In Sport, Who holds more value: the owner or the player?

6 months ago Chad 0

This invisible alien works in education with learners who are often fanatic about sports. The one sure complaint, however, sure to be voiced in any given week is the often lamented; ‘football players make too much money!’ I try and explain that there is a lot of cash in the game from ticket sales, sponsorship deals and TV rights. If their favorite players don’t get paid the millions they do, that cash would simply slip, trip and fall into the pockets of their already gazzilionaire owners. In sports, players hold the most value. But they often pay me no mind and carry on saying what they have been saying all along.

Steph Curry Versus The Glazers

Curry

Fans complain about Steph Curry or Eden Hazard playing poorly or playing well and situate the performance of the team squarely on the players. The players in team sports, this argument goes, is ultimately responsible for success or failure.

Then I’ll listen to Leyton Orient football fans in the East of London, the Arsenal Fans in the north of the capital or Philadelphia 76er fanatics, curse their owners’ incompetence and unwillingness to spend, and it becomes hard to situate blame, or credit for that matter. Who holds more value for a sports team: the players or the owner? Who is more responsible for its success and failures?

Working, Working, Working, ain’t you…

Consider a Nike factory in Indonesia, if you will. Low skilled, lowly valued women sewing garments and shoes. They get paid a few dollars each week, before they are shunted off back to their villages. It would seem a pretty clear-cut case here that the huge multinational corporation and its owner would be the more valuable party in this enterprise.

But of course, if Nike didn’t make the billions they do by under paying these women, they wouldn’t have a rising share price and the money required to invest in new factories and products. So who is more valuable: the owner or the worker? Is there more value in labour or capital? To fully understand this we must first take a small detour into Marxism and the Labour theory of value.

What is the ‘Labour Theory Of Value?’

The labour theory of value was an early attempt by economists to understand if the owners of wealth (in this case, sport team owners) were more important to an enterprise than the people who worked for them (in this case, players). They sought to explain why goods were exchanged for certain prices on the market. It suggested the value of a commodity could be measured objectively by the average number of labor hours necessary to produce it. The best-known advocates of the labor theory were Adam Smith, David Ricardo and Karl Marx.

Breaking Down The ‘Labor Theory Of Value’

Exchange values were a serious puzzle for early economic thinkers. Why does a book cost £5, for example? If a horse cart traded for 20 ounces of gold but a pair of shoes only traded for 2 ounces, what made the horse cart 10 times as valuable as the shoes? The answer, according to the labour theory, is that the horse cart took 10 times as much average labour to produce as the shoes.

Advocates of the labour theory believed that if two goods are exchanged for the same price, they must therefore have the same value. Value was determined by inputs, chiefly labour.

Labour Theory and Marxism

The labour theory of value interlaced nearly every aspect of the Marxian analysis. Marx’s best economic work, “Das Kapital,” was almost entirely predicated on the tension between capitalist owners of the means of production and the labor power of the working class.

Marx was drawn to the labour theory because he believed human labour was the only common characteristic shared by all goods and services exchanged on the market. For Marx, however, it was not enough for two goods to have an equivalent amount of labour; instead, the two goods must have the same amount of “socially necessary” labour.

Marx used the labor theory to launch a devastating critique against free market classical economists in the tradition of Adam Smith. If, he asked, all goods and services in a capitalist system are sold at prices that reflect their true value, and all values are measured in labour hours, how can capitalists ever enjoy profits unless they pay their workers less than the real value of their labour?

 

Players Play, Owners Pay

The NBA has an interesting take on the value of a player versus that of the owner. Their most recent collective bargaining agreement gives 49% of all basketball related income to players with the remaining 51% scooped up by the owners.

It is generally accepted that the two things a team MUST get right to win are excellence at ownership and excellent players. A good General Manager, an excellent coach, medical staff and backseat personnel are also important for a variety of reasons. But the owner and players are kings. Assuming an owner can pay the bills, and the players are terrific, the team will win.

The Owner

The team owner sets the direction of the club with his investment and leadership. He sets the ethos that drives the team forward, even when he/she is absent because, apart from a few isolated cases, they are the ultimate decision makers at the club.

Generally speaking, the “sporting” people know a lot more about football than the owner does. The owner, on the other hand, knows business better than the football people.

The argument is that in modern sport especially, the owner is king and not players because the money involved is much larger; the complexity of the game is far greater; and there’s just so much more “business” to the the game, that the owner and his business apparatchiks have become even more critical to the team success than they have ever been.

A Roman Gladiator

Take Roman Abramovich at Chelsea Football Club. His investment in the club since 2004 has exceeded a billion pounds. He has been ruthless with managers and players. Reports suggest he has paid out £71 million just for compensation on axed managers. The winning ethos at the club has been all his, the argument goes. It has been reported that, “Chelsea’s parent company Fordstam owes Abramovich £1.053 billion in loans according to the latest accounts, and rising.” As for the situation at Manchester United, the Glazer family have extracted £1.073 billion out of Old Trafford by ways of interest payments, share sales and dividends.

During Roman Abramovich’s time at the club, Chelsea has been the most successful club in England following their latest Premier League title last week. Chelsea have won a total of 14 trophies since 2003, with Manchester United closest on 13.

Players come, players go, the argument goes, but a strong, stable ownership, focused on being successful holds the most value for a sporting franchise or team.

The owners of sports franchises operate much like the CEO of a major corporation. In a major corporation, the actions of many employees help produce results. In a sports franchise the players, coaches and talent evaluators determine to large degree the day-to-day success or failure of the team.

