Comments on economics, mystery fiction, drama, and art.

Monday, March 28, 2005

A Single Owner for an Entire Sports League

On the "Business of Baseball" listserv, Gary Gillette posed the question of whether, prior to MLB owning the Montreal Expos/Washington Nationals, a sports league had owned one or more of the teams in the league. I don't think he was asking about a league organized on the basis of a sole owner of all the teams in the league, rather about a league composed mostly of independently owned teams, but with one or more under the control of the league. Which is to say, sort of under the control of the teams with which the league-owned teams compete.

But the question of a league that owns all the teams came up. Such structures do exist. MLS and the WNBA are, I think, in that category, as is the CBA. The recent buyout offer for the NHL would, if accepted, add the NHL to the list. The question about single-ownership leagues became, in essence, "Why not?" Here's what I had to say:

Essentially, with a single-ownership league, the integrity of the competition is open to serious question. Roster moves are not undertaken by independent actors, both of whom believe (perhaps wrongly) that the trade benefits them both, but by a single actor whose motive might be to strengthen one team at the expense of another. This apparently happened when, in the late 1800s, Pittsburgh and Louisville had the same ownership; Louisville was stripped of talent, all of which wound up in Pittsburgh. (Something similar happened earlier, I think, in St. Louis.)

The long-term consequence of combined ownership is the dissipation of fan interest (or fan interest being confined to people for whom honest outcomes matter less than the theater of the event--think WWF) and collapse.


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