The Population Shifts That Don’t Favor Baseball

With the Major League Baseball playoffs now underway, some of the discussion that seems to always emerge every year centers on the television ratings for the playoff games and the World Series. Some of the talking heads will lament that the ratings aren’t high enough. This is partly unfair since the baseball playoffs take place during football season and the number of people who watch the NFL dwarfs the number for all other American sports comparatively.  But the concern over baseball’s playoff ratings is not entirely without merit. When looking more closely, substantial problems are revealed.

More than any other sport, baseball is dependent on popular teams (almost always from big markets) to drive ratings. The lone World Series the New York Yankees played in during the past decade (2009) was the highest rated during that span. This was despite that series only going six games when two other series during that time frame (2011, 2014) went seven (game sevens drive up overall ratings for any series in any sport). The most recent World Series to rate higher than 2009 was 2004, when the Boston Red Sox finally vanquished the Curse of the Bambino. This was despite that World Series being over in just four games.

In contrast, the NFL does not need big market teams or historically successful franchises in order to get people to watch their playoffs games or the Super Bowl. American sports fans tend to watch the NFL playoffs and NFL Football in general regardless of who is playing. The Super Bowl is such an enormous event that many people watching aren’t even football fans and watch for other reasons (like the commercials). The market size and overall popularity of the teams involved is largely inconsequential.

The NBA is much more dependent on great players making deep playoff runs rather than teams from large markets. But this usually isn’t a problem when it comes time for the NBA Finals since at least one team playing usually has one of the league’s best players.  For example, the ratings for the 2010 NBA Finals between the Boston Celtics and Los Angeles Lakers (the two most successful franchises in NBA history) were only marginally higher than the ratings for the finals in 2012 featuring the Oklahoma City Thunder and Miami Heat. This happened despite the fact that the 2010 series went seven games and the 2012 match up was over in five. This was, of course, due to the 2012 Finals being a head-to-head contest between Lebron James and Kevin Durant who were arguably the two best players in the game at the time. But in baseball, would ratings for a World Series between an average size market like Miami and a small market like Oklahoma City ever be close to that of one featuring the Red Sox and the Dodgers? My guess would be no.

So if baseball more so relies on popular teams from big markets in order to drive viewership, it is then fair to look into the migration trends for the areas in which the sport is most beloved. The general trend has been that Americans are mostly moving away from areas in which baseball is most important and toward areas where the game’s interest is considerably depleted. States which contain the three most popular MLB teams, the Yankees, Red Sox and Cubs, lost a total of four US Congressional Districts as a result of the 2010 Census (New York lost two, Massachusetts and Illinois both lost one). Other popular teams such as the Cardinals, Phillies, Indians and Tigers are also located in cities/states where people are leaving. This is, of course, consistent with the general migration pattern in the US for at least the past few decades where the northeast and midwest are losing people and the south and west are gaining them.

In contrast to these classic baseball cities that people are fleeing, the southern and western areas they are migrating to typically do not love the sport with the same kind of passion. Although growing states like Florida, Texas, Georgia and Arizona all have baseball teams, those teams all take a back seat to other teams in their respective states (former ESPN writer Rick Reilly assessed which team in a given American sports city was the most important to the fans in that area here). This leads to the observation many have had that there are more Yankees and Red Sox fans at Tampa Bay’s stadium when those teams visit and more Mets and Phillies fans at Marlins home games featuring those match ups then there are fans of those Florida ball clubs. The south in general is statistically less interested in following baseball than those in the rest of the country.

Thanks to modern technology, people in any part of the country can still watch their favorite teams if they are willing to pay for a special TV package. Thanks to the internet, people can get updated scores for any team at any time. But baseball has more of a regional need than most other sports. I’ve heard many times from many people that they don’t like watching baseball on TV, but they do enjoy going to games at the stadium. Thus, people no longer being within close proximity to the stadiums which feature those popular, big market teams presents a bigger problem for baseball than people moving away from their favorite NFL or NBA team. Football and basketball don’t seem to become less watchable without the live stadium experience to the degree that baseball does.

All of this presents a unique set of problems to baseball going forward. The regional population shifts along with the sport’s over-dependence on popular, big market teams comprises a set of bad ingredients for the future of the game. Baseball can certainly survive this type of difficulty. But one can’t help but wonder how this will influence the status of baseball as a major American sport as these trends continue.

 

Diversity Surging in Baseball Despite Lack of Black Americans

In response to the protests of the National Anthem by NFL players like Colin Kaepernick, Baltimore Orioles center fielder Adam Jones stated his opinion as to why there aren’t baseball players taking part in similar social activism.

Jones told USA Today, “baseball is a white man’s sport.”

He later told the Baltimore Sun, “Baseball is numbers. It’s 8 percent black. I didn’t make that up. In football, basketball, the numbers are in the 60s and 70s. These aren’t made up numbers. It just is what it is. I’m part of the 8 percent.”

