Russ Roberts

Matthew Futterman on Players and the Business of Sports

EconTalk Episode with Matthew Futterman
Hosted by Russ Roberts
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The Right Practice... Faster, Higher, Stronger...

Players.jpg Fifty years ago, many of the best players in the National Football League took jobs in the off-season to augment the salaries they earned playing football. Matthew Futterman of the Wall Street Journal and author of Players talks with EconTalk host Russ Roberts about how much football and so many aspects of sports--from tennis to golf to apparel to broadcasting to Olympics--has become incredibly more lucrative. Futterman shares the insights from his book and how all that money has changed sports, the athletes who compete, and the fans who watch.

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0:33Intro. [Recording date: July 6, 2016.] Russ: So, your book is a fascinating and incredibly entertaining book of a real revolution, how a sleepy part of our lives called 'sports' became a multi-multi-billion dollar behemoth, sometimes a monster, sometimes something very glorious. What changed? Obviously a lot of things changed. But some time between the 1950s and today, and it came at different times for different sports, but something changed. And it runs through your book. What is that? Guest: Well, I think what really changed was the athletes, the people who were the real subjects of the book. That's why I called it Players. They really started agitating. And they started pushing to be paid as professionals. And to be paid what they were worth and what you would pay the so-called sort of star of the show. And once they started being paid as professionals, they got enough money to be able to work harder and train harder and get better at what they did. And once they did that, the products got a lot better--meaning the shows they were putting on. The performances. And more people wanted to come see them; and more people wanted to pay money to put them on TV (television). And the whole system sort of snowballed from there. But what it really starts with, was, paying the labor force what it deserved to be paid and valuing it in the way it deserved to be valued. And that sort of seems to have been the thing that really unlocked the box of sports. I think what's been said for a long time, was always said for a long time, was that TV made sports. And, you know, that is true: to some extent TV supplies the lifeblood, is really the lifeblood of sports. But sports had to become good TV before TV could make sports. Russ: Yeah. That's a fantastic insight. If you had asked me before I read your book, 'Why do athletes make so much money today compared to, say, 1950?' I would have said something like, 'Well, TV came along; it gave them exposure, allowed them to entertain a lot more people than they could have before'--and eventually of course it went global, through the Internet--'and so that opportunity to be a part of that much larger market i s why sports got bigger. And a bunch of labor-relations, decisions, strikes, etc. gave athletes a bigger share of that pie over time. And that's really the story.' And, what I learned from your book that I found so interesting was to appreciate that synergy you just talked about--how the--I mean, it's obvious, we all know that when you can make $10 million dollars playing something rather than $25,000, more people are going to try to do it and to do it well. But I didn't think enough about how the product itself changed. You go back and look at basketball players in the 1960s, and they look funny. Guest: Yeah. And I always tell people, when we start having these kind of conversations, because in sports it inevitably gets into a sort of debate and argument-- Russ: Everybody's an expert-- Guest: Right. I always tell people--and everybody should be an expert. That's one of the things that's great about sports is, I don't necessarily know more about it than anybody else does. I write about it a little bit more than other people do, and probably think about it too much for my own good. But, you know, what I tell them is, 'Go back and watch a Super Bowl from the 1980s, a game that you thought was great from a generation or two ago. And tell me if you can sit through it.' Because it's slow. The equipment is strange. The players aren't moving very quickly. And, as you said, they look funny. Completely different bodies at work there. And that's not--the species hasn't changed. Evolution didn't suddenly change over the last 30 years. We know that didn't happen. What happened was training and practice and all these things that people didn't have time for. Because in the 1950s, Arnold Palmer was a paint salesman in addition to trying to become a professional golfer. And Roger Staubach was selling real estate in the off season when he was the starting quarterback of the Dallas Cowboys. All these things that took up people's time rather than things like, you know, watching what you eat and going for a run and going to the weight room and doing all kinds of other exercises, and sleeping, for instance. Things that are all incredibly important to what we know as sort of modern athletes. And that's where you get Steph Curry and that's where you get LeBron James. And any number of other athletes. It doesn't just happen.
