NBA profits are not the result of “the market”

A few years ago it occurred to me that the absurd profits that flood the world of “marquee sports” are not the product of market forces so much as they are the product of ongoing, active distortion of market forces.

I happened to bury this minor epiphany in an offhand post speculating on Dwayne Wade’s work/life satisfaction, but since no one takes notice wherever I publish my work anyway, it seemed as well to just leave it there.

But, yesterday Vox saw fit to publish a work that basically dwells at length within this forest yet only sees the trees, so I suppose this is as good an occasion as any to raise my lone counterproposition to its own headline placement.

Briefly: Market distortions enrich the entire world of major league sports, on a fundamental level, to an extent that probably far exceeds the effect that smaller distortions have upon how the resultant “pie” is divided up.

Most of the windfall profits that accrue to major league sports depend upon government enforced intellectual property monopolies:

  • Without copyright monopolies, leagues could not command dizzying prices for broadcast rights.
  • The profit from official merchandise would vanish if the public’s justice system didn’t punish “unofficial” use of team names and logos.
  • Even sponsorship deals would lose considerable value if anyone could attach the name or likeness of the champ to their product, with or without a deal.

All of this is the product of ongoing choices by society to intervene in commerce, in ways that are highly favorable to LeBron James and Dan Gilbert alike.

Most of the above applies to the profits of “marquee” collegiate sports, too, where ongoing arguments over paying the players at all similarly distracts from e.g. the fact that the public’s government prevents the public from making free use of team and game content even when the team is part of a public institution. Nor does this even get into things like arena subsidies, or the major leagues’ special exemptions from such vestigial anti-monopoly rules as apply to the rest of the economy. But they certainly contribute to the same larger result.

That result being a thoroughly artificial fantasy economy, the internal workings of which even educated people spend countless hours examining, without ever seriously discussing its relationship to the larger economy around it.

This, as far as I am concerned, is wrong. It may be that a close examination of the choices involved and the tradeoffs that result would change nothing; it may be that the same choices would still find popular support.

But no one can say what choice people might make, so long as the entire existence of relevant choices avoids both popular and elite notice. It’s wrong that this continues, and it’s certainly wrong that this artificial fantasy economy continues to pass as the “natural” workings of market economics.

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