A Free Market Solution (from Europe) to the Labor Problems in North American Sports

The following is a guest post by David Berri, a Professor of Economics at Southern Utah University. He is also the lead author of Stumbling on Wins, the general manager of the sports-economics blog Wages of Wins, and is a frequent contributor to the Freakonomics blog.

Soon after presents are opened on Christmas morning, the NBA – after a lengthy lockout – will finally open its 2011-12 season with a slate of five games. Although NBA fans are pleased the lockout has ended, they’d probably prefer that it had never happened. Unfortunately for fans of pro sports in North America, such disputes frequently cause games to be missed. But maybe there is a free market solution to this problem to be found in, of all places, Europe.

Although we tend to think such disputes are a contest between labor and management, frequently the real conflict – as noted in my recent posts here — is between small and large market teams. In North American sports, team revenue seems to depend on the size of the market where the team plays. For example, according to Forbes.com, the New York Knicks had $226 million in revenues in 2009-10, while the Milwaukee Bucks brought in just $92 million. A similar story is seen in baseball, where the New York Yankees brought in $427 million in 2010, while the Pittsburgh Pirates had only $160 million in revenues.

Such revenue disparities often cause small market teams to demand more money. Ideally – from the owners’ perspective – this money comes from the players, which is what we saw happen in the NBA dispute, where the players just took a pay cut. In baseball, the players have historically been unwilling to accept wage cuts for small market teams. Consequently, baseball has transferred – via the luxury tax – money directly from large market teams to small market teams.

If we look to Europe, though, we might see a better approach. To understand it, let’s consider the arguments of Frederich Hayek, who argued that a centrally planned economy can’t work as well as a free market one because the central planner could never have enough information to make adequate decisions. OK, but what does this have to do with sports?

Essentially, North American sports leagues use central planners to determine the location of sports teams. In contrast, European sports leagues rely on the market.

For those unfamiliar with the nature of European sports leagues, let’s briefly describe the promotion and relegation system. In a league such as the English Premier League, the bottom three teams in each season are demoted to the Championship League (a lesser league). The top three teams from the Championship League are then promoted to the Premier League. Consequently, losers in the Premier League – as we see in a capitalistic market – are punished financially. And success in the Championship League is clearly rewarded.

By allowing teams to play their way into the league, any market can have a team. Consider the allocation of teams in the English Premier League today. Currently there are five different teams in the London area. This makes sense, since London is by far the biggest urban area in England. Of course, New York is the largest metropolitan area in the United States, and in each of the major North American sports leagues there are no more than two teams located in the Big Apple (a point I will return to in a moment).

In the English Premier League, though, there is no restriction on where the teams can be located. So we see three teams in the Birmingham area (second largest urban area), but Leeds (third largest in population) and Bristol (fifth largest in population) have zero teams. And the two teams leading the Premier League thus far this season are in Manchester (fourth largest in population).

A central planner would probably never have placed two teams in Manchester while skipping over Leeds and Bristol.

In contrast, North American sports leagues are planned. For a market to acquire a team, the existing owners must first agree to expand – or move an existing team. And then any new ownership group must be approved by those very same owners. 

The existing owners have insisted that the large markets be restricted (again, New York doesn’t have more than two teams in any of the major sports leagues). Consequently the league has moved into smaller markets. To make this work, the smaller markets are encouraged to assist the team via taxpayer subsidies for new arenas. Furthermore, if the team struggles, high draft picks and/or luxury tax dollars are transferred to the team in the name of creating parity.

All of this is done in an effort to ensure that all teams are profitable. Yes, failure in North American sports is simply not allowed by the central planners. Not surprisingly (and consistent with Hayek’s contention that central planning doesn’t work that well) chronic failures – like the L.A. Clippers and Pittsburgh Pirates – are not uncommon.

Once upon a time, the Pirates often contended for and won titles. But since 1992, the Pirates have always been losers. Their ineptitude, however, pales in comparison to the Clippers. Since the Clippers came to California in 1978, the team has had only three winning seasons. And one of these was the first season in San Diego in 1978-79.

Had the Pirates and Clippers played in something like the English Premier League, the Pirates would have been relegated in 1995.  And the Clippers would have been gone in 1981-82, sparing Los Angeles this team entirely.

