Hard ball: the abuse of power in pro team sports

Hard Ball: The Abuse of Power in Pro Team Sports By James Quirk and Rodney Fort. Princeton, NJ: Princeton University Press, 1999. Pp. xi, 233. 22. 95. This engaging book is about the sickness plaguing professional sports in America. The diagnosis is a bad case of chronic monopoly. The four high-revenue men's professional team sports each currently operates with a single monopoly league. The source of monopoly differs among the leagues, however. Major League Baseball (MLB) was formed by a 1902 merger that predates the anti-merger section of the 1914 Clayton Act. In 1922, was exempted from antitrust coverage by the Supreme Court because baseball is not a business. The National Football League (NFL) is the product of a 1969 merger with the rival American Football League (AFL), which opened for business in 1960. At the NFL's request, the combination of rival football leagues was explicitly exempted from the Clayton Act by congressional action. The current National Basketball Association (NBA) and National Hockey League (NHL) are products of 1970s mergers between rival leagues-the NBA with surviving parts of the American Basketball Association and the NHL with a few survivors from the World Hockey Association. Neither merger was challenged by antitrust authorities. The result is entrenched monopoly leagues in all four major professional men's team sports today (and since 1999, also in women's professional basketball). The monopolies are more entrenched today than ever before. Since confronting rival leagues in the 1960s, the NFL, NBA, and NHL have recognized that restricting entry to support the scarcity value of franchises is not without risk. Over the past four decades, there has been sufficient expansion in all four sports to place a franchise in many (but, importantly, not all) cities that can financially support a team. Unlike in 1960, today no league leaves enough locations vacant to tempt an entirely new league. In addition to the shortage of locations sufficient for an entire league, a new league today would also have to figure out how to bid for top player talent against established teams that earn huge monopoly rents from the collective sale of television broadcast rights and receive large subsidies from local governments (in the form of playing facilities with concessionary leases). Because I agree wholeheartedly with the authors' diagnosis of what ails the sports industry, I want to praise this book and recommend it enthusiastically. I suspect the book would have been more persuasive if the authors had not only identified the symptoms of the disease plaguing professional team sports--exorbitant player salaries, the blackmailing of cities, and competitive imbalance-and diagnosed the ailment-monopoly power-but also had reported the long-term consequences of the disease. Is the disease fatal, and if so, to whom? Monopoly control of franchise expansion and team relocation causes both economic inefficiency and a redistribution of income. Monopoly contributes to exorbitant player salaries (increasing the marginal revenue component of marginal revenue product), provides credibility for threats to leave a city (or never locate there in the first place) if local residents do not pony up funds to build a revenue-maximizing facility and lease it to the team for a pittance, and leads to the skewed revenue potential that splits teams into haves and have-nots in terms of playing talent. At the heart of all three symptoms is exclusive terriories assigned to team owners. Quirk and Fort seem concerned primarily with the distributional consequences of the monopoly power, as it has been used to restrain league expansion, limit team relocations, raise ticket prices, and inhibit access to major league sports in America. A leisure activity that once was enjoyed by the lunch-pail crowd, more and more caters to those who favor crepes and Chardonnay. Ordinary folk are being priced out of live attendance at sporting events. …