6:21Russ: But I think--but to take your point further, I think that's only part of the story. And that's the part I understood, that's the part I knew; and certainly as an economist looking at the incentives, players want to play longer. When you can get a decent, multi-million dollar contract in your late 30s, obviously you have an incentive to stay in shape and not get overweight, and to keep your body healthy. That part is pretty straightforward. The part that I didn't appreciate is the part that it's not just that the bodies are different--which, you know, it's the difference really--LeBron James is almost a comic book character in his physique compared to--well, he is, compared to--a 1950s basketball player looks something close to me. And I don't look so good. So, that's part of it. But the other part of that is, when you watch that Super Bowl game from 1980, or better, 1970, the camera angles aren't so interesting; replay isn't as interesting; and most important--and this is what your book I think really brings out--we did not have the emotional connection that we have today. Now, to some extent that's an old story. Obviously , people loved, they loved Babe Ruth; they loved Ted Williams; they loved Wilt Chamberlain, and Bill Russell. They loved these older figures. They were stars; they were celebrities of enormous proportion. But the marketing of both the player and the product, the game itself, radically changed in the last 20-something years. Correct? Guest: Yeah, I think that's fair to say. Certainly, you know--you might stretch it out to 30 years, in the 1980s and then the early, in mid-1980s with the onset of Michael Jordan and the boom of Nike. Because then Nike really sort of set the tone for marketing, in the modern sports world. I think that's fair to say. Russ: Yeah. And that's a mystery to me. And we're going to come back to that. But just the idea that you wanted to package players--you know, a lot of people make--you talk about different myths about sports popularity. The standard myth about the NBA (National Basketball Association) is that Magic Johnson, Larry Bird came along; their rivalry was exciting. They got to face off against each other multiple times. And then Michael Jordan took it to another level. And other sports have struggled to imitate that success; but that's the secret. And that is part of it, obviously; but as you point out in other sports, other things happened. Football being the most interesting example, for me. I would have given a similar story. But in that case, rule change played a huge part. So, talk about that. Guest: Yeah. Well, the NFL (National Football League) in the 1970s, we talked about it being hard to watch: it was really hard to score in the late 1970s. You had years where the point totals, where teams were scoring, combined, 20 points a game. And shut-outs were becoming common. And the Rules Committee, the people that were running the NFL, just realized that this just wasn't going to work. That people wanted to come to games, and they wanted to see scoring. So what they did was they changed the rules to open up the field to make it easier, essentially, to move the ball down the field. And what's the easiest way to move the ball down the field? It's through the forward pass. But you couldn't do that under the old rules: the absence of linemen couldn't extend their arms when they were supposed to be blocking. So you could imagine trying to block J. J. Watt today without extending your arms. That was one real problem. The other problem was the wide receivers could essentially be faulted on [?] scrimmage as they moved downfield. And that rule changed, where you couldn't have contact beyond 5 yards. And that really opened things up. But what the NFL realized also was the attention was going to have to shift from the sidelines to the fields. And this has always been the League of Lombardi. And then it became the League of Montana. So, it went from being a coach's league to a quarterback's league. And that's what we see today. When you think of the NFL today, you think of Andrew Luck and you think of Peyton Manning--although you don't think of Peyton Manning any more. Russ: Yeah; I think about Tom Brady [?]-- Guest: [?]-- Russ: Just FYI (for your information). Guest: Yeah. Russ: Just so you'd understand. Guest: Okay. Okay. But you know that's--the quarterbacks run--this is a quarterback's league; the quarterbacks run the league, is the star of the show. Russ: I think-- Guest: And that is not in any way an accident. It's because that's the game they made. That's the game they created. And if you believe in markets--and I mostly do--certainly that's the game that people like and that's the game that people want to see. Russ: Yeah. I think, you know, it's one thing to say that the rule change did this, or that the League has promoted quarterbacks in various ways, which they have. But the obvious way to see it is that very rarely does a team with a mediocre quarterback go very far in football these days. Everyone understands that a quarterback is a really important position. It's not really up for debate. And of course The Blind Side, Michael Lewis's book, is about the fact that protecting the quarterback is really important. Among other things. Guest: Yeah. What I think is really important is that the NFL sort of, the rule changes were very deliberate. But then you had a coach like Bill Walsh, San Francisco, could really sort of see where this was going. And he was the first one to really take advantage of the rule changes very quickly and understand how the game was going to change. And he not only adapted how the team was going to play on Sundays, but he adapted how the team practiced. He stopped having contact. He stopped wearing down his players. He wanted them fresh and he wanted them fast and he wanted them speedy and he wanted them healthy. So, you can see how a few rule changes--when you change the emphasis of the game--how the people who are really thinking about it, quickly, and thinking ahead and thinking about the impact of these things, how they can adapt. And what I really wanted to do with this book was I wanted to sort of show how the decisions and the money, the things that take place off the field, how it really affected what happened on the field, and how that's what really made sports. Nothing happens by accident any more. And certainly that's true in sports.
