Hitting Sports Cheats in Their Wallets

A reader named Christopher Rumney writes in with an interesting idea for how to discourage illicit performance-enhancing drugs in pro sports. Perhaps something like this has already been proposed, but I’ve not heard of it, and it’s certainly an interesting idea — although any players’ union in its right mind would likely rather blow itself up than submit.

Remove 10 percent of an athlete’s salary and place it in an interest-bearing escrow account. If the athlete tests positive for steroids during his career, he loses out on all money paid into that account during his playing days. He would involuntarily make a large anonymous donation to a youth anti-steroid program. If he stays clean, or doesn’t get caught, he gets a large lump-sum payment when he retires — exactly the time when he is most likely thinking about long-term financial security.

I suppose that the reason athletes take steroids is to get a larger contract or extend their careers. This would create a nice balance between any potential rewards of steroid use and potential pitfalls of entering retirement without a nest egg.

Such a program would also increase the danger of taking a banned, but currently unrecognized, form of performance-enhancing drug. Excluding players from Hall of Fame consideration lacks teeth, and criminal prosecutions are over the top. Something in between is needed.


patrick

What if they pull a Favre?

Rebelle

"If he stays clean, or doesn't get caught..." is an unfortunate statement that speaks to the problem with steroid use and other unethical activities. This idea as an excellent one; it also gives those athletes using steroids incentive to continue doing so and find better ways to keep their shenanigans under wraps.

Mattk

"I suppose that the reason athletes take steroids is to get a larger contract or extend their careers."

I think you're off here. I suppose that big-leaguers are pursuing non-economic rewards--fame, glory, the satisfaction that comes from meeting peer/fan/manager expectations. Minor leaguers likely dope to make the bigs and gain economic rewards, but they wouldn't respond to your 10% solution in any case.

Scot B.

If it's that large, and that public, it wouldn't be anonymous.

And wouldn't it just drive salaries up 10%?

Doggie

Seems to me this would be like buying permission to use drugs. For a top earner, what's 10%? With product endorsements coming in from enhanced performance, the 10% loss would be minimal.

Tariq F

Nice idea, but if people feel that they need drugs to be competitive I'm not sure if 10% is enough penalty to refrain.

After all, the top salaries and endorsements arguably go to the few top medal winners whose names are widely known (Bolt, Phelps and on). If they felt that without the drugs their salaries would decrease by more than 10% (and in many cases it would) it would still be worth their while to cheat. After all, even the risk of a possible worst-case 90% of $100 is better than taking no drugs and getting a guaranteed 100% of $10.

But of course as you mention the player's unions etc would see no benefit from it and decline. For example a clean athlete will on one hand want this because it cleans up the sport and discourages those against whom he competes to cheat, but on the other hand it also involves a penalty on him in the form of slicing off 10% of his salary to be managed separately (and while long-term savings make financial sense people want to make that decision for themselves rather than cede control of their assets).

A much more interesting idea would be if the 10% penalized to those who were caught cheating were to accrue to a fund that pays eventual pensions/benefits to those athletes that stayed clean throughout their careers. That way, the clean athletes (who let's hopefully assume represent over 50%) have a strong and clear financial incentive to push this plan through since they put 10% into a pot but now expect to get more back with a handsome return - and all at the expense of cheaters.

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Andy

Definitely a great idea, and of course the union would block it.

The problem with this is it isn't painful enough on the player. I think it was Buster Olney on an ESPN blog that ran some numbers on Manny, pointing out his play for roughly 10 years now could all be PED enhanced and for that he's recieved roughly $120-150 million. What is a hallmark juicer worth without the stuff? Maybe $120million, but quite possibly only $30 million. Olney seemed most frustrated that by suspending Manny for 50 games and causing him to lose $8 million, akin to your plan here, any player considering cheating can look at these numbers and decide "it's worth it, even if i do get caught."

Those with the banned for life attitude, and not even for $ reasons, have it right I think.

Paul

I agree with 'doggie', if that is his real name. I dont see this as being severe enough of a negative reinforcement for the athlete to stay off the roids.