In North America, though, despite years of failure, both teams have been consistently rewarded by their league. The Pirates – via luxury payments from teams like the Yankees – are actually profitable. And the Clippers have routinely been granted high draft choices and – via the intervention of Commissioner David Stern – were recently given the amazing talents of Chris Paul.

The chronic failures of the Pirates and Clippers suggest that the ownership of these teams are less than competent. And in a capitalistic system, incompetence leads to failure. But in North American sports leagues, when incompetence leads to shortfalls in revenue, the league turns to the players and demands wage cuts to compensate the losers. 

This in turn leads to labor disputes. It’s my opinion that all of this could be avoided if losing teams in North America were simply relegated and all markets opened to competition.

For example, let’s imagine that multiple basketball leagues were created in North America. Currently, beneath the NBA is the NBA Development League (which could be the Championship League equivalent). Beneath the NBADL, one could create another league. Any city or part of a city (i.e. Long Island in New York could have their own team) — could enter a team in a lower league. If that team was successful it could eventually join the NBA. And the teams that fail in the NBA would be removed.

Such an approach might end the small market vs. large market dispute because the advantages of the large markets — more specifically, the power to monopolize large cities — would end. And without this dispute, maybe the labor disputes that plague North American sports leagues could also end.

Of course, to implement this plan, North American sports leagues would have to end central planning and the desire of guaranteed profits. It is unlikely the owners of North American teams – who clearly profit from the current arrangement – would agree to such a move. In fact, it was reported a few months ago that North American owners would like to end the system of promotion and relegation in the leagues where these owners have invested in Europe.

If these owners were ever successful, then essentially American owners would be exporting central planning to a market-oriented industry in Europe.  And who would have guessed this would ever happen?

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  1. pd says:

    Not to mention the English Premier League teams from Wigan (population 81,000), Bolton (139,000), and Swansea (not in England!).

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  2. Mike B says:

    Promotion and Relegation are DISASTROUS ideas that if anything Europe needs to abandon as soon as possible. First it doesn’t even begin to bring the sort of parity that you seem to be clamoring for as, just like in North America (or even more so) success breeds success. Yes, instead of having geographic monopolies team must compete more for fans, at least at first. Soon network effects take over, the best teams get the most fans which allows them to consistently get the best revenue and buy the best talent and then close the cycles by having the best records. This can unbalance leagues even more than in North America.

    Second this required “learning curve” for teams in the Premier League has created a host of “elevator teams” which are too good for the lower level leagues, but not nearly good enough for the Premier league. They simply cycle between promotion and relegation while most of the premier teams stay entrenched in their position. Promotion and relegation also creates severe problems for the owners as lower level teams typically play in smaller arenas and have much lower overhead. Being promoted might means suddenly sees a huge jump in the overhead needed to compete effectively, but either not have the money to provide it or not have the fanbase (or arena) required to support it (or both). Again this exacerbates the elevator problem. Finally for an owner being relegated essentially means a near total loss of one’s investment. Fans won’t pay for lower levels of play, your games aren’t going to be featured on television any more and most importantly, your players probably aren’t going to want to play on in what is essentially a backwater league. For many teams relegation would be tantamount to the NCAA’s death penalty, ie a program ending event. Yes, if you don’t mind being an elevator team that effectively gets promoted into the role of Washington Generals for a season it wouldn’t be a big deal, but in the North American sports environment if a small market team fell out of the big leagues there’s a good chance it would never come back. Perhaps you should tell people that to fix this problem of uncertainty for the franchise owners the Promotion – Relegation leagues need to provide so called “Parachute payments” to the relegated teams so that they won’t just fold and go bankrupt.

    Those are just the business implications of relegation. From a fan’s perspective it is equally disastrous. Fans invest a lot in their teams and to have that team suddenly demoted to a minor league would effectively invalidate that investment. When you consider that fans not only buy all manner of branded items, but even pay out thousands of dollars for personal seat licenses (or wait years on a season ticket waiting list), relegation would completely wipe out that investment and we’re not even getting around to the emotional toll.

    In the North American system team don’t represent just arbitrary flags, they represent geographic regions and when teams play they write another chapter in an ongoing competition between distinct cultural groups. As you pointed out most of the Premier league teams are concentrated in the largest markets. Not only does this shut out large parts of the country from being represented, but forces people to pick teams that can endure and not get relegated (thus wasting their emotional investment), teams that probably don’t represent any specific culture, but more vague (and perhaps divisive) social and ethnic traits.

