Draft Season Reminds Us Who Truly Exploits Young Athletes [see answer]



Draft Season Reminds Us Who Truly Exploits Young Athletes (The Answer Is Old Athletes)

As a college professor in the Southeastern Conference and former member of our Athletic Association Board of Directors, I am quite familiar with the argument that colleges exploit athletes (meaning football and men’s basketball players) by not paying them even though those sports produce millions in annual revenue. I have also expressed the counterargument, that these student athletes are, in fact, paid quite a lot in non-wage income. Specifically, they get tuition, books, room, board, coaching, medical care, nutrition support, and national media exposure. I am not trying to settle that debate today, but to point out a place where there might be more agreement: professional sports leagues are exploiting those same athletes with much less of an excuse.
In particular, having now completed the four major professional sports drafts, the NFL, MLB, NBA, and NHL will proceed to underpay many of those athletes for a period of three to five years. This exploitation is accomplished through the use of salary caps, by depriving the best athletes of the chance to have competing teams bid for their services (the drafts), and by requiring them to sign contracts of certain lengths. Further, each league has rules about how long a player must work for one team (unless that team chooses to trade him) before he is free to sell his talents to the highest bidder.

For example, the NY Giants’ Odell Beckham, Jr., the Dallas Cowboys’ Ezekiel Elliot and Dak Prescott, and the NY Yankees’ Aaron Judge are all ridiculously underpaid when their performance statistics are compared to other, older, similarly-accomplished athletes. And they might remain that way for years. Aaron Judge, for example, won’t be a free agent until 2022, so while his pay will rise from its current $544,500 per year over the next five years, if he remains anywhere near as productive as he has been so far he is likely to be underpaid by $30-50 million over the timespan when he can only play for one team.
Team roster moves even reflect this exploitation. The NBA saw a number of trades in the past week at least partially motivated by teams’ desires to move a player before the team might be forced to pay the full market price for that athlete’s services. As Zach Lowe reports at ESPN.com, Zach Lavine was probably traded partly to avoid having to pay him top dollar once he is eligible for a max contract. DeMarcus Cousins was an earlier trailblazer down this same path.




The funny thing about this exploitation is that it is not carried out by the owners of these sports teams as many people think. In fact, owners in all four major leagues are required to spend a specified minimum amount on player salaries and also face some mechanism that limits the maximum they can (NFL, NHL) or are likely to pay (NBA, MLB). Rather, the beneficiaries of the artificially low salaries for young professional athletes are some of their own teammates—the older professional athletes.
This exploitation happens because all four leagues have collective bargaining agreements between a players’ union and the owners. The union members are existing players, not future ones, so when they decide how to divvy up the pot of available money, nobody is representing the next crop of athletes.
When the team’s total payroll is fixed as in the NFL, or quasi-fixed such as in the NBA, the less you pay rookies and more junior players, the more money is left for veteran salaries. The veterans are the ones who negotiate the collective bargaining agreement, so (surprise!) it favors them. This wouldn’t necessarily be an unjust situation if all players got a turn to be both the rookie and the veteran; in such a case we could just think of the big money later as deferred compensation from the early years.


However, because most players don’t make it to second contract, especially in the NFL, they don’t all get a turn at the big money. Instead, lots of young players play for below-market rates, while a smaller number of veteran players collect the big bucks.
Almost fifty years after Curt Flood began the process of winning professional athletes more rights to control who they play for and how much they get paid, professional athletes in the four major sports leagues are still far from fully free when it comes to where they play and how much they get paid. In simple terms, owners got the players to agree to limit their collective pay so long as the salary system rewards the biggest, longest-lasting stars. The price of this possible future enormous wealth is the underpayment of virtually all players in their first three to five years. As sabermetrics allow for more and more precise computations of each player’s worth to the team, this exploitation of younger athletes is looking worse and worse.




Jeffrey Dorfman is a professor of economics at The University of Georgia. His last popular press book is an e-book, Ending the Era of the Free Lunch. You can follow him on Twitter @DorfmanJeffrey
@uptimistpeters

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