Jones is correct that the number of American blacks playing Major League Baseball is at roughly 8% (but remember that these are American blacks). This percentage has also been declining for most of the past 20 years after being at over 17% in 1994. But do declining numbers of African Americans necessarily mean that the organization as a whole has gotten whiter? Let’s take a look at who the rest of the Major League Baseball players are.

 

Although the percentage of African Americans playing professional baseball has been declining, the percentage of Latino players has been holding steady at above 25% since 2001. Many times these Latin players are just as blackas their African American counterparts having been descended from African slaves brought to the west. Therefore, MLB players like Edwin Encarnacion, David Ortiz and Francisco Lindor would be categorized as Latino despite people likely identifying them as being black based on their appearance. Add these foreign born black players to the number of American born blacks in the league and their percentage would look far less depleted.

 

Asians are another minority group who has seen significant growth in the number of Major League players. As recently as 1993 there were no Asian players competing at the big league level. But their numbers grew steadily throughout the next decade and have been sitting consistently around 1%-2% throughout the 21st century. Obviously this isn’t a huge percentage, but it does show a significant increase.

 

But what about all of those white players? Surely a “white man’s game” like baseball has seen an impervious level of white participation at the highest level, right? Well, not exactly. The percentage of whites in MLB hasn’t been above 70% since 1989 and has been below 65% since 1995. The past two seasons have seen the percentage of white players at just below 60%.

 

So how do these percentages correlate to the racial composition throughout America? As it turns out, non-Hispanic whites comprise about 63% of the American population (according to 2012 numbers). This has been roughly similar to the percentage of that same race in Major League Baseball. Blacks are now underrepresented in the sport as they are about 12.5% of the population and only 8% of professional baseball players. But with the decline of American blacks in MLB, the Hispanic percentage has become overrepresented considering their US population is at around 17% and they comprise over 25% of Major League players. Asian players are underrepresented still, standing at between 1% and 2% of big league ballplayers and being about 5.5% of the American public. But again, that race was nonexistent in the game before the number of American blacks began to decline.

 

What’s interesting about the current racial makeup up Major League Baseball is that it isn’t any “whiter” than the American population in general. If one simply observes it with regard to whites and non-whites, baseball at the professional level doesn’t seem to be quite the “white man’s game” that Jones seems to be insisting that it is. Yes, baseball is certainly whiter than the NFL (about 68% black) and the NBA (about 75% black). As a result, the leagues which have more blacks are more likely to have members speak out against things which negatively affect the black community in America (like police brutality, etc.). But to jump from being considerably more white than two other professional leagues to being a “white man’s game” seems to be a bit of a stretch.

 

What’s more, the American populace in general is often celebrated and championed as a result if its diversity. If you were to ask Americans what their definition of diversity is, many would define it as “looking like America.”  So an entity reflecting the country’s diversity would have many different races and ethnic groups represented in similar fashion to their percentages in American society (even though no entity exists which looks exactly like America percentage wise). The funny thing is, baseball does reflect a white population percentage similar to that of the rest of the country. The non-white portion of the Major Leagues (also a similar percentage to the non-whites in America, naturally) is comprised of American born and foreign born blacks, a growing Hispanic population and a newly established Asian contingent. Sound a whole lot like America to me.

 

So the decline of American blacks playing Major League baseball has resulted not in those blacks being replaced by whites, but by other minorities who are talented enough to play the game. Thus, one could argue that rather than getting less diverse as a result of depleted numbers of African Americans, baseball is actually just as diverse or even more diverse than it has ever been. If people are to take pride in the diversity we have in this country, then baseball should be embraced for exhibiting the percentages which in many ways reflect the different races and ethnicities that the country has. Rather than being the exclusive game of the white man that it used to be many decades ago, baseball has become a game featuring a various array of races, ethnic groups and nationalities of those who are able to play it on its highest level.

Ledecky Shouldn’t Have to Choose, But Wealth Makes Choice Possible

Five time Olympic gold medalist Katie Ledecky has passed up the opportunity to become a professional swimmer in order to maintain her amateur status and swim for Stanford University. She was faced with the choice to either cash in on endorsement deals by turning pro or compete collegiately in an elite swimming program while working towards a degree. Estimates are that she could have earned as much as five million dollars annually had she decided against swimming in college. The Olympic champion was still able to collect the prize money given to the game’s medalists.

The NCAA’s prevention of its athletes being able to profit off of their talent is what leads to the choice that Ledecky (and others) have to make. Competing collegiately means the athlete must forgo any endorsement deals that may be offered. In order maintain their claim of amateurism, the NCAA strictly enforces the lack of payment to its athletes despite collecting extraordinary amounts of money from their skill sets. Thus, the money one could get from leaving college and becoming a professional is often too enticing to pass up.