14:03Russ: This happens in every sport, to some extent. If you look at baseball, 1968, I think Carl Yastrzemski led the American League with a 300 batting average, but it was really 299-something and they rounded it up. Bob Gibson-- Guest: I [?] that was the year, the year of the [?], right? Russ: Bob Gibson's ERA (Earned Run Average) was I think 1.12. And so they realized, oh, this wasn't good for the game. It was good for pitchers. Not so good for batters. And really bad for the game, because people like scoring. So, what did they do? They lowered the pitcher's mound. And I think they also, subtly in various ways changed the strike zone: you know, it's nominally from the knees to the armpit--it went from the knees to the shoulders and then they changed it to knees to the armpit; it's really waist, almost, to the nipples-- Guest: Waist to the bellybutton. Russ: It's a very narrow zone, which makes it much easier for batters. And so, that's what baseball did. Basketball introduced the 3-point line. And those three sports--football, baseball, basketball--all became much more offensive and much less defensive. And other sports, though, didn't change. So, like, the most obvious one is soccer. So, soccer--a lot of games end zero-zero. And Americans find that incredibly frustrating. I don't know if there's something wrong with this, right with this; but to me, part of the challenge of soccer becoming more popular in the United States is the fact that scoring is relatively rare. Guest: Well, I do think that--I think there is--yeah, scoring is somewhat rare. And I will admit that as I get older, I find myself much more drawn to the sports where it's harder to score. Russ: Yep. Guest: I find myself--I watch a lot of NFL, I [?] everybody does--and even though it is getting increasingly hard to score in baseball, I find myself watching less baseball just because the ball is in play so rarely these days and I think it's become increasingly boring. But, to get away from that and to get back to your original question about soccer: Week in, week out, the soccer games that are played at the top professional leagues in Europe are also pretty much unrecognized both from where they were 25 and 30 years ago. And if you talk about them not changing, maybe the size of the field is the same and the goals are the same size; but it's a completely different ball. The fields are much more manicured--it used to be maybe a couple of teams would have beautiful fields and everyone else would be playing on sort of muddy, rutty grass. Now everyone has a field that's sort of like a pool table. The fields are watered down before to make them even faster. They have made tremendous changes to speed up those games as well. And they score goals. I mean, there are the occasional 0-0 games; but you know, you much more often--and I would encourage anyone who has sort of a knee-jerk reaction against soccer at this point to watch this, beginning in the Fall, these English [?] games on Saturdays and Sunday mornings at NBC (National Broadcasting Company), does such a great job of showing. And it's the real challenge, actually for the soccer league in the United States is not so much competing against other U.S. sports--it's competing against the great soccer from Europe that's now, because of media, so available to all of us. But those games are, like the NFL they are, you know, they are fast; there is scoring; and also completely almost unrecognized both from where they were a generation ago. Russ: Well, and I think there's just a huge increase and casual interest in the United States--it's probably just because of the availability, and of course, but that's a simultaneous phenomenon: it's available because people are interested. So, I think it probably will continue to grow. I don't know if it will ever get into the pantheon for Americans of major sports, but it's sure getting close, even if it's just following European teams. There's a lot more passion out there. Guest: Yeah. The smart people that I talk to, they sort of think that in 20 years the big sports in the United States will be the NFL, the NBA, and International Soccer. Mainly [?]--whether it's [?]--which are, whether it's [?] familiar or [?]--probably in the Spring the Leagues that are in the best position, the richest at this point, and will probably for the foreseeable future continue to have the best players, although with this whole Brexit thing, that's sort of a bit thrown up in the air. Russ: Yeah, it's up in the air. Guest: Itself. But yeah; but that's it; and to their credit, they've--that didn't happen by accident, either. I mean, early--late 1980s, early 1990s, English soccer was a mess. The stadiums were terrible. They were dangerous. They were dangerous and dirty and unpleasant-- Russ: For sure. Guest: And they were not the--it was not the haven for international soccer players to go get rich. The players went to Italy at that point. Italy or Germany. Those were really the top leagues. And then there was a lot of investment in England, investment in the stadiums. And so reformation of the top League. And investment from, you know, media companies, Sky specifically. And once they had the money, they were able to make these, make [?] they want professional move forward; the players were able to just get much better. Not quality--[?] saying that quality was the [?] improvement. There was, like I said before, this subtle rule and equipment changes that has really made the product much more appealing. Russ: What's different about the ball? Guest: It's a much livelier ball. It's almost like a volleyball now. It's smoother. The old ball that Pelé was playing with, with all the black and white hexagonals on it, it was sewn together in all those different pieces--hand-sewn together in all those different pieces. It absorbed water, so that if it ever rained, all of a sudden that ball was turned into a lead bullion. The ball now is, it's much more--it's much more synthetic, when you get down to it. And the grooves are much more [?], it flies, um, faster and it flies much more--much more unpredictably. So, you know, it can bend much--players can really bend it. And it moves in the air. And that's why you see those crazy shots that really sort of spin around a wall and up into the corner of a goal. Russ: I just want to say, though: I do think that Pelé would be a successful player today. Even if he didn't train harder or have more time. He was--and similarly, a lot of the players we are talking about, and in ages past, could compete under today's rules, today's fitness. But I take the point. And it's a good point.
