Change Partners?
March 08, 2005
The recent proposed buyout of the NHL by a partnership/corporation has baseball fans wondering if the same ownership structure could be applied to Major League Baseball. It’s a good question; one I’ve wondered about many times. You might say that a partnership structure, in which individual partners are relatively autonomous but split the “firm’s” profits according to some formula, makes a lot of sense for baseball. Many professional organizations, like law firms, are run this way.
A partnership structure is appealing to some, because owners would theoretically be concerned about the overall financial health of baseball. They’d be partners. Imagine how George Steinbrenner would act if his profits came out of the total Major League Baseball bottom line—not just the Yankees’.
But partnerships have their faults (sounds like a marriage column, doesn’t it?). For one thing, a partnership would reduce player salaries and freedoms significantly. The team owners/partners would essentially collude to keep salaries low, except it wouldn’t be collusion. It would be legal. The New Yorker has an interesting article that suggests that the old Marxist conflict of capital and labor is obsolete; that the relevant conflict today is capital vs. talent. And talent, in today’s knowledge-based world, provides a greater share of value and takes a greater share of the profit.
There are some flaws in the article—when did baseball and hockey players become “knowledge workers?” —but it is true that the baseball profit pendulum has swung away from the capital and toward the talent over the last thirty years. And this is a good thing. I believe baseball has reached a relatively equitable balance between the two and I’d hate to go back.
And a partnership structure would likely have other unintended consequences, such as contraction. Come to think of it, with revenue sharing and friends of Selig ruling the roost, baseball might be closer to a partnership than true competition today more than at any other time in its history. In my opinon, this is not a good thing.
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