“It’s just business.” You hear it whenever some marginalized community loses a necessary service, or when a sick person is denied sorely needed coverage for their health, or when a laborer’s basic humanity is impugned, all in the name of the almighty dollar.
It’s a phrase spring-loaded with the connotation that “businesses” are in the business of doing anything and everything to make money, and that their mere existence justifies the collateral damage they cause. On some level, it’s difficult to blame people if they default to “it’s just business” when they encounter a wrong being done by a company that manufactures their steel cut oats or designer toothbrushes — if only because, hell, we all need to get on with our day.
We’ve been told “it’s just business” so often in our lives that we accept it as easily as air. It has become a state of existence, perpetuated by economic titans such as Milton Friedman, who declared “there is one and only one social responsibility of business: to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game.”
Plenty of people disagree with this worldview, but there’s no denying the rules of the game are ill-defined, malleable, unenforced and yet somehow ubiquitous. What they are not is equitable or ethical.
Major League Baseball is a prime example, having emphasized its bottom line at the expense of both players and fans by constantly changing the rules of the game. It has done so despite having already bilked cities, counties and states for tax breaks and public dollars for stadiums, despite an antitrust exemption upheld by the U.S. Supreme Court, and despite the foundational importance of fans as stakeholders in its individual organizations and the league.
There isn’t (yet) a salary cap, but front offices — likely due to pressure from ownership — have begun to treat the aptly named Competitive Balance Tax as a line in the sand. In 2012, MLB placed a heavy tax on spending more than five percent over one’s draft allotment that no team has yet to breach. Once the ability to spend freely in the draft was eliminated, teams used the international free agent market to build teams cheaply relative to the free agent market, proper. The most recent CBA tried to put a stop to that by implementing a hard cap on international spending, but regular free agency spending never bounced back. And despite these supposed great competitive balance measures, MLB has experienced record talent disparity over the last two offseasons.
The words “competitive balance” and “parity” often get used in sports, the idea being that leagues should strive for an environment where some combination of talent, intelligence, stamina and plain old luck decides champions, and not budgetary advantages. To that end, leagues and owners pursued options like salary caps, the draft, the reserve clause, international spending caps, luxury taxes, draft pick compensation, restricted free agency … the list goes on.
And conveniently, all of these measures come at the expense of labor. It’s not just salary caps, which are a transfer of wealth from players (labor) to owners, but the draft, too, which eliminates the ability of draftees to leverage teams against each other. Competitive balancing is always about limiting the top spenders rather than prodding the cheapskates.
As consumers, we’ve gotten used to rationalizing upcharges or degraded service, like the collective action of major American airlines which started offering a “basic economy” class that is helpful only to people who are traveling long distances on airplanes without bags (as we all love to do). We come to believe our inconvenience is helping a company stay afloat and continue to provide a service we otherwise wouldn’t have. Too often, though, we are being underserved and oversold in the pursuit of a temporarily attractive bottom line that will boost a stock price just long enough for that company to sell itself to another corporation, leaving them, and us, to hold the bag.
It doesn’t have to work this way though, mostly because this way isn’t working out for the vast majority. As Anu Aga, ex-chairperson of the giant engineering firm Thermax Limited, said “we survive by breathing but we can’t say we live to breathe. Likewise, making money is very important for a business to survive, but money alone cannot be the reason for business to exist.”
Baseball isn’t a vital industry to humanity, but it is a good study in how capitalism corrupts itself. In theory, a baseball team’s goals are simple: win games and entertain fans. By pursuing profit, it can also aim higher, building community spirit in the process. But in practice, baseball has become cheap and callous. After decades of spiritual degradation, MLB has come to epitomize the clash between society and late capitalism, and the ways in which capitalism is winning.
It’s strange that shareholder-first ideology has become so prevalent in sports. Efficiency uber-alles, especially in baseball, is orthodoxy these days, but that certainly wasn’t always the case. The late-era George Steinbrenner Yankees were built upon the Core Four, and supplemented by mercenary free agents who helped bring World Series titles to the Bronx.
And yet, after a pair of frosty offseasons, MLB now presides over organizations that routinely pass over premium talent at prices that are more than justifiable by public advanced metrics.
For a long time, $/WAR was the default framework by which free agent signings or trades were evaluated. This inevitably led to teams to lean on quality, young talent that was — and this is crucial — under team control for long periods of time. That control, which gives teams unilateral ability to decide salary for the first three years of any player’s career, became an end unto itself. It wasn’t rare to read something along the lines of “yes, Team A dealt away Superstar X to Team B for a smattering of players you haven’t heard of, but Team B will receive 15 controllable seasons in return, while Team A will receive only a year.”