Refusing to compensate athletes through possible endorsements appears to be a detrimental policy for the NCAA. Not only does staying in college to compete in a sport appear to be a risky financial decision, but the American public seems to be embracing the idea of allowing college athletes to receive endorsement money. A 2014 Reason-Rupe poll found that 64% of those surveyed thought that student-athletes should receive money if a college or company sells gear containing their likeness or jersey number. Who or what is ultimately harmed if Ledecky were to be paid by those willing to compensate her for her likeness? Well, other than the NCAA’s increasingly unpopular definition of amateurism of course.

One may wonder why Ledecky left so much money on the table in order to commence a college swimming career that isn’t going to pay her. It may seem like a big risk considering the possibility of injury that is always lurking for all athletes. But looking into Ledecky’s family, it’s clear that the lifestyle she comes from minimizes those risks and makes competing as an amateur much more appealing. Her father, David, is a Washington D.C area attorney who has a B.A. from Harvard and went to law school at Yale. Her uncle, Jon, is one of the owners of the New York Islanders hockey team. For obvious reasons, someone coming from this kind of economic status is better equipped to embrace a choice that emphasizes collegiate amateurism rather than a professional pay day.

Since collegiate swimming receives very little fanfare throughout the country, Ledecky’s decision in this matter was not met with many strong opinions either celebrating or condemning her for it. The game that American sports fans complain about most when it comes to its athletes selecting a professional career over spending time in playing as an amateur is clearly college basketball. There seems to be a collective lamenting throughout the nation after the end of every March Madness when a huge portion of the college basketball elite opt for the NBA over another year at their university. However, it isn’t hard to see why this is the case. College basketball players who are able to become high picks in the NBA draft often come from disadvantaged, urban areas of the country. The payout they would receive from becoming a professional is usually vastly more money than either they or anyone in their family has ever seen before or will ever see again. So can we really expect poor, inner city youths faced with the possibility of million dollar salaries and endorsement deals to make the same economic decision as someone as financially privileged as Ledecky?

All of this makes an excellent case for why college athletes should be able to get paid by their schools and enter into endorsement deals. If the lure of a pro salary is too enticing, then allowing amateurs to collect some money for their talent is a good way to lessen that enticement so that more will choose to return to college. Sadly, the NCAA shows very few signs of adopting this model despite the positives that would likely occur. As of right now, in order to minimize the risk of delaying a professional salary, you need Ledecky-level family money.

 

Disconnect Between Player Success and Coach/Manager Success Shows Reason for Racial Incongruity

It has recently come to the attention of ESPN senior writer Mike Sando that the NFL’s self-imposed effort to hire more minority head coaches has failed to achieve its goal. The requirement behind the effort, named “The Rooney Rule,” was imposed by the league in 2003 and required that NFL teams had to at least interview minority candidates for head coaching and senior football operation positions. However, NFL teams are not required to hire the minorities they interview. Sando discovered that the number of first time minority head coach hires is no higher than it was prior to the rule’s inception.

The issue was of such importance that the revelations discussed in the article actually led off the popular ESPN debate show Pardon the Interruption (PTI). On this day, the show was co-hosted by Tony Kornheiser and Pablo Torre (who was filling in for the usual co-host Mike Wilbon). Sando’s article was cited at the beginning of the segment as an introduction of the topic about to be discussed. The following is the bulk of what transpired between the two talking heads.

Torre: When we talk about race and diversity in this country, whether it is college admissions or head coaching jobs we like to talk about equality of opportunity, access to those jobs, not equality of outcome. We don’t want to falsely engineer diversity. But to me there’s a certain point where the outcome is so stark that clearly there is not equality of opportunity. Clearly it is the case where there are just not enough qualified candidates for these jobs, or head coaches of African American descent are not seen as having the mental acuity to do these jobs much as the stigma has applied to quarterbacking and may also apply to coordinators and head coaches as well.

 

Kornheiser: I think we are struck by the incongruity that the league is two thirds black and head coaches are nowhere near that percentage. There are five black head coaches at the moment and seven general managers.

 

Torre making the claim that he favors equality of opportunity and not outcome is a fair enough point on its surface. But he then makes it clear that he refuses to accept the outcome if it crosses some under-diversified threshold that he is uncomfortable with. He then floats the possibility that there may not be “enough” qualified black candidates for these jobs. However, the word “enough” is entirely subjective as some sort of proof of success for blacks in certain coaching and front office positions.

Kornheiser’s claim of “incongruity” stemming from a 2/3 black league only having five black head coaches is rather flawed when one looks at the track record of former successful professional athletes in these kinds of leadership positions. For example, Art Shell made eight Pro Bowls over a decade and a half career and is now in the NFL Hall of Fame. But he was fired after his final coaching stint with the Oakland Raiders as a result of going 2-14 that season. Matt Millen won four Super Bowls and made two All-Pro teams throughout a 12 year career as a linebacker. Millen’s tenure as the General Manager of the Detroit Lions was an emphatic failure as his team was a whopping 50 games under .500 during his seven year run and had a losing record in each of those seasons.

