and that’s why that’s all that they ever talk about it and you’ve got to go elsewhere to find baseball or hockey and now you’ve got different regional networks and individual leagues having MLB network, NHL network, the media landscape is evolving to where a minor league system for football, in theory it could happen, but the cost of it, and then the other reality is that you’re just a medical in football, the ways that guys beat themselves up so much and really, there’s an age limit on when guys can come out for the National Football League which is three years post high school, but physically, I’ve probably only seen three or four guys in my lifetime that could have played a physical maturity standpoint come out and played in the NFL as an eighteen or nineteen year-old. Just the reality that it takes a lot of physical maturation, you need to be competing against the best to show that you’re the best and get yourself into a position where you can actually go out and play in the NFL and then the odds are still so long, the reality is that the NCAA is there to be a minor league for football and we just need to admit that that’s what it is at this point. Also understand that for again, 99.8% of the kids that are playing college football, they’re getting an education paid for and they’re having an opportunity to do a lot of incredible things that they wouldn’t possibly otherwise be able to do because of their athletic ability. They’ll never go pro.
Kurt: Yeah. I guess I would almost prefer a society in which these individuals are handed a paycheck and then they pay their expenses, their tuition, whatever, sort of keep it more clean in that respect.
Tab: One of the systems that I wouldn’t mind seeing, and which gets into a massive systemic question for all of higher education,but if you establish a minimum wage for collegiate employees, for me, there are kids that cannot afford to go to the University of Illinois or the University of Michigan or Iowa or whatever. They get in and they get some level of financial aid, but then they go in, they get a job working in the dining hall or working in the library or working as a research assistant. My brother is getting paid to be a TA and to do research right now working on his PhD at Colorado-Boulder. When you watch the 30 for 30 about the Fab Five at Michigan which Jalen Rose says is “The kid down the hall is working in the library and he can afford to go have pizza. I’m playing sixty hours of week at basketball and I can’t afford pizza, but life has changed there now. Now for the Big Five Conferences, they’ve added a cost of living stipended into the true cost of education which is part of the financial package that these athletes get. If you’re going to an ACC-SEC Big Tent Big Twelve…[NP6] school, you’re going to get a little bump in cash to pay for something like you’ve got to live off campus or something like that and usually there’s a little bit of flexibility there so that if you’re smart and you work out your housing work and things like that, there’s a little bit of scratch left over for you to have a decent dinner once in awhile, but going back to the idea of a minimum wage, if all of the students at the, let’s use, the University of Illinois that I have absolutely no understanding of their athletic culture or what exactly they pay their student workers or anything. I’m just using them as a university, if they decide that they’re going to have a minimum wage for students that are working on campus and let’s say it’s $14 an hour. The kid in the library is getting $14 an hour to pay for his tuition and the kid in the dining hall and the kid that’s doing research. If everybody is getting $14 an hour, have someone in the athletic programs fill out timesheets for the student-athletes and if they spend enough time truly committed to sporting relating activities and for me that’s defined as being at practice, watching film with a trainer, at a booster event, at an alumni event, at any university function in which they are being presented on behalf of the university, travel to and from road events, and being on the field of play or on the court, if the number of hours that those kids are putting on timesheets in a year adds up to greater than the cost of their tuition, write them a check. Pay them the difference. If you’re putting in enough hours at the same hourly rate that the kid in the dining hall is doing and you’re putting in, let’s say it’s $40,000 for you to go to school, but you’re putting in enough hours that you’re actually making 60, write them a check for the other 20, because guess what, the research is getting funded by somebody…[NP7] a check for your science building just like somebody’s writing you a check for your library just like somebody’s paying for food, there are people paying for your sports and these kids are putting their hours in and they should be compensated for it. What I think if you’re filling out timesheets you’ll find that they’re probably not over the course of a full year putting in enough that they’re going to get a whole lot on top of it, except again for those elite few that end up getting roped into all sorts of booster events and stuff in the offseason.
Kurt: Yeah. That’s interesting. We’ve only got a few more minutes here, but you’ve talked about how the NFL is kind of like a giant in the economy and it’s just so hard to even begin to compete. Doesn’t that, and this is more of a political angle to that, doesn’t that bring concerns about antitrust laws, that it’s just so big that one cannot compete? Isn’t that sort of at the very least an informal monopoly?
Tab: Yep.
Kurt: Yeah.