    While promotion and relegation systems may seem to be more open, they actually only serve to erect barriers to entry. It puts the importance on a team’s brand. Few fans will ever invest in a team that is only going to get relegated and no team can ever have a guaranteed market. The result is a mildly competitive oligopoly where a small number of core teams can ride roughshod over token opposition like major college football programs.

    The best part of the North American system is that it makes the entire region involved in the performance of the team. Good owners that field good teams will be rewarded with not only fans paying for their product, but also government subsidies. Even in small markets that don’t decide to compete the fans are still benefited by lower ticket prices and the fact they can see good teams when they come to town. The Baltimore Orioles have had something like 14 straight losing seasons, but I can get tickets there for as cheap as $1, while tickets for my hometown Phillies are ungodly expensive. If the O’s got good I wouldn’t be as interested in attending professional baseball games any more because the price would be too high.

    I support the pay to play system where teams that want a shot at the gold ring have to pay to get it. For some teams like the Yankees this is easy, but for small market teams the barriers are not insurmountable. The Green Bay, WI is the smallest market in the country to have a top tier professional team, but they not only do, but that team is one of the best in the league? Why? Because the team is municipally owned and the population of Wisconsin supports it. The problem with North American leagues is not that it is centrally planned, but that it is not planned/regulated enough. Sports teams should be treated like a public Utility. They are there for the benefit of the population they serve and in turn the served population only gets one team. The best thing that could happen is more municipal ownership like the case of Green Bay, but unfortunately most leagues prohibit it. promotion and Relegation will only wind up screwing the existing fanbase more and eventually force small market teams to root for large “naturally” branded teams that aren’t at risk of the “death penalty”.

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    • Mike B says:

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    • Eric says:

      “The best part of the North American system is that it makes the entire region involved in the performance of the team”

      Until someone comes up with a better stadium deal, then the team moves there instead, whether the fans like it or not.

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    • Dave_W says:

      Mike – I think this is about my third reply to you. I actually think that you make a number of reasonable points, I should say that, but a good number of your statements are well off the mark.

      “In the North American system team don’t represent just arbitrary flags, they represent geographic regions and when teams play they write another chapter in an ongoing competition between distinct cultural groups. As you pointed out most of the Premier league teams are concentrated in the largest markets. Not only does this shut out large parts of the country from being represented, but forces people to pick teams that can endure and not get relegated (thus wasting their emotional investment), teams that probably don’t represent any specific culture, but more vague (and perhaps divisive) social and ethnic traits.”

      This, to an outsider, is a bizarre claim. What happened to the geographic region and distinct cultural group represented by the Baltimore Colts? Or the original Cleveland Browns? The Oakland Raiders? The LA Raiders? The LA Rams? The St. Louis Cardinals? The Houston Oilers? NFL franchises (I don’t have the same knowledge of your other sports leagues, but I understand it goes on there too) look like pretty much the definition of “arbitrary flags”, moving around to capture the most market share and profitability.

      The promotion/relegation system means that, yes, sometimes you’ll have good times and sometimes you’ll have bad times – but you remain a fan of your team. Every time those teams play, they write another chapter in the history of competition between the same distinct cultural groups as when they were founded, not the distinct cultural groups that the owners have decided have more disposable income than the previous distinct cultural groups.

      And yes, I’m aware that there have been “franchise relocations” in English sports – but they’re few and far between. Teams move short distances across towns to play in new stadia, but in terms of moving areas there’s only recently the widely-derided move of Wimbledon to Milton Keynes in 2003. Before that, Arsenal’s move from South London to North London in 1913 is the only other one I can call to mind.

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  3. JennyB says:

    An additional free-market dimension for soccer in Europe is that the market for players is truly international – which is not really the case for basketball, baseball or (American) football.

    So within a country a team’s fortunes rise or fall depending on its performance, but with sufficient investment it can hire the best talent not only from its (within-league) competitors, but also from the rest of Europe’s (and indeed the world’s) top teams.