Looking at other sports, we can see that this disconnect is not specific to the NFL. Isiah Thomas won two NBA Championships in a spectacular Hall of Fame career. However, Thomas performed so badly as the President of Basketball operations for the New York Knicks that just a few short years after his hiring the Knicks had the highest payroll in the league and the second worst record. He was then named the team’s head coach for the two following seasons in which they went on to miss the playoffs both years.

Being the greatest player in the history of your sport is likewise no guarantee of coaching or front office success. Michael Jordan has been either a minority or majority owner of the Charlotte Bobcats/Hornets for ten years while that team has only made the playoffs three times. Charlotte was so bad in the strike shortened 2011-2012 season that they set the record for lowest winning percentage in NBA history. Wayne Gretzky, who was to hockey what Jordan was to basketball, failed to make the playoffs or even post a .500 record during his four year run as head coach of the Phoenix Coyotes.

This is not to say that being successful as an athlete means success as a coach or front office holder is unobtainable. LA Clippers head coach Doc Rivers is considered one of the best in the game and was also able to play fourteen years in the NBA while making an All Star team. Ozzie Newsome made three Pro Bowls, four All Pro teams and was inducted into the NFL Hall of Fame in 1999. After retirement he developed himself into one of the best general managers in football with the Baltimore Ravens.

So in response to Kornheiser’s claim of racial incongruity when it comes to the percentage of blacks in the NFL and head coaching/front office positions, it can also be said that there is incongruity in success as an athlete and success as a coach, GM or owner. This disconnect persists regardless of race. Jordan and Thomas are both black whereas Gretzky and Millen are both white. All of them struggled significantly in their post-athlete days in other positions within their respective sports. However, both Rivers and Newsome are black and have achieved significant success in other leadership positions in the game which brought them success as a player. Considering that head coaching, general managing and ownership success is clearly a mixed bag when it comes to the former athletes who attempt those ventures, it is hard to see why the racial composition in one realm would reflect the other. Since skills to excel professionally as a player obviously do not always carry over to the nonathletic positions within the sport, let’s not pretend that those who succeed in one of those areas are going to look like those who succeed in an unrelated area. To assume a similar racial makeup would result is to ignore many recent examples which prove otherwise.

 

Ben Simmons Going Number One Shows Absurdity of NBA Age Limit

The NBA’s much anticipated draft night has come and gone. The annual event often provides plenty of surprise and debate over the order of the draftees. But what was certainly not a surprise was the Philadelphia 76ers using their number one overall pick to draft LSU’s Ben Simmons. Not only was Simmons often called the best NBA prospect, but Philadelphia allegedly informed him that they were going to take him with the draft’s top selection.

Simmons ascending to the top draft spot was certainly not unexpected. Even prior to the 2015-2016 college basketball season, many identified him as the year’s most promising choice. He’s been described as having point guard skills in a 6′ 10″ in body. Combine this with his speed and leaping ability and it isn’t hard to see why the NBA’s lottery teams were put on notice all year of the things that he was able to do on the court.

What has become apparent about Simmons’ lone year he played in college is how insignificant it was to his development as a player. If anyone in the NBA didn’t know about his superior skills before the start of the college basketball season, they didn’t have to wait long for those skills to be fully displayed. Certainly Simmons did not need the entire college basketball season to prove that he deserved to be the draft’s number one overall pick. Yet the freshman phenome continued to play throughout the rest of the regular season while putting his body at risk for no salary.

What made Simmons’ case somewhat unusual was that he did not play on an elite or even good team during his one and only year in college. LSU’s basketball team was so bad during the 2015-2016 season that they didn’t even make the 64 team NCAA tournament despite Simmons’ greatness. This is an especially unusual occurrence for such a high profile player considering that they usually gravitate toward the country’s best programs. But this inability to get his team to The Big Dance was apparently not enough to deter the 76ers from making him their selection.

As inconsequential as Simmons’ freshman year at LSU seemed to be, what came off looking even more worthless was the academic undertaking that he experienced at the university. Whereas the actual intelligence of the Tigers’ big man cannot be known, he appeared to be mostly disinterested in furthering any kind of education while at the school. Academics were so ignored by Simmons that he was initially benched by his head coach for most of the first half of a game against Tennessee. At the end of the regular season, it was revealed that he was not eligible for the Wooden Award (given each year to the most outstanding men’s and women’s college basketball player) because he did not meet the minimum requirement of having a 2.0 GPA.