Tab: It is. There’s really no sugar coating it. The NFL is in every single way a monopoly. They’ve made Sunday their day of the week and they do whatever they please. They’ve tried to make Thursday night theirs. They’ve dabbled with the idea of making Friday night theirs. Late in the season when college gets done, they’ll start trying to make Saturday theirs and they’ve got Monday night to themselves as well. The NFL is absolutely a monopoly and the reason that no one will ever be able to touch that monopoly except for the player themselves is that it is too violent of a sport for anyone to truly come in and try knock them off. You didn’t have someone be like, “Don’t go watch the gladiators kill each over there. I’ve got a guy hitting himself with a stick over here.” It isn’t going to be as entertaining. The best will always matriculate off to the best. There’s more money there. the best players go there. But at the end of the day, the NFL will continue to be the alpha until a day comes that the best athletes are doing something else, and the problem is you’ve got some guys that are able to go play basketball instead of playing wide receiver, but historically you’ve got guys that go the other way too. Bobby Simmons could have played quarterback. He played in the NBA for six years. I played against him in high school. Terrific athlete. Antwaan Randle El was a point guard at Indiana for Bobby Knight. He played wide receiver in the NFL. There have been guys who have been good enough in one sport or another. Who’s got the most, I think he still has the most touchdown passes in the history of Virginia High School football? Allen Iverson.
Kurt: Is that right? Wow.
Tab: Yeah. He was an incredible quarterback. Lots of guys play football and basketball. It’s like this ridiculous marriage of two sports that you get roped into because they’re the ones that have the most sex appeal when you’re growing up, but truthfully, the only thing that will end football is people not playing it anymore and right now you’ve got a fascinating time for the NFL to look itself in the mirror because people are waking up to the fact that concussions are a real issue and the physical issues that people deal with, I played at Taylor University which is NAI. Half of our school is topped out of division three. I’ve got a bad shoulder, bad knee, and a bad back. It’s just what it is. I wouldn’t trade those years of playing football for anything, but I’ve got lingering issues from playing football and I wasn’t that good and I wasn’t getting hit by 280 pound men. It’s physically debilitating to people that choose to do it and that’s the key. They choose to do it. No one’s going to force you to play football hopefully, but if you choose to do it, you understand what the ramifications are, but people are choosing not to play football at the rate that they used to and now you have political issues off the field creeping into the NFL where the players who are in the game today don’t necessarily want to cowboy up and break bread with an ownership that has not listened to or been inclusive to the players ever and so now what you’re doing is you’re taking a sport that’s got the deck stacked against it because they are killing people and you’re making it something that people, historically have said, I’m almost 40 years old. I knew in high school that I was going to be a mess if I decided to play football in college. I knew if I hurt myself it would hurt for a long time. I knew what I was getting myself into. I still did it. People have known forever. It is a violent sport. Now science is telling us how violent is and the NFL continued in the wake of that to do business as usual because people kept playing football, because it was still the top dog, but now when you add the political element and the fact that there’s distrust of the billionaires that are controlling the purses on top of the fact that you’re killing people, people are turning the game off, so I think the NFL is really having a mid-life crisis right now in that they’ve got a lot of issues off of the field to deal with and deal with quickly because that’s a monopoly that could ultimately fall on its sword very very easily if they don’t watch it. We could be 25 or 30 years from the NFL not being there anymore. If you’d asked me five years ago that that was something I’d hear come out of my mouth I would laugh hysterically at you. I truly feel like they’re at a tipping point now[NP8] [NP9] …
Kurt: I think that’s right because I was reading some articles about the decrease in youth playing the sport and that there are football little leagues where they don’t have as many players for as many teams anymore.
Tab: There are high schools…[NP10] For colleges…Title IX stipulations…on the football field whether they have scholarships or not. It’s a massive undertaking because they have to balance it with senior athletes and health care and the time suck. The other thing that people don’t realize is that over the last ten years, there’s only been a handful, maybe eight or nine….at division 1 levels that have been profitable without a state subsidy…[NP11] You look at…and it’s not like the University of Tennessee and it’s not like the University of Florida. It’s like Ohio State, Michigan, Alabama, and that’s it. Everyone is hemorrhaging money because you don’t realize that if the University of Michigan makes ballparking five million dollars on football this year, it costs them 4.8 to 5.2 to put the season on and those are round numbers. Even with all of the money all of the people see flowing at these schools for football and basketball, you forget that it costs a buttload of money to put 120,000 in the seats every Saturday and staff an event and to fly 80 kids cross-country to participate in an event and to provide healthcare to the 120 kids on the field. The university pays for the ACL surgery when the point guard blows his knee out. It’s on their insurance bill. You don’t realize the massive cost of collegiate athletics…[NP12] It isn’t the money driver, but for a lot of schools, football, if everything is losing money that’s the one that’s losing you the most and it’s not offsetting the losses of anything else. You can come up with money to cover insurance for the swim team because those kids are in great shape and I’m probably the only person that ever got a concussion in a swim meet because I got my wisdom teeth pulled and I was doped up a little bit in the water. That was my fault, but there are other sports that it’s a lot easier to insure than football.
Kurt: The injuries are less often and yep.
Tab: And at the high school level, it’s the same thing. Football is a massively expensive sport, and when you’re growing up, hockey and football, the equipment’s expensive. If you’ve got kids that are growing out of it every six months. Shoulder pads are a couple $100 bucks. Shoes are a $100. Helmets are a $100 and you’re fitting a new one every six months. Again, football is having…
Kurt: A crisis.
Tab: A lot of things to reconsider into itself right now just because we’re realizing exactly the toll that it takes on your body to hit someone in the head all day.