    As a result, more common than people (like Mike B) complaining about a lack of local fans, are moans about how few players in the UK premiership are British…

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    • Mike B says:

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      • Gary L. says:

        While players pay be coming from foreign countries in Baseball and Basketball, there really isn’t much competition for those players from professional leagues in their home countries. The NHL probably comes closest to having real competition from a foreign league. There’s a segment of players who could potentially play in the NHL, but choose to play in Eastern Europe’s KHL for more money. Some of those players are better suited to the KHL style of play (larger playing surface, so more speed, less hitting) while others prefer to play in or near their home countries.

        Jaromir Jagr, currently 40th in the NHL in points, spent the last 3 years earning a reported $5M per year playing in Russia. There were also reports this summer that Washington Capitals goaltender Semyon Varlamov was considering returning to Lokamotiv Yarlslavl of the KHL. Varlamov ultimately signed with the Colorado Avalanche after being traded by the Capitals. Had Varlamov returned to the KHL to play for Lokamotiv, he likely would have been among those tragically lost when Lokamotiv’s plane crashed on September 7, 2011.

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  4. vimspot says:

    Considering the success of the highly regulated NFL over the last 20 years, this is a strange argument

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    • Dpena says:

      Of the 50 highest valued sports franchises in the world, all 32 NFL teams are in the top 50. By 2013 the new NFL broadcasting deal will break all previous records. I think the NFL and their competitive balance know what they are doing, this is were the Premiere League lack.

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    • Fritz says:

      It is my understanding to compare the PL and the NFL is similar when you put the PL up next to the structure of La Liga and the NFL again MLB…PL and La Liga are similar with relegation but PL tends to share the wealth more and has more parity like the NFL (compared to MLB), thus the comparative strengths of the teams. So, many there may be more dimensions to this post but the focus was mainly on getting the best product in a free market way.

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  5. Alex K says:

    Interesting stuff. As an Englishman and English sports fan I would like to point to the failure of the English system.

    The English Premier League has a problem in so far as the same few clubs win the league each year. You can predict the top 3 or 4 teams before the season. This is because the successful are the richest. Success builds riches, and those riches determine future success by being able to acquire the best players.

    Manchester United have dominated the premiership interupted only by wealthy new team owners buying clubs and injecting money into those clubs. Examples being Chelsea and more recently Manchester City. Manchester United have a global fan base and revenue stream. It is now impossible to break into the top of the table after promotion to the premier league, unless you get a benefactor with deep pockets.

    This wasn’t the case before the formation of the premier league, when TV money used to be distributed to lower league teams. Prior to the premier league Notts Forrest rose from the lower leagues to the top and even won in Europe. A feat now impossible.

    As for the long term health of an uncompetitive league, English Football has larger revenues than ever before, but the wage bills are an unsustainable percent of revenue. The league is running on empty and nearly bust. The teams are financially in the red. The domestic fan base is ageing, with ever fewer younger fans and dependent on the exploitation of foreign markets for revenue growth.

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    • Mike B says:

      Of the 45 clubs to have competed since the inception of the Premier League in 1992, only four have won the title. QED

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      • Dave_W says:

        Right, but we’re not raised in a system where parity is taken as a given. Football fans in England celebrate more than just winning the Premier League, they celebrate any achievement above their expectations – and because there’s no enforced parity, their expectations are at wildly differing levels.

        Fans of Birmingham City are having one of the best seasons of their lives, because although they were relegated from the Premier League last year they also won a cup competition and this year are playing in European competition for the first time that the vast majority of their fans can remember. Tottenham, two seasons ago, celebrated finishing fourth (and thereby qualifying for the Champions League) as deliriously as any title-winning team I’ve seen. Teams that escape relegation on the last day of the season are delighted. Stoke City fans celebrate finishing mid-table in the Premier League each season, because their expectation is always that they’ll be fighting relegation. Derby County, during officially the worst ever campaign in the Premier League, celebrated scoring a consolation goal in a 4-1 loss away at Manchester United like it was the winner in the World Cup Final.

        In terms of utility, if that’s what you want to boil it down to, I’d say that the various sets of fans up and down the Premier League do much better than those in the NFL precisely because there’s no expectation of parity.

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      • Ricky says:

        Replying to Dave_W:

        In a way, this is similar to the way college football fans treat their expectations.

