Why American Sports Are Socialist – The Atlantic

Today’s American sports leagues don’t have the same problem of abundance. For example, there are only 32 teams in the NFL and 30 teams in Major League Baseball. There is no 33rd football team that can compete with the Tennessee Titans for a spot in the league. If a baseball team is bad for an extended period of time, they might lose fans or move to a new city (which is a form of relegation), but nobody talks seriously about sending the Minnesota Twins to AAA.

In fact, there have been several periods in U.S. history when multiple leagues existed within the same sport. There used to be an American Football League and a National Football League, but they merged in 1970, in part to prevent each from outbidding the other for the most talented players. There used to be a Basketball Association of America and National Basketball League, but they merged in the 1940s. As a result, for decades, there has been one dominant monopolistic organization (or a cartel) for each of America’s most popular sports: football, basketball, baseball, and hockey.

With a small, and relatively fixed, number of clubs in each league, America’s professional sports organizations have a different challenge to keep individual teams from falling helplessly behind. If the Philadelphia 76ers are historically bad every year for a decade, it risks destroying the city’s fan base and hurting television revenues.

The EPL and the NFL may appear to have very different concerns, but on both sides of the Atlantic, sports leagues are trying to answer the same questions: How does a sports league account for its worst performers? How does it retain the fans of the league’s least successful teams?

In English football, where there are hundreds of similarly talented squads, the promise of churn keeps those fans interested: Late-season games between bad teams take on enormous significance when a loss might lead to relegation. In American football, where there are exactly 32 similarly talented teams, the promise of parity keeps those fans interested: If an NFL team stinks this year, all the more hope for next year. Promotion and relegation increases in-season drama, while the American system increases post-season hopes.

Finally, American professional sports leagues do promote and relegate, but at the player level. Baseball teams often demote bad players to AAA or call up AAA players into the big leagues. NFL teams do the same by moving an athlete from the practice squad to the roster. Here again, promotion and relegation solves the same problem of abundant competition. The best AAA player really is probably better than some MLB players, and the best practice-squad wide receiver is probably fit to play on Sunday.

As Alesina, Glaeser and Sacerdote observed, policies aren’t destiny, but rather the offspring of history. The modern history of American professional sports has been the story of single organizations monopolizing the best talent in each game. While there are thousands of teams in the English soccer universe, there is only one NFL, one MLB, one NBA, and one NHL. To ensure the widespread popularity of their entertainment monopolies, they made parity their cardinal virtue. To enforce parity, they embraced varieties of socialism that most American institutions have steadfastly rejected. Judging by their record profits, it would seem that sometimes being nice to losers is a winning strategy.