One could make the case that Simmons should have applied himself more on the academic end so that his team would not be hurt by his being benched for nearly a half and so he would be at least eligible for college basketball’s top regular season award. But why was someone like Simmons who was so uninterested in furthering his education put into college in the first place when he has a separate skill (playing basketball) that he did so well? The answer to this question comes in the form of the NBA’s age limit that went into effect before their 2006 draft. As a result of this rule, players no longer could jump directly from high school to the NBA since the age limit said all draftees must be 19 years old and be at least one year out of high school.

If any recent NBA Draft selection demonstrated the absurdity of the league’s age limit, it would be Simmons. Here we have someone who barely even needed college basketball to demonstrate his skills, played on an average team and didn’t benefit from the opportunity to further his education in the slightest. But despite his academic struggles and his team’s mediocrity, Simmons still became the draft’s top pick. Now he will finally get paid for the considerable skills that he has for what he does best.

So what is the solution to avoid a situation like Simmons’ in the future? The NBA should remove its age limit and start developing young players in the Developmental League (D-League) if they aren’t yet ready to play professionally. This way, NBA ready high schoolers who have no interest in furthering their education (like Simmons) could focus more on what is most likely to be their career. If this sounds extreme or unworkable, consider that Major League Baseball does virtually the same thing by drafting players of different ages (including out of high school) and placing them into a minor league system. The NBA would be wise, not to mention fair, to allow promising high school stars the same opportunity that MLB provides. Sadly, this is currently not the case.

 

Trump Embraces Migration Restrictions of Both Rich and Poor

“A free and prosperous society has no fear of anyone entering it. But a welfare state is scared to death of every poor person who tries to get in and every rich person who tries to get out.”

-Harry Browne, former Libertarian nominee for President

This quote seems to ring especially true any time that politicians (or those who aspire to be) propose either immigration restrictions or economic protectionism. The reasoning for those proposals is quite obvious. Those who fear the migration of the poor to their country are concerned about the cost of lavish welfare benefits available for disadvantaged individuals (despite evidence that immigrants are less likely to use such benefits). Those who fear the fleeing of the rich do so out of concern that fewer tax dollars will be available to pay for extravagant government spending programs. Methods imposed by the state to dictate both inward and outward migration are often totalitarian in nature and stem from the fact that the society enacting those methods is not a free one.

Perhaps no recent federal level candidate has exemplified this way of thinking more than presumptive Republican presidential nominee Donald Trump. The desire of Trump to impose heavy-handed immigration restrictions as the potential commander-in-chief is well known to the American public. He plans on having a wall built that stretches the length of the US-Mexico border that Mexico is allegedly going to pay for. He very much wants to round up and deport the estimated 11 million immigrants living illegally in the United States. Certainly part of this desire stems from the fact that Mexicans (and other immigrants) are often poor and unskilled. Trump made this very clear in the speech he made while announcing his presidential run when he said, “When Mexico sends its people, they’re not sending their best. They’re sending people that have lots of problems, and they’re bringing those problems with us.” Many people who agree are fearful that the American taxpayer will have to foot the bill for the fact that many of these immigrants are from the lower economic class and therefore are not “the best” Mexicans.

But Trump’s desire to restrict voluntary migration doesn’t just apply to poor Latinos. It also applies to rich businessmen and wealthy organizations who may choose to do business elsewhere. Trump conveyed his supposed need to prevent this occurrence when the World Golf Championships decided to opt for Mexico City over the Trump owned course in Doral, FL (where it had been held since 1962) for the event next year. The billionaire real estate mogul then addressed this decision at a campaign rally in Sacramento, CA by saying, “They moved the World Golf Championships from Miami to Mexico City. Can you believe it? But that’s OK. Folks, it’s all going to be settled. You vote for Donald Trump as president, if I become your president, this stuff is all going to stop.”

It’s not clear what measures Trump would go to in order to prevent a private organization (like the PGA) from voluntarily moving one of its events out of the US. But his desire to use the power of government to stop such action reflects his fondness for economic protectionism. It is not much different from the plan once proposed by Senator Chuck Schumer (D-NY) to levy taxes on wealthy individuals after renouncing US citizenship. The bill, often nicknamed “The Ex-Patriot Act,” was motivated by the fact that Facebook co-founder Eduardo Saverin had renounced his U.S. citizenship. Clearly the legislation served as a last ditch effort for the American government to obtain some portion of a wealthy person’s money before they lost the ability to do so. It’s difficult, however, to see how an action like this could be directed at the PGA since they are not treated as an American citizen. Perhaps only Trump knows the strong arm tactics he would use to prevent something like this from happening.

It shouldn’t be surprising to anyone who has followed Trump’s campaign thus far in the 2016 election cycle that he would embrace totalitarianism espoused by both the left and the right. His need to vilify poor foreigners and prevent their entrance into the country delights many on the right. His desire to keep rich organizations and the individuals associated with them from exiting the country embraces a philosophy often championed by the left. Considering the fact that the Trump has backed extraordinarily expensive proposals such as a gigantic border wall to keep Mexicans out, a police state to hunt down illegals and some sort of unspecified government run health care system, it isn’t hard to see why he would want to prevent both entrances from the poor and exits from the rich. If a country rejects these types of expensive and expansive policies, our fear of these types of migrations across our borders will dissipate. Harry Browne was right; a truly free society has no concern over such things.