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      • Jimbo says:

        Agreed. A league with parity represents a much, much higher value for sports-budget dollar. For me, and a lot of people I know, the value of sport lies in the uncertainty of outcomes. A promotion-relegation scheme and other in-egalitarian systems of organization destroy a lot of the value of the core product. I think the management of the NFL is prime example of understanding core value, being flexible enough to adapt (Baltimore Colts, LA Raiders, etc…) but sticking to the gameplan of providing an attractive product to large demographic.

        Ultimately, the NFL is a national business that’s being managed at a national level, you subsidize some areas using profits from other areas in order to maximize the value of core product. If you do it right, you end up with more value across the system than you would if you excised under-performing teams and drastically lowered the number of geographic areas represented.

        It will be interesting to see over a several decade long span, whether the NFL or the English leagues turn out to be more profitable… You can guess where my money is…

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      • Mike B says:

        To Dave W don’t put forth Engligh fans’ coping mechanisms of participating in an ultimately unfair league as some sort of evidence that it is better. You think a Chicago Cubs fan would be happy if they won some AAA title? No…they want to be World Champions and nothing else will do even if it takes them 200 years to achieve it. That’s the sort of can-do attitude that makes a country great. When they do achieve it, and they will, they’ll know that it was earned and not some pitty pize. I’m from Philadelphia and let me tell you that we suffered the longest title drought of any city hosting teams in all 4 major sports at 100 seasons. We had all sorts of minor league and second tier sports titles, but we knew that they didn’t matter because we wanted the gold ring and when we got it in 2008 over 2 million people turned out for the party.

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  6. Dave_W says:

    I’m not sure I understand the thesis. There is certainly a contrast between the planned, broadly static structure of American sports and the promotion/relegation system used across Europe (and South America, and Asia, and Oceania, and Africa).

    Outside North America, performance on the pitch determines which teams are in the top league and which are in lower leagues. What I don’t understand is how that can be simplified to “the market”? Blackburn Rovers have been in the Premier League for the best part of 20 years (other than a one-season sojourn in the Championship in the late-90s) but their average crowd is considerably smaller than that of many teams in the Championship.

    By the same token, Leeds United have been paying the price for horrible mismanagement (mainly overreaching their resources in the mid-90s) in the second and even third tiers of English football for some time – but still have average attendances well in excess of those of most of the Premier League teams.

    Even if one accepts that a team’s spending correlates directly to their performance (and there are studies that show that this is likely the case, although teams do buck the trend) gate receipts and other income that depends entirely on the local market are such a small proportion of a club’s overall income that I don’t think the argument that a club’s takeup in the local market corresponds to its success can hold too much water.

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    • Ali says:

      To epnaxd a little, I would like to see the Champions League be an actual league, not a tournament. Qualification would work similar to how it works now, except every teams qualifying would be promoted out of their domestic leagues into the Champions League. This would allow lesser teams in the domestic leagues to have better opportunities to win silverware. Qualifying teams could still play in their domestic league’s tournaments. in the CL, every team would play every other home and away. I would also like to see a short playoff. Top 8 teams make the playoffs. Each playoff round is 1 game, so it would only add a maximum of 3 games onto the end of a season. It would give fans of the top 8 teams something to hope for throughout the entire season. I know there’s too much red tape and too much investment in the status quo for this to ever happen, but from a fan’s perspective, I think this would be ideal. Would love to hear any criticisms of or additions to this idea.

      [WORDPRESS HASHCASH] The poster sent us ‘0 which is not a hashcash value.

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      • Marcus G says:

        Champions league was created very much as a compromise. In that way the different FAs could stop the biggest clubs from creating a new league. You can also see from its development that it is very much about what the big clubs want.

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    • mc says:

      Oceania professional sports don’t usually have relegation. They either have US style organisation, or in the case of most cricket and to some extent in rugby union, teams which are fixed for all time.

      The VFL used to have ad hoc relegation from the VFA, and teams in lower leagues could join the NSL. But neither of those leagues exist today.

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  7. Gelvis Sequera says:

    Even when the promotion/relegation system should be good to establish a good minimum level, it doesn’t work for in favor of equality of the overall league. In europe, the English Premier league, The Italian Serie A and The Spanish First Division have big money problems on almost 75% of the teams, mainly because the free market structure thats raises the goods value (The players salary).

