Paper 6: 12/04/2010

Market in SportsLabor Market of Commercial Clubs

Introduction Sport has undergone a major fundamental transformation from a leisure activity to a corporate industry. A market structure has emerged in sports characterized by a complex interrelationship between the audience, sportsmen, sport organizations, media and other stakeholders. The audience can be thought of as consumers who pay for the product called sports; the sportsmen can be thought of as rendering their labor to produce sports; the sporting organizations facilitate the production with the help of investments from sponsors, while the media distributes the products to the consumers. In this situation of an expanding market nature to sports, the most prominent phenomenon is the rise of commercial sporting organizations commonly called clubs and the resulting league structure of sports. A commercial sport club refers to an organization that manages a sport team in a corporate fashion (like a business) and is primarily driven by profit. A set of clubs in a particular sport, come together to form a league and compete against each other. Clubs incomes are derived from membership fees, sponsorship, winning tournaments, merchandizing and ticket sales. This paper will attempt to address, in particular, the moral implications of the resulting labor market between clubs and players. The assessment will take shape by arguing the pros and cons of each component of the labor marketwages, identity and motivation. It will then present my opinions regarding the sports labor market. The alternatives to this system of for-profit sporting organizations are, either government set-ups where the governments primary role is to develop sports is not to earn profits, or

community centered civic managed clubs, where the community comes together and contributes so as to have commonly shared sports facilities for recreation. Government machinery provides for official teams that represent states or the country. The Olympic games were supposed to be the highest form of competitive sports without any element of commercialization. Until the 1956 Winter Games, most players representing their countries were not paid. They participated purely for the pride of representing their country. Civic clubs are managed by the community, by sharing and volunteering time or money. For example, some of the community members may donate a rugby field, rugby balls and other equipment, some members may volunteer their time and coaching expertise, and together the entire community collectively shares the benefits of having the facilities to indulge in their love of rugby. Before we discuss the moral implications of the mentioned market in sports, it is important to identify what sport means, in order to comprehend the moral concerns at stake. Sport is human life in microcosm. Howard Cosell once said. Sports offer a reflection of society. The uncertainties, the trials of winning and losing, are all an important part of life. Sport in its own way shows what it is to be human in all its varied forms. Our society strongly believes in the notion that sports build character (Sage, 1990). Sport serves as a vehicle for learning team cooperation, fairness, loyalty, discipline, responsibility, and subordination for the greater good (Kleiber & Roberts, 1981). Any sport has universal rules that carry a message of equality. Sports provide moral instruction by means of making it enjoyable, easy to understand and setting examples. The idol of a sportsperson is the epitome of all the virtues of sportsmanship, disciplined with moral principles and at the peak of physical health. Youth and children are particularly benefitted by this moral influence of sports. Labor Market between Commercial Sport Organizations and Sportsmen

Wages The relationship between clubs and players can be seen as a labor market where clubs pay wages for sportspersons via a system of auctions and contracts. It is interesting to note that there is a division of labor and specialization not only between different sports but also within the same sport. For example in soccer, one person may be a goalkeeper while another is a striker, and the two perform very different tasks. The dissimilarities between a sports labor market and a conventional one, is that in a conventional setting, labor is more or less consistent, i.e. a factory worker would continue with the same level of productivity, whereas in a sports setting, sportsmens performance is rarely consistent (injuries, out-of-form, etc.) although their income remains relatively consistent. The advantages of the mentioned pay system for sportsmen are multifold. Auctions allow the attainment of an optimal state where clubs will spend exactly as much as they value a player. Players enjoy higher incomes as a result of the competitive structure of the auctions. Like any other market, the labor market in sports functions with a framework of contracts in place. This means that when a club wins a player in an auction, the player enters into a contract with a club. The contract system helps promote an important ideal of sportsloyalty to ones team. Without contracts in place, players would constantly defect to the clubs that offer better pay, thereby violating the spirit of sportsmanship. The huge monetary sums paid to sportsmen means that they may now devote all their time to the sport, without having to worry about sustaining themselves with other sources of income. The efficiency defense of the market is satisfied when sportsmen are compensated for playing the sport. Efficiency is achieved because the incentive of a higher income for a better performance and different grades of incomes for specialization in different will inevitably mean

that sportspersons try their best and reorganize into different positions in accordance with their skills, and therefore the team as a whole is at its productive best. Money as an incentive also increases the appeal of sports as a profession and thus those with talent, who may not have entered sports as a career for fear of not making a living, are now drawn in, raising the level of talent in the sport. The desert defense is met with some contradictions. Firstly, when a labor market is established, it is common to compare wages across different markets. We find that sportspersons in a club earn much more than surgeons or defense personnel. Does a soccer player deserve to be paid more than someone who saves others lives or risks his own life to protect the nation? Secondly, we observe that players are not paid solely based on their talent in the sport. Often, a sportsperson who is popular and has a wide fan base, earns more than one who may be more talented but may not be as popular. Can desert be extended to ones virtue of attracting the crowd? As is evident, a prominent moral flaw involved in this labor market is biasmore entertaining sports earn more. The biggest moral implication of this is on gender equality. Mens sports being more masculine and entertaining tend to attract more investment than womens sports and therefore male sportspersons are paid much higher than their female counterparts. This hampers the development of womens sports and female sportspersons. Whenever gender equality is violated, it is a moral violation. Another self-evident moral flaw relates to auctioning players. Is it moral to auction people as if they were commodities? This is an argument of corruption (Sandel, 1998). Corruption is the phenomenon of degrading inherent value of people, things, or activities, as a result of introducing market norms. Sandel offers an example of how paying a child to read

