Money in Sports: Have we gone too far?

Sports are a business…plain and simple. Whether you chose to believe it or not, our beloved past times are ruled by television contracts, sponsorships, naming rights, and billionaires. It’s hard to say whether the rampant spending that has plagued the world of sports contributes to the futility of many teams attempting to “break the curse” and win that long eluded championship in x number of years. One thing is for sure, if the amount of money changing hands in sports for talent and venues continues on the path it is currently travelling we risk seeing this entire system collapse and the method of escapism for so many people in this world destroyed.

This topic has recently sprung to my mind because of the recent drama in the closing of the European football transfer window this past January. For those of you who do not follow sport on the other side of the Atlantic, January is a month in which teams are allowed to move players for sums of money to be paid out by receiving teams. It is generally a dull month in which mainly negotiations take place except on the final day of the window which acts as a Euro-style Trade Deadline. Teams that need to make that push to gain or dump talent do so in this last opportunity of the season. This past January transfer window saw the largest amount of money change hands between English football teams than at any other point in history. Two players: Andy Carroll and Fernando Torres, each broke the British transfer record in successive moves valued at £35 million and £50 million respectively. They also automatically entered the top ten list of the highest paid football players in the world. Not too shabby for a Spaniard having the worst season of his career and an Englishman who has only played half a season of top flight football. Whether these players deserved to be valued at and paid the amounts they did is irrelevant. What is important is noting just how willing their new clubs were to shell out tens of millions of pounds in order to acquire their services for the next few years. This is the problem we face.

In the 1960’s this sort of money changing hands for footballing talent would have been unthinkable. Forget attempting to adjust inflation to equate the amount of money spent in today’s dollars with their values in that period of time. The fact is football players once had a cap in England of £20 a week and no more. In today’s world we would think of having the unrestricted ability to cap a player’s payments to be a joke. Back in the day however football was seen as a past time and not as a cash grabbing scheme. Some would argue that it is still futile to believe you can make money off of owning a football team but let’s not get into that debate. When Fulham FC broke the mold and decided to pay their best player, Johnny Haynes, £100 a week there was uproar. Were athletes worth that much money for simply playing a sport? Was it justified that men toiled in the coal mines, railroads, and factories throughout industrial England for tiny sums in comparison to men who were charged with kicking a ball? In the end the answer became clear, if you wanted to attract and keep the best talent in the country you needed to be prepared to pay more than the other teams and to do it. This new found freedom for teams started a trend that continued to grow for years. Every time a player reached the next plateau of weekly payments there were questions in the press as to whether these amounts could be justified. Culminating in the contracts of Carlos Tevez for Manchester City and Cristiano Ronaldo for Real Madrid who are paid over £200 000 per week. Not matter how many stories ran in the press, the arguments and the counter-arguments; nothing could be done to stop the spending.

For those teams that have been lucky enough to draw the attention of international billionaires willing to finance their ambitions, the rewards have been sweet and continuous. For those who have not, obscurity in the middle of the table or lower leagues lie in store with only a glimmer of hope for a cup victory sustaining their weekly play. The governing board of football in Europe, UEFA, has recently brought into effect a range of regulations that teams will have to abide by before the 2013/14 season. Known as the “Financial Fair Play” rules, they force teams to not spend more than their yearly income and are supposed to emphasize long term youth development over a short term quick fix contract. Given that Chelsea recently posted on their website that they were in the red for the first time since billionaire Roman Abramovich took over and later that day spent £75 million on two contracts it is difficult to see whether clubs will take these new regulations seriously. Luckily UEFA is willing to withhold participation in the Champions League (the premier club competition in Europe) as punishment for not abiding by them.

 Pundits of this system have argued in the past that leagues in North America have taken measures to prevent the type of over-spending that has been entrenched in the English national game and they should look to adopt these themselves. Are these systems really working to squash the same problems across the pond?

North America holds the largest sports leagues in the world. It houses the largest collection of stadiums, the biggest fan bases for franchises, and the highest volume of rewards for the successful teams. North America is also the epitome of where big business has been married with sports so successfully that divorce is not conceivable.  This is the land of television contracts, as much a source of funds as the billionaire owners whose money drives the teams. This is the land of sponsorships where players and teams will sell ads and space wherever possible to make that extra buck and everything involved in the game is “Brought to you by”. Corporate America is evident everywhere and it has affected the amounts of money available to franchises to spend on their players. No league in this part of the world is guiltier of obscene amounts of spending on playing talent than Major League Baseball.

When one thinks of high spending in North American sports thoughts will inevitably turn towards Major League Baseball and without a doubt to the New York Yankees. This is a team that has time and again outdone itself in setting the highest standard for a player’s yearly salaries. As any fan of the game will tell you this franchise has one of, if not the most, storied history of any team in any sport in the world. Players want to play for the Yankees, sometimes even before they ever become pro, and with that draw combined with the amounts of money available to them it is no wonder the Yankees have won the championship 27 times. We’re talking about a team who, after missing the playoffs for the first time in 15 years, spent half a billion dollars to acquire the skills of 3 players in the subsequent off season and then went on to win the World Series the next year. Money well spent you would think, but is that what has to be done in order to win? You look at teams such as the Boston Red Sox and their signings of Adrian Gonzalez and Carl Crawford as well as the Philadelphia Phillies’ signing of Cliff Lee in this past offseason and it’s no wonder the biggest teams spending the most money are the ones who are the most successful. They are simply able to put the best players in the game into their uniforms.