21:45Russ: I want to come back to something you said about Bill Walsh, because I think it's an interesting example about how we change training and how we change practice. One thing it seems to me is the case is that, you know, a lot of sports in the past, because it was so uncompetitive, because there was so little money at stake, innovation was kind of rare. People were content to go with certain cultural rules of thumb about how you prepared for a game or how you prepared your team. And there wasn't a lot of innovation. And one thing I've noticed since more money is in sports is that being stuck in your ways is a lot more costly. I like to think that racism is down in sports; and one of the reasons is that it's too expensive to be a racist. And, as sports has gotten a lot more profitable it has reduced things like racism, but also things like, 'Well, that's the way it's always been done.' So you see tremendous innovation in basketball. You see it in football. You, maybe a little bit in baseball. You see it in some ways in the range of pitches that a pitcher will now have that's required to be successful has gotten larger. And certainly training has changed across all sports; and it's not enough to say, 'Well, that's the way--I don't lift weights because that's bad for baseball.' Nobody thinks that any more. And a lot of those cultural norms changed as the game got more profitable. Guest: Yeah. It's not just--and it's training and it's also sort of player evaluation, too. That is--I mean, that is probably the real--the real innovation that's happened is the hunt for the secret data. Russ: Yep. Guest: That the thing, the hunt for those important numbers that will tell you who is better than whom. Russ: Yeah, for sure. Of course, that's me. Guest: Who is better than who. Russ: The availability of data has made being a fan so much more entertaining, for those of us who are, you know, statistically oriented. And I think, again, for some sports-soccer being an obvious example--you don't get that profusion of statistics that you get with baseball. And I think baseball, for all its flaws, has that appeal, that I think will keep it going; although I agree with you, it's too slow. And I think these attempts to "speed up the game," which have not been very successful: I think they need to do something a lot more radical. And I think they eventually will. What do you think of that? Guest: Yeah. I think [?] they are going to be forced to. I just think that--I think that very few sports have the luxury of asking fans to spend 3 hours with them these days. Football, you do, but there's only 16 games in a season. So, and there's a lot of games going on at one time, and people are playing Fantasy, so there's a lot of distraction going on these days. So it's sort of, it's been able, it's been able to work for them. But baseball is asking fans to pay attention for at least 3 hours, give or take a couple of minutes, 3 hours-- Russ: yep-- Guest: at least 3 hours, 162 times a year. In today's world, that's a big ask. Russ: But it's working--it's more than that. It's just what happens on the field. It needs to be sped up to-- Guest: It's unfortunate, there are so many simple things that can be done that they seem averse, that they seem averse to doing. I mean, the first thing is, you just need to get rid of noun conversations[?]. You get rid of those. Russ: Yup. Guest: If you want to change pitchers, you know, signal--manager stays in the dugout, stand up on the top steps, as you come out, you come in, and they give them the pitching, and the change happens. Just like that, you can shave several minutes off the game. They've done, they've gotten better about not letting people step outside of the batter's box. They've gotten better, a little better, about forcing pitchers to pitch. They could do much more. That is the one thing, if you watch a game from 50 years ago, it's striking how quickly the pitchers pitch. And how quick--you know, it's, ball goes back to the pitcher, ball is thrown. Ball goes back to the pitcher, ball is thrown. It's really striking, and that's something that I'm not sure when exactly they got away from it, and it was Ricky Henderson and testing his batting glove after every pitch. But it something disastrous happened, nevertheless--20 or 30 years when they lost control of it. Russ: Yeah. But I think that slowdown is probably a result of the money. Because anyone at bat is probably more important now. Anyone pitches, is a lot more important. So, people know that their statistics matter. So, there's just a lot more care into each at bat and each pitch. And so they go through a bunch of rituals to get themselves in the right frame of mind either as a pitcher or batter. And we're just--I think baseball is going to have to change that from the top down. I mean, I think--an amazing example, I think this year was the discussion of whether an intentional walk should be, you shouldn't have to throw 4 pitches; you should just, say, signal the person going to First (First Base). And it really illustrates the point I'm trying to make about tradition. A lot of people are offended by that. They are not just like, 'I don't know if that's a good idea.' It's like, 'How dare they do that? How dare they? Sometimes, that walk, that pitch goes wide; and sometimes'-- Guest: I think I've seen that once in my life. Russ: Once, maybe. Guest: I know I have seen it once. I don't think I've seen it twice. Russ: I've seen somebody swing at a pitch and put a ball in play unexpectedly; it's exciting. Once. Guest: Right. Russ: Out of thousands of times. Guest: And thousands of times and thousands of minutes. Russ: But it's bad-- Guest: But you have to pay attention to the most predictable thing that could possibly happen. Russ: And what's more untraditional than changing the height of the mound? Or a designated hitter? These were all things done to bring more offense into baseball. And I think if baseball continues to decline as an attraction, they'll change these norms and these traditions will change.
