Thursday, April 11, 2013

Sports Ethics: Create a Level Playing Field

The joy of playing and watching sports depends heavily upon real competition. Competition invokes risk of failure or success. True competition requires uncertainty. Uncertainty connects sports to real life that has no guarantees, no certainty. Competitive outcomes then depend upon effort, talent, focus, adversary's skill and luck. Leaders of sports have an obligation to keep real competition alive in sports—a level playing field

Stewards of sports such as governing bodies and commissioners must work hard to create a level playing field over time. A level playing field keeps the integrity of sports intact. Without it sports reduces to the pretend of wrestling, the corrupted outcomes of gambling or boredom. Like in life lack of a level playing field makes a sham of fairness and long term hope.

When players step onto the field, they should believe that they have a chance to compete and win. When fans commit to a team as a representative of their community and aspect of identity, they desire a chance for their team to compete and win.

A level playing field occurs over time. Each season several teams may be demonstrably better than others. When the better teams compete they will have a much higher probability to win. Players and fans want the chance to compete over time and for the best teams to change over time. Competition should breed diversity and surprise. Over time teams can organize talent, smarts, focus and intensity and become better.

Unless you are a Yankee fan, watching games where you know one team will always win is boring. Worse it takes the guts out of sport because players become tempted to go through the motions and the quality of play declines because teams stagnate when competitive pressures do not push invention.

All sports face the danger of the migration of talent and skill to money. The richest teams buy the best talent and dominate the sports year after year. This cycle of winning reinforces itself when the best players want to play for a winner rather than being stuck on perpetual losing teams.

Thinking of sports as a competitive market means that one team or group of teams morph into a monopoly or oligopoly. These competitive markets mean that certain teams are guaranteed to lose the majority of the games over time and have little chance of ever winning a championship. Freezing the competitive hierarchy ruins real competition, ruins interest in the sport and can sap the motivation of players who are doomed to play on teams that not only cannot win championships but seldom can even “make a game of it.”

Monopoly and oligopoly in sports sap quality because real competition pushes players to grow. Real competition pushes teams to innovate in training, tactics or strategy to get a competitive edge so teams invest in smarts as well as talent. All these dynamics are sapped when a monopoly or oligopoly controls competition.

In the last twenty years with the reluctant cooperation of unions and ultra-individualist owners, American professional sports have developed a series of devices to protect the possibility of level playing fields, if the teams are smart enough to use the leverage of the devices. These include:

1.   A draft system that permits the worst teams the year before to draft first in the talent pool.

2.  Salary caps in professional basketball, football and soccer. This cap limits the total expenditures by a team and requires that contracts be structured to maximize up front payments. It discourages stockpiling high priced talent because huge payouts to individuals like quarterbacks hurt the team’s ability to get strong supporting players.

3.  Baseball backed into a half ass solution that works despite itself with teams able to spend unlimited amounts but beyond a specified level teams pay very high luxury taxes that are commonly distributed.

4.  Most of the leagues now have strong minimum requirements of expenditure that ensures owners cannot simply milk teams as profit centers.

5.  Wider talent pools. This has developed by design in baseball, soccer and basketball with international scouting and signings. In football and basketballs it results from a deeper and earlier training pool where talented players are spotted and groomed from the age of 12.

6.  Expansion has diluted talent across teams where even with talent pool expansion the talent across vital positions such as pitcher or quarterback is diminished across many teams.

7.  Slotting salaries exist for first round draftees along with limited control periods. This minimizes the risk of teams to invest in untested rookies and increases money available for veterans. The rookies who succeed get their payoff when they reach end of control period and become free agents.

8.  Unlimited free agency permits players to gain serious salary increases at the height of their talent.
a.   More importantly from a level playing field, it means that teams can rebuild relatively fast if they have drafted well and have spot needs that free agents can address. Teams relying solely on free agency to build “the best team money can buy” have not fared so well. It turns out that the skill production of players becomes very unpredictable in late twenties and early thirties, so many free agency hires turn out to be economic mistakes.

9.  The leagues created larger playoffs and strategically used “wild card” teams to make the stakes of winning last longer and go deeper into the standings. This means a much higher percentage of teams are competitive for playoff status longer into the season. This has helped minimize the number of meaningless games.

Dave Cameron brilliantly analyzes baseball's competitive resurgence in these terms but adds several points.  “Institute testing for PEDS, lessoning the ability of high-revenue teams to buy inflated late-career production. Shepard in analytics that allow poorer teams to level the market for players values.” He concludes that this has transformed cultures of teams and fans who now believe they can compete and win creating a “virtuous cycle” of interest and achievement. 

He makes underappreciated points about PED limiting stockpiling of talent and the ability of “intelligence” to offset money.

These combined approaches have lead to a remarkable renaissance of competitive parity across leagues. While the balance is unstable, the proof lies in the interesting confluence that salaries are rising, most teams are making a profit or increasing in market valuation and multiple teams are winning championships while competitive surprises can and regularly do occur.

To stand up to legal scrutiny these restraints on trade in the interest of both profits and quality of competition require strong unions and commissioners. This means the settlements are voluntary contracts that the law can tolerate. Owners alone would conspire against players, illegally collude on salary but also permit the strong and rich to dominate and create permanent inequalities such as baseball.

To create a level playing field takes constant vigilance and work. Competition in limited domains can naturally devolve to dominance by wealth and inequality. Owners, on their own, would prefer this. It takes strong leaders such as commissioners to negotiate order on  the chaotic and individualistic owners as well as strong unions willing to protect the game to ensure economic rewards. Level playing field takes rules that permit long redistribution of talent and enable innovation and intelligence to be rewarded.

The commissioners have to work to  convince owners and players that protecting the quality of competition and game created a better “media product” as well as more fan interest. This permitted the leaders to align self-interest with game quality.

A level playing field invites players to compete with intensity and to devote effort to getting better because they have a chance to win and excel. A level playing field reinforces fan’s loyalty to their “home” teams by adding the thrill of enjoying winning and collectively partaking in the satisfaction of a team that ‘represents’ them. They can feel satisfaction in being connected to the excellence and achievement of the athletes as well as the delirium of for one brief second winning.