Where does that leave the rest of the league? Essentially playing the role of a punching bag to the juggernauts as they make their annual trip to baseball in October. This is not always the case however, and one need only look at the runs of the 2008 Tampa Bay Rays and the successes of this past season for the Texas Rangers and the newly crowned World Series champion San Francisco Giants. These teams have proven that with the right combination of scouting and drafting expertise, proper player development programs, and key signings at the right time can lead to success at a reduced cost. Unfortunately you cannot equate one year of success with the decades of consistent winning baseball of other teams. Even more so, their continued presence in the post season causes an influx of annual cash that most teams must go without. Even more so, after these teams have their one off successful season their herein domestically developed players will become hot commodities on the open market for the predators and their franchises must make a choice to break the bank or allow their sought after talent to walk away and begin fresh with another run at the championship in perhaps another decade’s time.

Now don’t get me wrong, Major League Baseball has put into effect systems to try and put a stopper on this spending, known as the Luxury Tax. When a team opts to spend a certain amount of money on players that exceeds an amount set by the league they have to pay a percentage to the league that then gets distributed to the other teams. The amounts the teams receive are small and it does not level the playing field in any way. Even more so, teams are more inclined to just spend the exuberant amounts and concede with paying the tax as opposed to stopping their high spending. If a franchise is willing to dish out hundreds of millions of dollars, what’s an extra twenty or thirty going to hurt?

It seems that the NHL, NBA, and NFL have it right when it comes to salaries. They have all introduced caps that only allow teams to pay their entire squad a certain amount of money each year. If teams go over these numbers they are penalized with increasing severity as infractions mount. Although this has seemingly worked (the distribution of talent and success of teams in these leagues are balanced fairly well) there are still major complications. Organizations have crept towards newer contracts that are front loaded with heavy payouts during the first few years that slowly drop off as a player would be deemed to become less effective due to age or be retired. These contracts completely circumvent the idea of a salary cap and allow teams to take advantage of the situation the leagues have placed them in. This has become most rampant in the NHL with Ilya Kovalchuk’s contract with the New Jersey Devils being the most recent example. Ironically the leagues can actually do very little to avoid these types of contracts except to drag clubs to an arbitrator in order to decide whether the contract is legal under league rules or not. The Miami Heat of the NBA have proven that even with league measures in place, it cannot stop teams from spending hundreds of millions of dollars on a small amount of players, especially when it’s some of the best players in the league who are in question. Even North America’s answer to football powerhouse leagues in Europe, Major League Soccer, cannot escape the idea of a salary cap. Even  more ironic in this league is their understanding of how they need to compete with other international leagues and even though they have caps in place, each team is allowed a set number of “designated players” who are allowed to be paid whatever amount the club in question wishes. This is how MLS was able to attract the likes of David Beckham and Thierry Henry among others. MLS knows that putting caps on player’s salaries cannot fly in a sports world where money is everything and large amounts are needed to lure the best talent.

With all of this knowledge a question looms above our heads, has passion left the sports world for good? Some would argue (and myself included) that if you want to see true passion and pride you need not look any further than NCAA college sports. These sports, American football in particular, are still ready examples of what sports used to be like: athletes playing not for millions of dollars but for pride, passion, and a love of the game. They play to win in order to bring glory to their school and to become a part of history in areas that covet unsung heroes. I get goose bumps when I see stadiums festooned with the colours of an academic institution whose crowd consists of people who actually know the athletes on the playing surface, maybe have classes with them, or are even close friends. The separation of athlete and fan is very small and the absence of money has a lot to do with that. Money has created a sense of elitism in professional sports and athletes are more disconnected with their fan base now than ever before. I won’t say passion is completely lost; you still have your Crosbys, Lebrons, and Ovechkins. These are players who legitimately enjoy and have fun playing the game that they do. It’s just unfortunate that these are the players who demand those high salaries as a result of their talents.

So where does this leave us? I am personally afraid that it will lead us onto a path of self destruction. To a world where money becomes so ingrained in these games that the sport itself becomes a complete second thought to those players that we worship. I understand we can’t hearken back to a time when the star player of Manchester United lived a couple flats down from you in a working class neighbourhood but is it necessary to spend the amounts we do? Even when we see franchises move cities, go into administration, and sell off assets to new buyers; as long as someone is footing the bills we are willfully ignorant to the amount of influence money has on these games. Just ask those people who paid out $200 a ticket to sit OUTSIDE of Texas Stadium to watch the most recent Super Bowl on television screens. It is said that money is the root of all evil and as higher amounts continue to creep more heavily into sports this evil becomes more tangible and relevant. It’s time for sports and its athletes to take a page from the younger generation and return to their roots: pride, passion, and a genuine love for the game.