Government Unable to Know or Prove Intent

Professional golfer Phil Mickelson is back in the news again in regards to a 2014 federal investigation into an insider trading case. It appears that Mickelson owed high stakes sports gambler Billy Walters a considerable amount of money in July of 2012. As a result, Walters advised Mickelson to buy stock in Dean Foods Company as a result of an inside tip received by Walters’ longtime friend and top Dean Foods director Thomas C. Davis. The purchase netted Mickelson $931,000 after he sold the stock less than one month after purchase. The Securities and Exchange Commission (SEC) has now ruled that he must return the entire $931,000 plus another $105,000 in interest. Davis and Walters are named as co-defendants in the SEC’s civil suit while Mickelson is named only as a relief defendant. No further legal action will be taken against the golfer commonly referred to as “Lefty.”

Insider trading laws are typically difficult to assess. In this particular case, Davis appears to be the individual who provided the non-public information and Walters appears to be the one who received it. Mickelson is involved as a result of being a third party to the initial infraction having been told information illegally obtained but not actually receiving it from the original source (Davis). This is the reason for the more lenient status in the case for Mickelson and the harsher status for the other two men.

Many have wondered why Mickelson hasn’t been considered for a harsher sentence in this case. His being a sports celebrity, along with having considerable wealth, paints a perception of someone able to beat the system as a result of these advantages. But if Mickelson had already owned stock in Dean Foods and had been told not to sell by the same inside source, would the SEC still be able to file charges against him? Could they really prove that the golfer’s inaction in deciding to keep ahold of the stock he had was the result of this illegal tip? Of course not, because only positive actions can be ascribed to information no matter if it is legally obtained or not. This is one of the major problems in attempting to crack down on insider trading.

Another problem with insider trading enforcement is that it only seems to penalize those who succeed in the aftermath of their transactions. Had Walters been wrong about the Dean Foods stock and the value of it plummeted rather than increased, how would the SEC be able to levy any kind of penalty against Mickelson? After all, there would be no “ill-gotten gains” to return as a result of the purchase and selling of this stock. But if the activity of obtaining inside information is cause for legal action, then penalties for this activity should apply equally regardless of the result.

This isn’t the first time Mickelson’s finances have made headlines. In January of 2013 he eluded to the possibility of moving out of California due to the increase in state income tax for high income earners that accompanied a federal tax hike which targeted the same group. Mickelson then walked back these comments by saying:

“My apology is for talking about it publicly, because I shouldn’t take advantage of the forum that I have as a professional golfer to try to ignite change over these issues.”

However, his concern over the high tax rate appears to be real considering he sold his Rancho Santa Fe, CA home in early 2015.

Mickelson’s apology for discussing his personal financial matters publically highlights the fact that when higher taxes (or other unpopular government policy) cause individuals to move from a state, those motivations are typically not discussed in a public forum. For every public figure or celebrity whose state of residence may cause some degree of popular interest, many more individuals who possess varying amounts of wealth are certainly making decisions on where to live for many of the same reasons. While many factors play into the decision to move to or from certain states, tax rates are undeniably a major factor in weighing the costs and benefits of where to reside. Mickelson’s longtime rival and California native Tiger Woods admitted that he moved to Florida at the start of his professional golf career due (at least in part) to the Golden State’s high tax rate.

Mickelson’s insider trading case and his desire to move out of a high tax state show the inability of government to regulate self-interested financial decisions. Just as the government cannot punish stock market inactivity or insider trading that nets financial losses, they also aren’t able to know how many people are choosing to not live in their state as a result of harmful tax policy. Mickelson happened to have acted on his inside information in a way that caused suspicion and benefitted financially from his transaction. He also disclosed his motivations to move from a state in a way which criticized tax policy. It stands to reason that many times both insider trading and state migration due to taxes happen with relatively no knowledge being given to either the government or the public. The state at all levels is unable to legislate against intent despite its best efforts.

Legalization of MMA Finally Passes in New York

The long awaited legalization of mixed martial arts (MMA) in the state of New York is finally here. The New York State Assembly passed the measure on Tuesday, March 22nd by an overwhelming 113-25 vote. Governor Andrew Cuomo is all that would stand in the way of the sport’s legality and there is no indication that he will veto the bill since he added a provision for MMA in the state’s budget in January of this year. New York will now become the final state to permit the activities of the nation’s fastest growing sport.

