THEIR SPORTS TEAMS
Sports team ownership used to be a personal thing. “Old Tom” Yawkey used to sit in a blanket during his Boston Red Sox practices and “his boys” would all pass the time with him waiting their turn in the batting cage. But ownership has changed dramatically over the last couple of decades to the exclusive club of the fabulously wealthy. Even the identified managing partner in ownership groups earns that position by being the billionaire among multimillionaires. Today, nearly every team is only one element in their owner’s wealth—generating portfolios.
As a result, to many sports fans and pundits, it seems that sports teams are now simply toys for billionaires. Part and parcel with this perspective, many reject the usual business and economic models as meaningful ways of analyzing ownership behavior and outcomes. At points in time when they face chances for very large gain, owners oblige this viewpoint strategically to their own ends. As the old joke among owners goes, the way to get a small fortune is to start with a large fortune and then buy a sports team. When confronting players at collective bargaining points or their state and local government hosts at subsidy revision points, owners claim massive losses and call for a “new business model.”
So we end up with the usual trappings of myth. Sports fans hear from owners that teams are money pits. Despite the fact that there are perfectly sensible explanations that don’t force anybody to abandon sound business and economic principles, mythical “ownership irrationality” somehow manages to dominate the discussion. For example, sports team prices are