27:55Russ: Let's talk about young people, children, and how the amount of money in sports has changed the way that parents and their kids approach sports. And you use the example of Nick Bollettieri's academy in tennis. What was his insight? And how has it affected tennis and other sports? Guest: Well, I think his insight was similar to the insight--I guess I'll step back from him for one second just to sort of lead up to him. The original insight was by a guy who is sort of credited with being the father of the modern sports industry, Mark McCormack, who I spent the first couple of chapters writing about. And one of his--he was sort of the first person to see this whole cycle working together of, you know, more money to the players, more time to practice, product gets better; more money into the system. And the [a e o?], and the jobs become more desirable; more competition for the jobs, which makes the product even better. Um, but, you know, so, what Bollettieri saw was more money, the part that he saw was more money going into the system. Tennis becoming professionalized--which it really wasn't before 1968. It was just a few tennis players because the tennis tour was--awful--to the extent that professional tennis even existed. It was just a bunch of guys sort of barnstorming around the world. And his insight: Once it got professionalized and more money was going into it, that more kids were going to want these jobs. And more parents were going to want these kids to have these jobs. Everybody was sort of up in arms the other day when Maya DiRado, the very talented young swimmer for the United States--she's 23, 24 years old--went to Stanford, and after these Olympics isn't going to swim any more, because she has a job at McKinsey (McKinsey & Co., management consulting firm). And people can't imagine the idea that she's going to give up a life as a professional swimmer, because you go wherever you get sent by-- Russ: Those are people who never thought much about what it's like to be a professional swimmer. I don't think. Guest: Right, exactly. They haven't thought too much. And I can tell you--if there [?] Russ: They haven't thought of-- Guest: If there's one sport where the training and the practice is just absolutely drudgery and just staring at that black line for hours and hours a day, it's swimming. So I can understand it. But, it struck me as funny, because, you know, 30, 40 years ago, of course you wouldn't be a professional anything. Of course you'd take the job at McKinsey. Um, but Bollettieri saw that that was going to change. And that was changing. So, what he wanted to do was flip this American idea of being a well-balanced child and a well-balanced teenager and a well-balanced adult on its head, and, you know--if you are a teenager and your future was tennis, then you should practice tennis 8 or 10 hours a day and maybe go to school for 3 hours a day instead of the opposite ratio. And it was sort of blasphemy at the time. And now it's one of those things that is sort of like, 'Well, yeah, of course.' And what's interesting about it--what's always been interesting about it to me is that we have this, you know, we have this sort of prejudice still against athletic prodigies doing this, doing that, say. It still exists. I can tell you it does because if in your neighborhood or on your street there's some kid who is really good at something and he is spending all his--he's really good at hockey or soccer, tennis, or golf--and he enrolls in one of these programs and dedicates his whole life this way: You know, there is a certain amount of sort of parental judginess that will go on. But if that kid is a great ballet dancer or a great pianist, we never say that kid shouldn't go to a conservatory. No one ever judges the prodigies, I don't think, in the arts or in other pursuits. But there is something that I think people still see as kind of crass about doing that if the effort is sports-- Russ: Yeah. Well, I think the issue there--it's fascinating that it happened and the intensity of it. And I assume it's--it's spread way beyond this phenomenon, the Academy--it's the travel team phenomenon that you write about. It's just happening all through every level of sports. It's-- Guest: Yeah. It feeds--it fed down. It started with the Academy but it sort of fed down to, 'Okay, well, now we'll get academies in every town.' So, yes, it sort of created something of a lunatic system in some ways, so that even if your child isn't a great, isn't a prodigy, and you know, like most of them probably will never even play for a Division 1 College Soccer Team, chances are her travel team that she's playing for has a coach who is ultra competitive and wants her to only play that game by the time she's 11 years old. Russ: Yeah. Guest: So yeah, it does have its downsides.