To review, one of the major driving forces in MMA’s continuing prohibition in the Empire State was the political influence of labor unions. The Ultimate Fighting Championships (UFC), the biggest MMA organization in the country, is owned by brothers Frank and Lorenzo Fertitta. The Fertitta’s other business venture, Station Casinos in Las Vegas, uses a non-union culinary staff. As retaliation for this, the New York headquartered umbrella organization (Unite Here) for the culinary union pressured the union bankrolled politicians in that state to keep MMA illegal. The official ban had been in place since 1997.

Perhaps this legalization of the country’s fastest growing sport came not as a result of any ideological shift, but a simple desire to open up a new market within the state. The tax revenue generated by an MMA event would be considerable and it would be difficult for New York politicians to pass that up. This especially becomes the case since the state plans to tax Mixed Martial Arts events at an even higher rate than boxing or wrestling matches. Add this to neighboring states like New Jersey and Pennsylvania (along with all other states) being able to host these kinds of fights while New York sits on the sidelines and you are bound to create a strong desire among residents to experience what they alone are missing out on.

But another factor may be the declining membership and power of unions in America. The percentage of American workers who are union members has been declining steadily since the mid 1950’s. New York’s holdout on MMA legalization was largely a result of the influence that unions still have in that state. But now that even New York has caved while Station Casinos’ culinary staff is still non-union, that influence has clearly declined. The lifting of the state’s MMA ban certainly is a victory for those who view the decline of union power in America as a positive development.

So while the unions have lost out, other entities will benefit. Private businesses will obtain more revenue through transactions. Government will obtain more revenue by taxing future MMA events. Fans of MMA in New York will be able to take part in the festivities. MMA fighters in the state will now be able to participate in the sport legally and safely since it will no longer be driven underground by the previous ban. In the end, the benefits of legalizing this activity in New York far outweighed the costs of making the union bosses happy. Look for New York to host at least one MMA event before the end of 2016. The Empire State has now joined the rest of the nation in finally welcoming a widely accepted sport and resisting the pressures from organized labor to keep it illegal. To the victors will go the spoils.

 

Louisiana Budget Crisis Highlights Benefits of LSU’s Resistance to Subsidies

The budget crisis in Louisiana is so bad that it apparently threatens the upcoming college football season. This is according to the state’s new Democratic governor John Bel Edwards. The current yearly budget deficit has reached $940 million. The situation is so dire that higher education in the state faces the realistic possibility of running out of money and taking college sports with it.

Even though all Louisiana state funded colleges are faced with this harsh reality, the focal point of much of the public’s scorn is directed at the possibility of no LSU football this coming season. Much of the old south is Southeastern Conference (SEC) country and college football commands more attention there than even professional sports. Thus, the emotion that comes with the threat of not having LSU football looms much larger in the minds of many Louisianans than the threat of cancellation of other school’s athletics or even the possibility of academic shutdown on campuses. In the land of the SEC, college football will grab headlines over most other issues. This is especially true when its very existence is being threatened.

Upon closer inspection of Louisiana’s state budget, one can see that a major culprit for the deficit has been corporate giveaways. Under former governor Bobby Jindal’s predecessor, money given to the six largest recipients of government subsidies totaled $200 million. But under Jindal, that amount grew to $1 billion. Combine this with the state’s 400 other handouts, plus the raiding of rainy day funds to cover shortfalls and you have a recipe for a budget disaster.

So in order to put Louisiana’s fiscal house back in order, Governor Edwards has proposed one of the largest tax increases in state history. Taxes on cigarettes, alcohol, rental cars and other items are due to be increased as a part of the governor’s proposal. But given that Edwards is facing a legislature controlled by Republicans, many of these tax increases appear unlikely. A bipartisan compromise will probably be reached combining some tax hikes with some spending cuts.

But of all the things to threaten to shut down, why did Edwards target higher education and college sports? The answer lies in an old political trick called Washington Monument Syndrome (or sometimes Mount Rushmore Syndrome). This is a phenomenon where a government facing some sort of revenue shortfall or budget crisis will cut government funds which cause the most visible pain. Once the public witnesses this pain, opinion shifts in a direction that the government desires it to shift to. In this case, the state’s governor wants to pass certain tax increases. If he doesn’t get what he wants, college football could be cancelled statewide. In the state of Louisiana, few actions would cause more pain and public outcry than the cancellation of a college football season. Thus, a public official will use this to threaten the people he supposedly serves in order to pass his desired legislation.

The peculiar thing about LSU specifically is that they are one of only seven Division One programs which don’t accept state subsidies (the others being Texas, Ohio State, Oklahoma, Penn State, Nebraska and Purdue). In fact, LSU’s athletic program generated so much revenue last year that it transferred over $10 million to the school’s academic program. Clearly LSU football can survive without taxpayer money, since they do so already. Again, cancelling of the state’s biggest college football program is simply a scare tactic used to further a political agenda. After the aforementioned compromise is most assuredly reached between Edwards and the legislature, politicians from both parties will probably point to LSU’s football team taking the field in the fall as some great political achievement even though the school’s athletic department didn’t need or spend their money in the first place.