Efficiency was, and is, the name of the game. It’s not enough to win, but you also have to appear smart while doing so. This is, in part, why teams don’t simply promote their prospects to the majors when they’re ready. Instead, they wait until after they’ve manipulated those players’ service time to gain an additional year of control.
As on-field optimization became de rigeur, baseball teams began using the same heartlessly efficient principles in other decision-making areas of their organizations. It isn’t enough to sell out a crowd, teams must maximize dollars per customer. That means ceding traditional fan seating to luxury boxes, raising ticket and concession prices, and generally just making it more difficult to attend a baseball game. This shift was aptly summed up by Robert Alvarado, the Los Angeles Angels’ then-VP of marketing and ticket sales, to Pedro Moura in this 2015 OC Register piece:
“We may not be reaching as many of the people on the lower end of the socioeconomic ladder, but those people, they may enjoy the game, but they pay less, and we’re not seeing the conversion on the per-caps,” Alvarado said. “In doing so, the ticket price that we’re offering those people, it’s not like I can segregate them, because I’m offering it up to the public, and I’m basically downselling everybody else in order to accommodate them.”
How one perceives that statement depends a lot on their views of why a business, and why a baseball team, exists. If the goal is to make money, then optimizing “per-cap” conversions is a reasonable place to start (even if one could also argue quite convincingly that it’s short-sighted). If one happens to think a baseball team exists to serve its community, as a municipal staple and entertainment option, then the statement is outrageous. Choosing empty seats — to intentionally not serve a significant portion of the fan base, to ensure upper-class patrons don’t see their perceived value impacted — is blasphemy.
Owning a sports franchise means shepherding a sacred member of the community that has existed for generations. It means benefitting from decades of handed-down fandom. To be unwilling to invest in a team should be considered sacrilege.
If, according to Aga, money alone cannot be the reason for a business to exist, then what is? There may not be one reason, exactly, but if there were, serving the community, be it locally, nationally or globally, seems as good a place to start as any. To look at the people and environments that compose those communities and think first of them, to think of returns on objectives rather than returns on investments. The rules of the game work a lot better when they’re geared towards the consumers they purport to serve rather than the bottom line.
Somewhere along the way, a bunch of people decided prioritizing shareholders above success and fan experience was just the way things ought to be. That making an extra buck at everyone else’s expense was the cost of doing business. That because a company or a corporation was incentivized to do something — or more accurately, was not incentivized not to do something — they bore no responsibility for their actions. None of this holds objective truth. We have agency and responsibility that extends beyond our incentives, or else they would be called mandates. We can hold people responsible for the communities they leave in ruins in the reckless pursuit of the bottom line. We can choose differently.
For sports franchises, that entails a commitment to winning more than efficiency. No matter what people implore you to believe, sports franchises aren’t like other businesses. They inspire fierce allegiance like few brands can, sworn lifelong fealty merely by virtue of being born in their general vicinity. They trade in cultural value, and thus have an obligation to provide for that culture.
Other brands sometimes create those loyalties, sure, but that’s often thanks to a period of time when the product was best in class, before marketing took over. When it comes to other businesses we tend to, eventually, update our priors based on quality, price, convenience or some other service standard. Yet, when’s the last time someone changed their favorite baseball team due to ticket prices? They might show up less often, but their allegiances — who they root for — tend to be entrenched. This means the only way for a team to adequately serve its “customers” is through good-faith competition. Rebuilds are acceptable when they’re not also (read: actually) an effort to line ownership’s pockets, and they’re even more acceptable when the team later spends to win.
That puts sports teams in a unique relationship with their customers. They are highly incentivized to do right by their fans, and yet they can also easily abuse that relationship if they want. Essentially, they are free to choose either Friedman’s or Aga’s view of capitalism.
Sports franchises are an obvious, and potentially powerful, tool to build community, and yet so often, and seemingly increasingly, they take the path of least resistance. My argument, my plea, extends to businesses of all stripes: Focus first on serving your customers and employees, and allow profit to serve as a guideline within that endeavor. Justify your existence. If as a company you’re already profitable, but can further increase profits by slashing essential services or making them worse, do you do it? A commitment to profit maximization provides an easy answer. But so does a commitment to your community.
Sadly, this time of global crisis has dampened hope that teams can put others first. We’ve seen athletes come to the fore, offering to cover the salaries of stadium workers who are suffering in the absence of sports, and deepen their bonds to the people and places they represent. And while many organizations have pledged to do the same, too often they’ve led from behind, waiting until they’ve been shamed to support employees rather than lay them off.
Rarely have corporations been forced to so distinctly choose between rededicating themselves to communities or continuing to plunder as they see fit. The pandemic gave baseball a test in this regard. They’ve clearly flunked it.