Lee

Well, one objection is that there is a very real chance that one could inadvertently breach the "steroids" policy. These policies often ban not only what are clearly "steroids," but also hormone/testosterone treatments and other allegedly performance enhancing drugs -- not to mention substances (i.e., diuretics?) that help mask the use of the PEDs. So, a doctor administers a medically appropriate treatment that contains a banned substance (or so-called masking agent), and the player loses millions? Same result if a player (who tend not to be rocket scientists to begin with) inadvertently takes a supplement with an off-limits additive? Too harsh. Way too harsh.

In the past, players who were caught cheating by using corked bats or nail files were punished, but nobody suggested lifetime bans from the game or the Hall of Fame, or losses of 10% of career salary earnings. Heck, some are thought of more as scamps than cheaters.

We really are in witch hunt territory here. I cannot wait until the list of 2003 PED users comes out. The sheer number will keep fans and commentators from going off the deep end.

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ScotterOtter

A 10% hit is chump change if a player doubles their salary by using steroids.

Axel Molotov

I think the economic disincentive not to cheat already exists. If an athlete gets caught, he typically gets suspended. The suspension results in missed games and other unmet clauses of the contract, which in turn mean less money for the player. Problem is marginal utility.

PragmaticCynic

What do you do with the "after the fact" users. A lot of the controversy in baseball right now is about players using a substance that wasn't banned when they were using it. As much as it was wrong, they weren't violating MLB rules.

A better strategy, any player caught using while active cannot have a contract greater than the minmum salary.

Any player found after they retire forfeits their pension.

Walter Wimberly

"or doesn't get caught"...how about the escrow being paid out over a few years with testing of stored samples assuming that new testing methods can capture some amount of previously undetectable substances. (It would also stop the "Brett Farve Effect".)

Unsympathetic

Mr. Rumney would be willing to manage that massive portfolio for free, right?

Otherwise, this proposal is nothing more than an attempt to skim management fees. Ironic, too: The reason owners and players alike looked the other way is because they were both making money.

This proposal is sound for nobody except the portfolio managers - not the owners, not the players, and definitely not the American public.

anon

I'm already distrustful of the cartel (in the technical / econ sense) of sports owners. If such a plan were implemented, the league could bring to the bargaining table the threat to ban an otherwise-innocuous substance in order to deprive players of income. With this system in place, the NFL could demand revenue concessions from players in exchange for not banning, say, protein powder -- it enhances athletic performance, after all, and is so common, no current player is going to get to keep his escrow money.

If you use a "banned at the time of ingestion" rule, then it's just like the MLB all over again.

N. Z.

Why doesn't training harder, using fancy technology, or getting Lasik count as "performance enhancement"?

I have a solution to the "steroid" problem: let athletes use them.

hixhix

Ridiculous. As if any Athlete would make a penny without dopeing. So sure, -10% is a great disincentive when the alternative is -100%.

Tubulus

Agree with ScotterOtter. If steroids can turn an average or above average player into to a superstar, the increase in salary will be MUCH more than 10% (at least in a major sport like baseball). In a less-popular sport, like track or cycling, the problem is even worse, since only a few of the very top athletes make a lot of money.

Dave

The current punishment is suspension without pay for 50 games, or nearly one third of a season. If the average MLB contract is 3 years or less, which I suspect it is, then a 50-game suspension amounts to a penalty of greater than 10% on average anyway. The money is effectively already in escrow, because it comes out of the team's coffers in the form of a regular paycheck throughout the season. Neither the player being suspended nor the league issuing the suspension have access to it. The only exception is when the violation occurs with less than 50 games remaining in a contract year.

The disincentive issue is not the problem--it's the rigor of testing programs, which translates to the likelihood of being caught.

There is one subtle incentive structure difference being proposed here however. Since the 10% in escrow would be donated to a charity (rather than kept by the team), that would give teams an added disincentive from signing players that are likely to be using PEDs. I don't think it's that significant though, because losing a Manny Ramirez-caliber slugger for 50 games is a pretty catastrophic personnel loss as is.

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Pete

This strikes me as similar to the "late parent" example from Freakonomics - would putting a price on it actually encourage athletes to do it, since now they know that as long as they pay X dollars, they can use steroids?