2012-13 Lockout Discussion Part VIII: "The 11th Hour" Edition
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12-01-2012, 10:37 PM
Sent to HF Minors
Join Date: May 2007
Originally Posted by
Beacon, the Tragedy of Commons is incredibly easy to avoid in the NHL's case. First of all, don't make the difference in revenue sharing so wide. Second of all, don't base the amount you give on the amount you bring in. This isn't a tax we're talking about. The top 5 teams in revenue draw give $X. The next 5 teams give $X-Y. The next 5 teams give $Y-Z. It's that simple.
The Tragedy of Commons specifically refers to unmanaged situations, as the creator of it himself admits. That wouldn't be the case.
Ok, very nice, so if I'm running a team, I try to keep my ticket prices lower than I could've charged and just avoid fixing up the stadium, allowing the overall experience to drop, but hey, the tickets are cheaper so people will still come, and I don't need the headache of creating a top-notch product.
For the other stuff, I start other companies that sell something in the stadium. Theoretically, these companies aren't mine (they are in my wife's or brother's name), so they don't count as revenue. Therefore, all the hot dogs, jerseys, etc. that are sold aren't part of the team revenue.
The result of all this would be a race to the bottom on who makes the least amount of money. The NHL will start to look like rent-controlled buildings in NYC: sure they are cheaper than other buildings, but there are roaches and mice, and the heat breaks down every time it snows (I lived in one of these apartments when I was in college).
If I have to turn over my money to someone else, I'd rather turn them over to my fans or players or city residents than to Wang.
I really only see the luxury tax as a workable model, but that would mean scrapping the hard cap. If the Rangers are willing to spend $15 million to add Parise ($7.5 salary + $7.5 tax), they should be allowed to do so. The tax will then be split evenly among all the teams to avoid giving an incentive to teams that can't run their finances properly.
I must say, no-fail economic operations = socialism. This is why our government fails so badly - a government agency can't go bankruptcy, so therefore, all of them function at a net loss. Private companies run free parks, lotteries, etc and make money, while the government is always losing money because nobody is afraid to lose his job because of inefficiency. This is what professional sports is coming: no matter how badly you run your business, you can never go bankrupt.
Telling a business that it can never lose money is like telling an employee that he will never get fired even if he fails miserably and doesn't even try.
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