    There should be a point in the middle (I’m thinking on the NFL approach but with a more acceptable inscription rules and a ascension league where the rookies prove themselves to be as good as their paychecks)

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  8. Roline says:

    “is a free market solution to be found in, of all places, Europe.”

    This and the final paragraph would seem to indicate that the author thinks that Europe has some sort of command economy, like North Korea. I can assure him that we’ve had a free market here for some centuries now!

    I can also assure Mike B that a team’s support is very much tied to geography. Most areas have a team, and the locals support it. For a lucky few, this is a Premier League side, such as my own home-town team, Sunderland AFC, but small local clubs such as, say, Blyth Spartans or Bedlington Terriers have a devoted fan base. Fans of small clubs might follow one of the big teams second, but should they ever play each other (which can happen in knock-out cup competitions), there’s no doubt that loyalty to the home side would win ( plus the vast majority of neutrals would support the underdogs and hope the big team lost, but that’s another matter).

    As a fan of a club that’s bounced between divisions for years, I well know the heartbreak of relegation and the joy of promotion. You don’t know what you’re missing – all you have is stagnation, and stagnation is, ultimately, death.

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    • Mike B says:

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      • Roline says:

        “Why would you root for a team that doesn’t play in a league that matters?”

        That’s a hard one to explain as it’s an emotional thing, but people certainly do. I think it comes down to geography – the local club IS the town, and by supporting it, you’re supporting your town. People have very strong ties to their roots, and the local football club is part and parcel of that. Of course you want them to do well, but you follow them even when they don’t. It may not make sense, but you just do.

        And we do have hope – there is always the chance, however remote, that one day Accrington Stanley will reach the Premier League and all will be right with the world. With no promotion or relegation, you take that hope away and leave a town with nothing. I think that’s sad.

        You’re right about college sports, though – with the exception of the Oxford-Cambridge boat race with its inexplicable hold on the public imagination, college and school sport has no following whatsoever here.

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      • Mike B says:

        North Americans (yes, I’m including Canada) tend to get all their civic sporting pride from school related teams. In certain rural communities these sports can be more important than the professional leagues. Because non-professional school sports are so ubiquitous I think it definitely has crowded out lower level pro and semi-pro leagues. Minor league hockey and baseball are mostly subsidized by their Major League affiliates as developmental organizations. Because schools of all levels get all sorts of government funding, alumni donations and tax breaks there is no way a minor semi-pro league can compete.

        It will be interesting to see how things evolve once the NCAA’s grip on college sports is broken. I think the more developed programmes will split into semi-pro leagues affiliated with their acedemic owners.

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      • Hafsah M.A. says:

        “The same goes for college sports. There is nothing that says that Boise State can’t play for the National Championship as long as it goes undefeated”

        Negative, D1 College Football is ruled by the revenue generating, bowl busting cesspool known as the BCS

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      • Mike B says:

        They may be ruled by it, but if they were to blatantly exclude a number 1 ranked team from the Championship game it would completely destroy the BSC cabal then and there.

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      • Alex K says:

        Why would you root for a team that doesn’t play in a league that matters?

        All leagues matter. They exist because enough people care enough to set one up. A lower league matters just as much as a higher one. The presence of world class participants doesn’t add any greater meaning to it. The game either means something or it doesn’t.

        When you are a kid in a park with your mates and a ball, the game matters more than the world cup final.

        I root for Stockport County. They sit in the 5th league of English football. The team is poor beyond belief. Poor in money, poor in ability. I root for them because I was born in the town. You don’t get to pick your team, your team picks you. Usually in childhood.

        The name for people that choose to follow a successful team is “glory hunters”, though it’s okay if you’re Dad used to take you as a kid. Glory hunters are considered a lower form of fandom in the UK.

        Promotion and relegation as a system ought to ensure the game is fair. New teams recently set up by fans are Wimbledon AFC and FC United. They start at the bottom league, but every year they can rise and do. These 2 clubs will shortly be challenging the professional leagues (officially the 1st 4, but the 5th league is more or less fully professional)

        The basic failure is when the top league cuts its self off. Although promotion and relegation still exist the top league has cut itself off by retaining the TV money. The clubs that go up to the 1st league are favourite to go back down again.

