Upgrading The Sports Experience

 #397: Demo Pop Memo

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I've written before about the sport of baseball and how it has a pitcher injury problem.  This time I'm writing about the sport's ownership problem and making the case for demoing a populist makeover that would see fans owning teams they support.  This template could apply to other sports as well.

Though it's tempting to get into the weeds and give you all the background you need to understand the problem, I'll assume you know that:

* Some teams have three, even four times the payroll of others.  Sure, some teams can beat the odds and win despite tiny budgets, but generally most fail.

* Many teams are owned by scrooge-like billionaires who milk the team's profits while putting mediocre players on the field.

I've actually been cheering the absurd concentration of high-quality players on some teams, as this underscores how hopeless it is for fans of poorer outfits.  Hopefully, this'll cause a general reassessment.

First, the less revolutionary of the two solutions below:

The False Narrative of the Salary Cap

At the end of the current season players and owners are scheduled to enter into contract discussions.  It seems owners want a salary cap of sorts to hold down operating expenses; players are opposed.

Meanwhile, the current system is a mere tweak away from working.

Teams that spend over a certain amount on annual payroll are taxed a gradually rising percentage that is redistributed to the poorer teams.  Simply increasing that percentage and the number of thresholds involved would even out the playing field.  No need for a salary cap.

Of course the richest teams won't like this solution.  So, public figures should get behind the obvious answer and make the case that victory among equal teams is a lot more satisfying than otherwise.

The Billionaires 'Milking' Their Teams

Why do we have billionaire owners as middlemen?  Why aren't teams owned and directed by fans?  

In the case of the sole fan-owned major league franchise, the Green Bay Packers of the NFL, games have been sold out for many decades.  This, despite representing a fan-base in the immediate vicinity that's much smaller than those in major metros.  

So, the likelihood is that fans taking over ownership would likewise fill out attendance in their own stadiums.

Mathematically, a buy-out at fair market value would cost several billion dollars.  If shares were sold for $100 each, and represented one vote for members of a board of directors, plus perhaps non-binding advisory votes on team strategy, both in-season and during the off-season, how many fans would be needed to buy out a team valued at let's say $2.6 billion (the average for MLB teams)?

Well, if we allow individual fans to own a maximum 10,000 shares, and reward the extra shares with perks ('founders' special merch, for example), but not votes, and assume 10% of owners spend an average $10,000 while the other 90% spend the minimum, here's what 100,000 fans would raise: about $0.11 billion, so not anywhere near enough.  A rolling takeover that lasted perhaps ten years and involved increased revenue from ticket sales, merch, TV rights, etc., might do it.  At a conservatively estimated $25 a seat (less desirable locations) and 81 home games, with average under-used seats at approximately 25% in a 40,000-seat venue, the potential for added revenue over ten years at an average ballpark would be: $200,000,000 in ticket sales, plus merch and TV rights.  Probably not enough. 

Even a loan, paid back over ten years, with initial penny-pinching during that early period, would probably not be enough--especially in smaller markets.  What to do?  Probably raising the cap on shares owned per fan.  Maybe 20,000 max, as is the case with the Packers.  Allow a few thousand moneybags to pay for much of the purchase price.

To qualify as a buy-out, a grassroots effort would perhaps have to have buy-ins from a hundred thousand or so fans.  Perhaps the $100 share for each pledge would be refundable if the effort didn't reach a certain amount by a given date.

Almost certainly, legislation at the local level would be required, and possibly nationally as well, as a forced sale would probably need an eminent domain declaration, not to mention a publicity campaign to jumpstart the trend.  Hopefully, impacted owners would realize what was coming and be happy to accommodate fans.  

The politics involved, it should be noted, would likely redound to the proposing party, and could likely be used as a demo to highlight an emergent populism.