33:35Russ: I think the other part is--well, first, there's the uncertainty, as you point out. I think, you know, an extraordinarily gifted musician, an extraordinarily gifted athlete, we're a little more understanding of this. The problem is the people who think: 'Well, there's a chance; so let's devote our lives to it.' And a lot of people, of course, can't make it, literally. It's just not going to happen. There's only going to be 10 top-10 tennis players in the world at any one time. There's under a thousand who think they have a shot at it--and maybe a couple of them do-- Guest: And only 80 of them, only about 80 of them make money these days. Russ: Yeah. 3411 When you read a book like Open, by Agassi, which is I thought is really an amazing autobiography, a kind of book I normally wouldn't pick up--but I think I've mentioned it before on the air--just a really gripping, fascinating read about all the different aspects of being a professional athlete: Didn't seem so healthy for him, at least, to go through that experience. Guest: Right. No, I think he's--Andre is, you know, an incredibly self-conscious person and one of the smartest least educated people, really sort of self-educated at this point because he's so incredibly well-read now. He sort of became, in his 30s, this completely voracious reader, as read everything. But yet, there's that heartbreaking moment, I think when he's 15 or 16 and he wins the tournament, and yet that he had entered as an amateur, and I think there was like a $2500 prize for it; and he called his dad and he said, 'What do I do?' And his dad said, 'Andre, you're not qualified to do anything else with your life. Take the money, and turn professional.' And it was completely heartbreaking. Imagine being told, when you are 16, that you can only do one thing. That everything else is gone; you can only do one thing. So, yeah--I mean, I think he didn't get great messages from it. You know, it can work though. I think Maria Sharapova, granted she's got some problems these days with taking the medicine; but I think she, I don't know that she would trade the life she had for anything. The fact is that if you are going to be an elite athlete these days you are probably going to have to focus pretty hard on it from a pretty young age. Russ: Yeah. No, that part, I think is true. And that's the way is right now, for better or for worse. It's just a reality.
36:20Russ: Let's talk about the Olympics. They are coming, here in the United States and elsewhere. They are in Brazil this year. Guest: Yeah. Russ: In my mind, they are coming up in the United States because that's where I'm going to watch it. I'm not going to Brazil. Guest: Right. Russ: But the interesting thing for me is, Michael Phelps, if I'm correct, made the U.S. swim team. Guest: He did. Russ: He's an old man by the historic standards of the sport--a really old man. So, talk about how that changed, and why it changed. Guest: Well, that has to it the historic standards of the sport. I think for a very long time there was this idea that swimmers peaked in their early 20s. And women swimmers may even peak even younger than that. And it's completely wrong. Swimmers peak when every other athlete peaks--which is their mid- to late 20s. Russ: 28. [?]-- Guest: [?] and they are--right--and the reason we thought this was because no one dared to swim after they were 21 or 22, so you couldn't make any money doing it. Because you would go to the Olympics; you had to be an amateur. It was the Mark Spitz story. And you won your medals and then you went on to become like a D-list actor who was doing guest appearances on Emergency and The Love Boat. And that was sort of the opportunity that you had. But what changed was you had a group of athletes who got tired of taking $750 or $1000 or $1500 or whatever it was under the table from the organizers of events who also happened to be the people who were making the rules saying that they couldn't take any money or be paid as professionals. And they said the system is ridiculous. We're working harder than everybody else; we wanted to be paid as professionals. And the person who focused on them, because I think he's so interesting and he's had such an interesting life, was Edwin Moses, the great hurdler from the 1970s and 1980s. Who has this unbelievable thing that he did which was that he didn't lose a race for about 10 years, 122 races. His specialty was the 400 meter [?] hurdles. I mean, it's astounding what he did. But the only reason he was able to do it was he got them to change the rules. And he was able to pursue running professionally. He was, at the time he won his first gold medal in the Olympics in 1976, he was at Morehouse College on an academic scholarship, because he was pretty slow in high school. But then he had this growth spurt, and he did really well; and you know, by the time he was a junior in college he was the best in the world--at that time he was a junior in college. And then after that he went to work for General Dynamics as an engineer. And it was the Cold War. And that was really advantageous for him because General Dynamics was working three 8-hour shifts, designing, you know, weapons and missile systems because they had all these government contracts. And so he would work--he was an engineer on the 4-12 shift. So he would train in the morning or the early afternoon, and then show up at work at 4 and work till midnight; and do it all over the next day. And that got--wouldn't you know, that got a little tiring? Russ: Hmm. Guest: And he was agitating and he was really smart and he was, you know, a Gold Medal winner, so that always gives you a certain amount of authority. And he had the good fortune of being, of being an athlete at the time when Juan Antonio Samaranch took over the International Olympic Committee. And Juan Antonio Samaranch had a lot of faults, and liked to be referred to as, you know, 'Your Excellency' and was a buddy of Franco-- Russ: Dom Julio [?]-- Guest: Right. As, you know, [?]-- Russ: Human faults. Guest: Right. Russ: Maybe not the Franco part. Yeah. Guest: Right. But one thing he did, he ended up on the right side of history was that in order for the Olympics to survive, they were going to have to be in competition between the best of the best. It was no longer going to be able to survive as a sort of quirky amateur competition because people weren't going to be interested in that. And he set up this system and got enough support, and in working with athletes like Moses was able to change the rules so that professions, so that you could be a professional Olympian. And what do you know? When you can be a professional Olympian, you can rate for ten years--you keep training and train hard and making money, and race for 10 years and not lose. Or you can be like Michael Phelps and, you know--you can break Mark Spitz's record in your third Olympics and then come back a fourth time and become the most decorated Olympian ever. And then come back a fifth time, as he's doing now, and try to solidify your legacy; and probably he'll pick up another Gold medal or two along the way, at 31 years old.