As for the rest of the state of Louisiana’s higher education system, this sad state of affairs is an unfortunate lesson in what can happen when government assumes control of an institution. The competency of that institution will be subject to the whims of those who control that government. Any budgetary failings of public officials who dole out this money will inevitably affect those that are so reliant on it. If college were independent of government, then the influx of money would not be based on an appropriation from a government but the ability to provide a service (education in this case) to the public. After all, there is no imminent crisis in Louisiana regarding the sale and purchase of food, electronics or automobiles. This is because people generally spend their own money on these things without intervention from the government. If education were treated like any of these things, then it would be independent of government failings and different educational institutions would be sinking or swimming based on their own merits. But sadly, these colleges and universities will likely not learn their lesson and continue to look for funding from the very organization that is causing their current laundry list of problems.

Conventional Perception of Leadership Driving Negative Opinions of Cam Newton

The two week lead up to the Super Bowl typically gives enough time for those in the sports media to dwell on seemingly every possible angle before the big game. Usually one or maybe a couple of stories dominate the headlines and sports talk shows. Among those big stories this year seems to be the constant asking of why such a large portion of sports fans across the country hate Carolina Panther’s Quarterback Cam Newton. There appears to be no one clear answer, though several theories persist.

Newton is frequently seen in celebratory mode after scoring touchdowns. His dance routines following scores seem to be what rubs so many people the wrong way. Celebrating in this way is thought to be arrogant and unnecessary by those who criticize him. But if we dig deeper, we see that there are many more layers to Newton’s dislike than merely attributing it to his post-TD rituals.

Unsurprisingly, race has been tossed out by some as a reason for the abundance of Newton’s disfavor. According to this theory, many people don’t like the way Newton conducts himself in celebration because of certain stereotypes that still surround blacks in America. A somewhat related claim has also been made about the urban culture (which applies to some, but not all American blacks) that Newton represents and how it is something that the rest of America has difficulty relating to. But both of these claims fail to address why there isn’t similar disdain for wide receivers and running backs who often dance and express an abundance of emotion after scoring touchdowns. After all, not only is the NFL roughly 2/3 black, but the wide receiver and running back positions are dominated by blacks to an even greater degree. Why would race and culture fuel a resentment of Newton, but not other players who are so frequently of the same race and background?

Much of the answer to that question lies in the position in which Newton has had so much success. Quarterbacks are often referred to as “the face of their team” and even more often as the team’s “leader.” Different standards are applied to leaders than those they lead. Many people prefer leaders to be more reserved emotionally. This gives the perception of a more “grounded” leader who is thought to not let his emotions get the best of him. While others may be off dancing and celebrating, the leader is imagined to be calmer and more level headed in order to deal with the added pressures that come from his job. Thus, when these people see Newton showing the kind of emotion he shows, it flies in the face of what they perceive leadership to look like.

The image of a less emotional and more stoic leader doesn’t just persist in the sports world, but in Hollywood as well. In the climactic scene of the 1995 movie Apollo 13, when it first becomes apparent that the main characters have made it safely back to earth, seemingly everyone in the movie seems to be erupting with emotion by clapping, shouting, hugging, or doing a variety of all three. However, the NASA flight Director (played by Ed Harris) doesn’t do any of these things. He shows a bit of relief as he slumps down into his chair exhausted. This character’s lack of emotion is not by accident. The film’s director, Ron Howard, knew the way he wanted the character to act at the moment that those he led were celebrating. His subdued emotion exemplifies his status as a leader that much of the viewing audience could relate to. Many other movies also portray a leader with these near emotionless characteristics that remain even in times of celebration for other characters that they supervise.

All of this leads us back to Newton and why people are so uncomfortable with the way he celebrates success. Here we have a quarterback and leader of his team showing just as much if not even more emotion than that of the players he leads. Those who don’t like this characteristic of Newton will also find it unsettling that his team has been wildly successful this year despite his unconventional leadership style. If Carolina were a bad or mediocre team, then the narrative would be that Newton could have more success if he were less concerned with dancing and celebrating and more concerned with helping his team win. Well, despite all of that dancing and celebrating, Newton’s team has won more games than any other NFL team this season.

Thanks to Newton, the public may be forced to change the way it perceives NFL quarterbacks and the dynamics of leadership that they provide. Rather than being seen as a negative or a detriment to their team, celebrating in the way that Newton does tells us that leaders can show this kind of emotion and still be considered elite in their position. Future NFL quarterbacks displaying this kind of flair may be favorably compared to Newton rather than being maligned as unserious distractions. But it’s difficult to be among the first top tier quarterbacks to exhibit this kind of unconventionality. Those similar to Newton who come after him might have an easier go of it.