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Goodell Pleads to Save Bureaucracy

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04/26/2011

In response to yesterday’s injunction, National Football Leader Praetor Commissioner Roger Goodell took the op-ed page of the Wall Street Journal — the people’s newspaper! — to complain that the ultimate result of all this nasty litigation will be a free market for NFL player services. And that would be bad:

In the union lawyers’ world, every player would enter the league as an unrestricted free agent, an independent contractor free to sell his services to any team. Every player would again become an unrestricted free agent each time his contract expired. And each team would be free to spend as much or as little as it wanted on player payroll or on an individual player’s compensation.

Wow. It sounds like NFL players want to be treated like workers in most other professions. Goodell wants to treat them like government schoolteachers, where salaries are fixed by a union contract and primarily reward seniority.

Goodell continues:

Under this vision, players and fans would have none of the protections or benefits that only a union (through a collective-bargaining agreement) can deliver. What are the potential ramifications for players, teams, and fans? Here are some examples:

No draft. “Why should there even be a draft?” said player agent Brian Ayrault. “Players should be able to choose who they work for. Markets should determine the value of all contracts. Competitive balance is a fallacy.”

Goodell never refutes this. He simply implies it’s nonsense. But Ayrault was right on the key point: “Competitive balance” is a fallacy, at least with respect to the impact of the rules Goodell advocates below.

No minimum team payroll. Some teams could have $200 million payrolls while others spend $50 million or less.

No minimum player salary. Many players could earn substantially less than today’s minimums.

This is the core fallacy. Goodell equates “competitive balance” with keeping every team’s payroll at or around the same level. But the NFL has fixed its payroll levels for years — and yet there’s still a clear disparity between good teams and bad teams. Yes, bad teams occassionally have good seasons, but that speaks to the real cause of the NFL’s apparent competitive balance: the short schedule. If Major League Baseball only played 16 regular season games a year, the higher payrolls of the Yankees and Red Sox wouldn’t be quite the advantage it is under the present 162-game schedule.

(Tellingly, the schedule is the one thing Goodell wanted to tamper with earlier in the labor negotiations, expanding the regular season to 18 games; that would do far more to reduce “competitive balance” than eliminating salary minimums.)

No standard guarantee to compensate players who suffer season- or career-ending injuries.Players would instead negotiate whatever compensation they could.

No league-wide agreements on benefits. The generous benefit programs now available to players throughout the league would become a matter of individual club choice and individual player negotiation.

No limits on free agency. Players and agents would team up to direct top players to a handful of elite teams. Other teams, perpetually out of the running for the playoffs, would serve essentially as farm teams for the elites.

No league-wide rule limiting the length of training camp or required off-season workout obligations. Each club would have its own policies.

No league-wide testing program for drugs of abuse or performance enhancing substances.Each club could have its own program—or not.

Over and over, Goodell repeats, with an obvious sneer, “each club would have its own policies” in the absence of a monopoly-union labor agreement. He argues that some players would end up worse off left to their own devices. How does he know? Until the league tries a decentralized labor system, it’s impossible to know who would be better or worse off.

Goodell ends with a flourish of economic illiteracy:

Is this the NFL that players want? A league where elite players attract enormous compensation and benefits while other players—those lacking the glamour and bargaining power of the stars—play for less money, fewer benefits and shorter careers than they have today? A league where the competitive ability of teams in smaller communities (Buffalo, New Orleans, Green Bay and others) is forever cast into doubt by blind adherence to free-market principles that favor teams in larger, better-situated markets?

Nobody ever accused the NFL — one of the largest recipients of government welfare via stadium subsidies — of “blind adherence to free-market principles,” and it’s obvious Goodell doesn’t even understand what those principles are. On the one hand, Goodell raises the antitrust problem: the league can’t maintain many of its current rules without the support of a union, because to do so would invite antitrust lawsuits like the one that led to yesterday’s injunction. Goodell seemingly endorses the notion that antitrust promotes free markets, but his league must be allowed to violate those principles in order to survive. That is yet another fallacy.

In truth, there’s nothing anti-free market about a group of private businesses adopting rules they believe will advance their economic self-interest. The problem here is that Goodell seems more intent on maintaining the league’s bureaucracy then adopting sensible business policies. Goodell is the chief bureaucrat, so his stance is understandable, albeit not laudable.

As I’ve argued before, much of the league’s spending on players is driven by the demands of the bureaucracy itself. This Thursday’s NFL Draft is a prime example. Eliminating the draft would likely reduce overall spending on rookies and discourage individual clubs from paying a premium for unproven talent. The Draft creates an IP-like artificial scarcity that restricts the ability of club managers to negotiate the most favorable terms with prospective employees. This has nothing to do with so-called competitive balance; the league maintains the Draft because of tradition — or inertia — and because it values the additional marketing exposure during its offseason.

But there’s an even more direct argument against Goodell’s “we can’t let the players be free agents” mantra: If a decentralized labor system is unacceptable when it comes to playing talent, why is it acceptable when it comes to managerial talent? After all, coaches, general managers, scouts, and all other non-player personnel aren’t subject to the rigors of a government-sponsored union contract. Teams are generally free to hire and promote managerial talent as they see fit. Yet we don’t hear any complaining from Goodell about out-of-control spending on general managers or offensive coordinators. Dan Snyder can hire five coaches in ten years — often at record salaries — but somehow it’s inconceivable that a backup right tackle could negotiate his own contract without strictly adhering to a 300 page labor agreement negotiated by a union he may never have consented to join.

And that’s really what Roger Goodell really cares about — that labor agreement. He values rules and regulations more than anything else. It’s what justified the existence of the commissioner’s office in the first place. Clearly, Goodell contributes nothing to the product of professional football; all the evidence of Goodell’s tenure suggests just the opposite. And as much as Goodell gripes about the players resorting to litigation over negotiation, the truth is that nobody benefits more from the government’s involvement in the NFL — be it through labor or antitrust law — as the “commissioner of the National Football League.” He holds a quasi-governmental title for a reason.

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