        It’s only a matter of time before the top 4 in the UK join up with the top 4 of Spain, Italy, Germany & France for a Euroleague. The premier league isn’t alone in Europe in not really being a competition.

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      • Mike B says:

        North American developmental (minor) leagues are set up not to mean anything. Players on those teams aren’t actually playing for those teams. They are playing for the top professional league teams that own their developmental franchise. These developmental teams literally cannot keep good talent because that talent will be drawn away by the “real” professional team that the developmental players ultimately hold a contract with.

        I truly believe that North American are not interested in a team that is playing for small potatoes in the base of some larger pyramid. If a team won’t get to even contend for a championship until it has spent a minimum number of seasons moving up the typical North American answer is “call me when they get there”. While in the UK the system created more clubs playing the same sport in a large hierarchy (possibly an extension of the traditional British class system), in the US the demand for sport resulted in the creation of new sports and new leagues where everyone involved is contenting for a real championship. For example in the 1980’s the upstart USFL gave small market teams the ability to win a real National championship in Spring Football and the league would have succeeded had it not been hijacked by Donald Trump.

        Nowhere in my experience is the difference between leagues more evident than in College sports. First you have the different divisions where division III is intended to be non-competitive from the standpoint of schools spending money to win or getting revenue from playing, and division 1 which is the opposite. Tickets are usually not sold, the atmosphere is laid back. People are there for the players playing, not necessarily for the outcome of the game. Move over to Division I and the intensity level goes through the roof. The gameplay is better, the fans are more involved, there is more fit and finish to the games, etc. I have been involved with two schools that have a mix of D-I and D-III sports and even with the same student body and same institutional structure the D-I games feel like they matter and have excitement and the D-III games are just like “whatever”. When a friend brings the same level of D-I fan intensity to the D-III events at his school he gets yelled at!

        Over the last two years in North American D-I football there has been massive conference re-alignment as strong teams from weak conferences (equivalent to English football leagues) are jumping to stronger conferences because those strong conferences can get more TV money because they offer a better product and teams people care to watch. You can’t build a cable network around a conference with only a couple popular teams therefore the teams themselves are forming all-star conferences. Each individual team outside a major conference knows that it will never get anywhere being a big fish in a small pond.

        Anyway like I said it appears that the football Pyramid provides for the sort of local engagement that school sports provide in North America. However at the top professional level what people root for is very much chosen by the consumer. Relegating teams will cause fans to shift their loyalty elsewhere because they want the quality of service and excitement that comes with the top level teams. When it comes to association football there’s not much excitement to begin with so I guess not much can be lost as you move down the levels.

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      • Alex K says:

        Game attendances do fall off for some relegated teams. However those fans do not tend to go and support other teams.

        The origin of professional sport in the UK is more a reaction against a class system. The football clubs were founded by upper class gentlemen that wished to play the sports they enjoyed at school. The codification of the rules came about to enable clubs to play each other in a fair manner, rather than play to the rules of the “home” club. The inclusion of working class players involved accepting players who might otherwise be working on a saturday afternoon and thus required compensating for their loss of income. Thus the game became professional, and in effect a the game of the working classes who outnumbered all other participants.

        The league became a tool for working out the best team of a season, where every team plays each other. Promotion and relegation was adopted when the number of teams became too great to include in one league. A way of maintaining leagues of similar ability, rather than geographical proximity. The UK is a small island and travel from one end to the other no more than a few hours.

        The uncompetitive position the UK premier league is now is is similar to what occurs in most free market economies over time. Success breeds money and that money breeds success and positions become entrenched.

        Ivy League universities in America are full of the sons and daughters of the previous graduates of said universities who will maintain the wealth required to send their children. It may have been a land of opportunity once, but no longer.

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      • Mike B says:

        Do you know want to know a better way to determine the best teams when there becomes too many for all teams to play eachother? It’s called a best of 2^n tournament. That way you don’t need to wait a max-min of 24 years to earn a shot at the gold ring. Everybody gets a shot every year to go all the way.

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      • reservoirgod says:

        As Mike B illustrated, north american sports fans get the crap leagues they deserve.

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    • jimbo says:

      “all you have is stagnation, and stagnation is, ultimately, death.”

      Stagnation is neither death nor life. Sustainability is life, and if the long-term profitability of US leagues like the NFL is any indication, the English football leagues are much closer to the grave…

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