41:56Russ: But it really illustrates the point that, which runs through your book, which is, again, not so easy to see--which is the synergy between the attractiveness of the sport, the quality of the play, the amount of money that's in it which feeds back into the incentive to get better and to be able to market a better product. Obviously, ABC (American Broadcasting Company) did an amazing job over the years, humanizing the Olympics. When I think of the Olympics for better or for worse I often think of Jim McKay telling some story about some tragedy-- Guest: Oh, definitely for better. Jim McKay--definitely for better. Russ: Yeah, I think he's a giant. But what he did is-- Guest: If he hadn't launched the Jim McKay documentary, HBO (Home Box Office) shows late at night sometimes, make sure to watch it because there's this absolutely priceless moment from I think the 1960s where Jim McKay is announcing the ice-barrel jumping competition from one of the resorts in the Catskill Mountains, and it is as riveting--and he is able to make it as riveting as the men's 100 meters in any Olympics. So, yes, definitely for better with Jim McKay. Russ: It's all about story-telling and it's all about the humanizing of the athlete and making you care way beyond the event, way beyond the competition--giving this visceral, emotional connection to somebody you've never heard of, that suddenly you are rooting for and caring about. And basically it's a different product. I think that's the most important lesson here. It's that they took something that looks like a game and they made it into a drama, in a way that people hadn't thought of before; and that allowed the money to flow in because people cared. And that in turn allowed the product to get better. And that created more eyeballs, which created more money. And, it's to some extent a virtuous circle, although as you and other sports fans occasionally lament, changes things; and you don't always--there's some downsides to it. Guest: Right. And with the Olympics the important thing is you create all these characters and then you don't kill them. Okay? You don't kill 'em after one season, because that's what they were doing. Russ: Yeah. It's not Romeo and Juliet. Guest: Right. You couldn't afford [?]--imagine if every TV series could only have one season and then you had to have all new characters? That's what they were trying to do with the Olympics. And the explosion in the value of the TV rights in the Olympics comes when the professionals came back year after year after year, and it becomes a great TV show. Because we know these people. We know whether it's Michael Phelps--and we get to know the sprinter who is going to run through the United States--her name is English Gardner. And she's got a pretty good chance of winning a medal, even a Gold Medal; and she's 23 years old and her parents are ministers from New Jersey. She grew up with barely two nickels to rub together, and you know, she's 23 years old and she's an Olympic rookie; she talks like a 35-year-old veteran. If she stays healthy, you are going to know her as well as you know your next door neighbor over the next 10 years. And so, yeah, that's where--it's like you said, it's that synergy. And yes, look: I get it; there is that downside. There was something unique about--I don't know; I hate the word 'purity'--but for lack of a better term, the supposed purity. But it really wasn't pure. Was there purity in a system where the organizers of it are pushing a system that essentially artificially keeps down their labor costs and allows them to make money on their side businesses? Russ: Right. It was an ugly, ugly-- Guest: It's really an ugly system.
46:21Russ: But the irony of all this, which I think also comes out in your book; and it reminded me a little bit of this moment--I forget what book it was, EconTalk guest long, long ago, maybe back in 2008 or 2009, where the author was recounting the history of videotape and how horrified movie executives were that people might be able to watch a videotape with somebody else in the room who hadn't paid for it. And they would lose some money that way without realizing that they were on this enormous profit monster that they were holding down, foolishly. Short-sightedly. [Podcast episodes Boldrin, 2009; and also Munger, 2008--Econlib Ed.] So here are these owners keeping down the players, paying them a pittance--in baseball, and in football, it's just horrible. They would give them a contract; they had no alternatives; there was no free agency. They'd have to threaten to do something instead of playing baseball. It wasn't a very viable threat, the players would. And when that changed, everybody got richer. It was just a terrible mistake on their part to think that somehow they were benefiting from exploiting the athletes. Everybody was losing. Everybody was missing a chance--and especially the fans. Guest: Especially the fans, and especially the owners of the poorer teams. I mean, for years--Kansas City was basically the farm team of the New York Yankees. Now Kansas City is world champions. And, you know, you could complain; there was all these years of complaining, 'Free agency is going to kill the small market teams.' It pushed so much more money into the system and forced these franchises to operate like real businesses, because that was what they were going to have to do in order to compete. And yes, a lot of families that had owned these franchises couldn't afford to compete any more. And they had to sell. But they did pretty well when they sold; and the new people who came in were able to--it's in some ways like any other business and some ways completely different. But that's--this idea that if you suppress and pay your workers as little as possible and discourage competition, that that's the road to success, I don't know where exactly we got that idea. But time and again it shows us, in industry to industry, it seems not to be true.