Kurt: We’ve got a question here from Kevin who’s in the studio.
Kevin: Hi, Tab. This is Kevin.
Tab: Hey, Kevin.
Kevin: I was just wondering, do you see online broadcasting as becoming a disruptive technology for the broadcasting rights that make such a big difference to a lot of these leagues?
Tab: For the biggest leagues, no, but I think that it is absolutely forcing them to fit the script on what they consider to be broadcasting. There are different tiers of rights, being able to show something digitally online vs showing something on television is a completely different cost structure so if Facebook wants to run a deal with Major League Baseball to show an Astros/Marlins game on a Tuesday, that’s a lot cheaper than FS1 or ESPN doing it, so there’s a lot of dirty nitty-gritty on the larger tier television…[NP13] That being said digital broadcasting of games is opening the eyes to a lot of other sports which is part of why football has an issue. Kids can watch college lacrosse online now and that’s “Wow. Hockey and football had a lovechild and it’s really cool and fast. Let’s go do that.” You get to see lacrosse. You get to see college hockey. There are conferences with college hockey where the entire broadcast structure is only broadcast online. They don’t have a TV deal. There are fringe leagues that are broadcasting stuff exclusively through Twitter now. I think it’s opening up the range of sports options, both professional, major, minor, college, semi-pro, the buffet line for sports addicts is getting to be about thirteen miles long because of online broadcasting. It’s just going to continue to get longer as individual teams take ownership of their rights and they’re able to sell micropackagain around their individual brand vs the national.
Kurt: I like it.
Tab: It’s definitely going to open the floodgates at the regional levels and then at a lot of the smaller levels, but I think there’s so much money behind the big brands that unless somebody like Disney says, “I don’t think ESPN’s going to write another $500 million check for the NBA,” that you’ll see something truly move exclusively digital.
Kurt: Cool. Tab. We’ve got to come to a close for today’s show, but let me thank you for coming on and enlightening with all sorts of things. I didn’t even know that there was this USFL that tried to attempt and so there have been attempts and your knowledge of the different games is very beneficial for considering how it is that we can protect individuals and their rights and that maybe we should reconsider having the government give subsidies to all of this to continuing a game that people are losing interest in so thanks again for your thoughts today.
Tab: Absolutely. Talk to you soon.
Kurt: Have a good one. God bless.
Tab: You too.
Kevin: Bye bye.
Kurt: Alright. I thought that was really fascinating at the end. Great question, Kevin, because it’s a reminder that even to me when there’s a monopoly, people find a way, the market finds a way to begin to slowly hack away at the interest, and I don’t just mean like the desired interest, but I mean the financial interest in a monopoly.
Kevin: And it’s even about substitutable goods, because football isn’t the same as lacrosse obviously, but if you have a choice and you can just watch it online, maybe you’ll choose that. It serves a simlar purpose and there’s actually competition even if there isn’t within a particular league or something.
Kurt: Right. It just reminds me that even when there’s a giant, people pick away and nitpick at the toes of the giant until eventually people realize, “Oh. The government should stop supporting the giant. I think that would be the big step there. It’s not that the giant shouldn’t exist on its own, but perhaps the taxpayers are being burdened with continuing to support the giant when maybe the taxpayers shouldn’t support the giant. This is the entertainment industry after all. If we’re concerned about healthcare and education, I’d rather have the money go to healthcare and education even though I think government doing that sort of thing doesn’t help in the long run.
Kevin: That’s way down on the list on what you should take peoples’ money to spend….
Kurt: That’s right. I hope today’s episode has been something a little bit different for you. It’s not super theological or apologetic. It is political. We’re talking about economics, and maybe sort of the economic of sports isn’t something that you’ve considered before so I hope it’s been beneficial for you. I also want to thank Kevin for coming in and we talked there more in the first half, but then we were able to get Tab on.
Kevin: It worked out well.
Kurt: I knew his knowledge would definitely help us to understand some of the issues and moreso than I even realized. That does it for the show today. I am grateful for the continued support of our patrons. Those are folks that just give a couple bucks a month. Please consider becoming a patron and help us reach our fundraising goal. I’ve also grateful for the partnerships that we have with our sponsors, Defenders Media, Consult Kevin, The Sky Floor, Rethinking Hell, The Illinois Family Institute, Evolution 2.0, Fox Restoration, and Non-Profit Megaphone. I want to thank Kevin again for coming along and then also our second half guest, Tab Bamford, and finally, I want to thank you for listening in and for striving for truth on faith, politics, and society.
[NP1]Unclear at 9:00
[NP2]31:10 unclear
[NP3]33:55 check
[NP4]Check section. Paraphrased around 37:00
[NP5]48:40 unclear
[NP6]52:00 unclear
[NP7]54:15 glitches out
[NP9]1:00:55 Kurt talks over Tab and Tab breaks out.
[NP10]Breaks 1:01:15
[NP11]Go over whole paragraph
[NP12]Unclear 1:03:05
[NP13]Unclear 1:05:30
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