However, just like a CEO, sports club owners wield enormous power and have the ability to make wide-ranging decisions that have either a positive or negative impact. The club’s owner sets the strategic direction of the team and the overall tone of the organization. As such, a sports team owner might be the single most important individual when it comes to determining the level of a team’s success.

A  Kraft -Y Fellow 

One of the most difficult challenges facing American sports club owners these days is the presence of a salary-cap. In the NFL, this has led to an era of parity in which many teams are good one year and terrible the next. The New England Patriots, under owner Bob Kraft, are one of the exceptions to this rule.

Kraft has provided stability within the organization by maintaining Coach Bill Belichick and the team has spent its money wisely. Despite the high level of player turnover, which is common in the NFL, the Patriots have managed to produce winning teams year after year. In 1994 when Kraft bought the team, the Patriots ranked last in the NFL in both attendance and revenue. Since that time, the team has sold out every single home game, and the franchise that was last in revenue is now worth in excess of $1.2 billion by Forbes. The Owner, it seems outranks the players in adding value to a team’s success or failure.

The Messi Truth

Lionel Messi has won so many titles, that I’m sure he’s investing in a new trophy cabinet as we speak. His football club, Barcelona FC, has been living through a golden period in the last 12 years or so.

Lionel Messi’s 30 Career Honors

La Liga 04/05, 05/06, 08/09, 09/10,
10/11, 12/13, 14/15, 15/16
Copa del Rey 08/09, 11/12, 14/15, 15/16
Supercopa de Espana 2005, 2006, 2009, 2010, 2011, 2013
Champions League 05/06, 08/09, 10/11, 14/15
UEFA Super Cup 2009, 2011, 2015
FIFA Club World Cup 2009, 2011, 2015
Olympic Gold Medal 2008
World Youth Championship 2005

Some truly magical football has been married to cold, hard success. Alongside Messi, the team has been blessed with the mesmeric artistry of Neymar, Suarez, Iniesta and Xavi, among others. Every manager, player and supporter in Europe knows that the Champions league title goes through Barcelona. But who deserves most credit for their success: the players or the ownership of the club?

This is important because it’s more than just dominance on the pitch: Barcelona dominates the ideals of the game. Their open style and precision passing play is the type of stuff that every football fan loves to watch. They are truly the type of team that every supporter wants their team to resemble.

Even Real Madrid fans are yearning for their team to be more like Barcelona, even though they hate the Catalans. So what makes Barcelona such a great representative of world football? Clearly, it’s their winning and the style with which they do it, but how does that come about?

On most levels, we can put it down to the players. Without the ridiculous abilities of Messi, the genius of Iniesta, the precision passing of Xavi, the goal scoring prowess of Suarez and the hard-nosed defending of Puyol and Abidal, this obviously wouldn’t have been the same team.

But is this just a collection of great players? And if it is, should the owners be given ultimate credit for putting the team together? This is an impossible task in some ways, but the invisible aliens, believe that the players carry more value. Yes, it is true that without the owner’s money and wisdom, developing their famed La Masia academy, this doesn’t happen. The owners installed their transformational manager Pep Guardiola and gave him the remit to produce thrilling football. But ultimately, the players are the worker bees. Without them, there is quite simply no honey.

Guardiola’s success as a manager in that Barcelona team was undeniable. But there is one question that is a lingering knock on Pep’s managerial abilities, one that stops some from considering him an all-time great: couldn’t anyone do this with this collection of players currently in the blue and deep red? His relative failure at Bayern Munich and Manchester City seems to confirm this skepticism? It’s a valid question. After all, with Messi being considered in discussions alongside Pele and Mardona; and Iniesta and Xavi having led their Spanish side to a World Cup and European Cups, the deck seems stacked in their favor. In team sports, the players are king.

Air Jordan Grounded

Michael Jordan changed the face of basketball as a player. Basketball had long been a big man’s game. Jordan was in direct stylistic contrast to a league that was predicated on pounding down low, and the fans loved him for it.Jordon

He accomplished this with superior athleticism, but also superior technique. From a standstill, he would often toy with his opponents, feinting with his pivot foot like an accomplished swordsman. His planted foot was attached to the floor, making it easier for him to explode away from his defender at just the right moment.

As a player, he impacted his team and the sport of basketball in a way no owner ever could. This is similar to the impact of Messi, Maradona, Tiger Woods and Usain Bolt (albeit in individual pursuits).

As an owner of the Charlotte Bobcats, Jordan has been an ugly failure. The new reality for Michael Jordan (a man who as a player is still regarded as the GOAT(greatest of all time) is forced to hear whispers that he’s a goat as an NBA owner. As a player, Jordan orchestrated the greatest season in NBA history. As an executive, he now owns the worst.

The truth, however, is despite his below par performance as an owner, his impact on the team can never match that of his average players. Because his determination, business savvy and money pales in comparison to the harsh reality that the players he pays so handsomely will ultimately determine if the team is successful or not.

The Case of the 2015/14 Leicester City and Chelsea Football Clubs

 

Last season, Leicester City was the most unlikely Premier League winners, perhaps ever. On the flip side of that coin, Chelsea FC, the defending champions finished a lowly 10th. How did that happen? Ownership didn’t change at either club. The players remained the same (though Leicester City had a new manager). A team that barely survived relegation then went on to win the league by ten points.

The owners surely played their part but the value of the players in both teams’ seasons is undeniably the key factor. The Chelsea players, depending on what you choose to believe, refused to play well for their manager, suffered a lack of form and confidence, or did their best, which wasn’t good enough. Regardless of what you think, the players’ outsized impact on winning is clear.

The owners invest, they hire managers; they create an ethos for the team. But if the players don’t respond; if they down tools; or if they are bloody brilliant, their independent agency will dictate team success, or for that matter, failure.