somehow degrades the whole purpose of reading, because reading is meant to be to gain knowledge and not to gain money. However, we might argue that the players had the freedom to enter into the auction as commodities. They were not coerced into it and are not adversely harmed by being auctioned. National Identity A distinct feature of commercial clubs as opposed to government or civic managed ones, is the need and ability to import talent from outside the area of the clubs functioning. This leads to an eclectic mix of talent from all around the country or all around the globe. Such a fusion of players ensures that there is plenty of scope for exposurejust as labor skills develop with introduction of new techniques, so do local sportsmen benefit from exposure to foreign techniques and styles of playing. The downside of the influx of players from other places is that when talent is so readily available outside of the community, clubs have little incentive to try and develop talent within the community. For example, a soccer club called Mohun Bagan in India has a massive majority of international players instead of reserving spaces for local players. Although local talent may be equal to its international counterpart, clubs prefer to take in popular players from other countries rather than bear the cost of searching for hidden talent within the community. The incentive of taking in international players especially arises from the need for an international fan following. This situation of playing in other regions or countries raises the question of morality, because it could hamper feelings of national integrity and pride. The case of the IPL offers compelling evidence in this regard. With the introduction of commercial clubs in cricket, there was a sudden drop in performance of the Indian national cricket team. On delving into the matter, it was explained as a result of lesser unity within the team. This was so because the IPL

was a league that pitted different regions against each other; and these regions drew from a number of players from the national team. As a result, rivalries that existed between different clubs or regions, transferred into rivalries between players on the national team. Another example where national integrity was at threat was when Pakistan strongly opposed any of its players from joining the ICL, another similar commercial cricket clubs league. Pakistan threatened its players with a life ban from playing cricket, and yet many players went ahead and joined the league, fully aware that they would never be eligible to play for their country again. In making the choice between ones country and money, commercial clubs made money more attractive. Therefore, it is certain that commercial clubs may be against national interest and may aid in harboring feelings of anti-nationalism. Motivation The motivation to play a sport is different in different cases. In government setups like state or national teams, the motivation is the pride of representing your country or region. In civic organizations, the motivation is to enjoy the sport and play for the love of it. But in commercial clubs, the motivation to win is heavily influenced by economic considerations. Clubs place an overemphasis on winning because the very existence of the club depends on how the players perform. If the club performs poorly, sponsors will withdraw and the net worth of the club is devalued until it can no longer sustain its operations. To a certain extent, this money-oriented attitude can help motivate sportsmen positively by bringing out the best in them as mentioned above in the Wages section. But after a point, this motivation could turn to unhealthy pressure. The overemphasis on winning gives birth to moral problems (Orlick, 1978). Over competitiveness turns to violent hostility, which in itself is deeply immoral. There is compelling evidence that a commercial environment where players compete with the idea of earning for

playing, turns them to ego-oriented people, characterized by measuring themselves relative to others, instead of relative to themselves and this leads to many immoral practices (Nicholls, 1989). The massive increase in the illegal use of performance enhancing drugs in competitive cycling can directly be attributed to the structural change of the sport towards commercial organization (Brewer, 2002). In essence, when money becomes the driving force, all other facets of sports take a back seatequating the act of taking part in a sport to the act of earning money. All other morals of sport are lost. The intrinsic value of the sport is degraded, which is again an extension of Sandels (1998) idea of corruption. When sports are identified solely with money, it gives rise to illegal practices like gambling, because gambling is seen as just another means of making money from sports. This gives birth to match-fixing and other methods of manipulating a sportsmans labor, and finally the sport no longer holds any meaning; sport has turned into a directed skit where each player is acting on behalf of gambling agents. Conclusions A labor market between clubs and players is accompanied by a plethora of moral concerns. But this does not mean that a market system is inappropriate in sports. Most moral issues like gender inequality, violence and malpractices are possible even in the absence of a labor market. Commercialization is an inevitable feature in the development of sports. Non-profits and the Government lack the resources to push for progress after a point is reached in the sports development. Commercial clubs fulfill this gap. We must also remember that any sport rewards those who triumphit could be a material reward or just the reward of satisfaction for emerging victorious. Even the ancient Olympics, which were supposed to be the purest form of sports, monetarily rewarded winners. In

such a scenario, is it not more moral to reward people on the basis of their participation rather than solely on the basis of their victory? I would think it is a moral virtue to promote participation rather than only promoting winning. The vital thing to remember however, is that markets can not be allowed to fully control the sport. There has to be a system in place to check market dominance, to ensure that the market is promoting the sport by upholding its values instead of hampering it.

Reference Brewer, B. D. (2002). Commercialization in professional cycling 1950-2001: Institutional transformations and the rationalization of" doping". Sociology of Sport Journal, 19(3), 276-301. Kleiber, D.A., & Roberts, G.C. (1981). The effects of sport experience in the development of social character: A preliminary investigation. Journal of Sport & Exercise Psychology, 3, 114- 122. Nicholls, J. G. (1989). The competitive ethos and democratic education. Cambridge: Harvard University Press. Orlick, T. (1978). Winning through cooperation: Competitive insanity, cooperative alternatives. Washington, DC: Acropolis Press Sage, G. (1990). Power and Ideology in American sport. A critical perspective. Champaign, IL: Human Kinetics Sandel, M. J. (2000). What money can't buy: The moral limits of markets. Tanner Lectures on Human Values, 21, 87-122.