49:05Russ: So, let's turn to Nike. I'm recording this in the summer, I come out to Stanford, to the West Coast office of the Hoover Institution; and I'm probably about 500, maybe 400 yards from the Knight Management Center, named after Phil Knight, who made a rather substantial gift to Stanford's graduate School of Business. And, you know, we just sort of take this for granted that Nike is this incredibly wealthy company, but going back to 1970 or so when Nike was just getting started, the late 1970s--can you imagine saying that one of the most successful sports companies and businesses in the world is going to sell sneakers? I don't understand how they pulled it off--I'm still somewhat mystified by how they have identified success with shoes. When you think of all the things that could have been different, or why it would work at all--it amazes me. Guest: Well, what they--you said, built this massive success over selling shoes--what they realized, and Phil Knight has talked about this, is that their main product was selling stories. Essentially, probably shortly, around the time of Michael Jordan in the mid-1980s and, you know, the Michael Jordan boom into the late 1980s, they realized that they were not so much an equipment company but a marketing company. That that's where their main strength was. And yes, they do put a tremendous amount of money into research and development. Russ: They're good shoes. Guest: They create good shoes. Russ: Fer sure. Guest: Yes. Good produce. Russ: Good shoes. Guest: But a lot of people make good shoes. But what they understood before anyone else did was that it wasn't so much about the shoe: that it was about what that swoosh represented and the people that they could get to wear that shoe, and the story that they could tell and the sort of legend that they could spin about that person. And sometimes it works really well. It's worked more often than not. And sometimes it works, famously, horribly. And you know, we know those stories too well, too. The most famous of them would be, I guess, Lance Armstrong, where they create this whole campaign about an athlete that was basically a complete farce. But what you get back to ultimately is how they changed and what, again, we're talking about the relationship between what happens off the field and what happens on the field--how the changed the sort of emphasis that different athletes put on different aspects of their career. And what really became important to a lot of the athletes is not so much, you know, how many championships they've won or exactly how many points they scored or can help my team, but 'What's my story?' here. You know. And sometimes the story is true; sometimes the story is not so true. Yeah. You go back to the famous story that every thinks about Michael Jordan, that he got cut from his high school basketball team. He didn't actually really get cut from his high school basketball team. He just didn't make varsity as a freshman. Which is an entirely normal thing to happen, even to really good basketball players who haven't-- Russ: I think he was short. Guest: So, yeah, he-- Russ: His growth spurt came late. Guest: So, yeah, he hadn't had his growth spurt yet. Right. He just played JV (Junior Varsity) as a freshman and then grew. And then was a superstar by the time he was a sophomore. But it sounds much better if you say he got cut from his high school basketball team and, you know, struggled against the adversity and came back from defeat. And the legend begins to grow. You know. And they say, 'Oh, well, what's the difference there?' Well, the difference becomes when you become addicted to the legends. And so then there are certain legends that become irresistible, like Lance Armstrong beating cancer and then coming back to win the Tour de France. And, so what do you do? You make a commercial that says, 'What am I on?[?] I'm on my bike 6 hours a day,' when, you know, the truth is he's on a lot of other things besides his bike 6 hours a day. And that's where the danger comes in. And I think that's the part where we get most irritated in sports. And in every other aspect of life. You know what? People don't really like being lied to. Or, they don't like to be sort of made fools of or have things pulled over on them.
54:35Russ: I have to interrupt, because, you know, we're not going to name any names, but it is--July; and November 2016 is coming soon. And somehow people manage to--they are going to vote for a bunch of people who are going to lie to them. A lot. So, I think I would take a different tack. I would say that lying to us in sports is somewhat harmless. Somewhat harmless. The fact that Michael Jordan really didn't do x, y, or z is maybe not the worst thing in the world. Even Lance Armstrong. I mean, it's an incredible Shakespearean tragedy, the whole thing; and he humiliated his friends, who lied for him. And he made a lot of money--dishonestly, true. But if it hadn't come to light that he was a cheater, a lot of people would have been happy--would have used that as motivation, inspired people. It's a little bit like fairy tales. Literally. These are fairy tales--they are morality tales that have sometimes a happy ending, we learn a different lesson from it. I just find it fascinating that you can spin those stories to the extent that you can get people to pay that much money for a shoe. And why it's a shoe and not something else. Obviously athletes endorse lots of products. But somehow the fact that it's used--if I had to think about why Nike is successful, there aren't many things as a non-athlete I can do and be like Mike as a basketball player. Yeah, I can drink his Gatorade or whatever it is, or I can drive the car he endorses. But if I wear his basketball shoes, it's kind of like, 'I'm like him, really, as a basketball player.' Or if I use the racket that Sampras uses, or whatever. Guest: Oh, God, you are going to break your arm if you use Sampras 's racket. It's so heavy. It's [?] that whole[?] Wilson is the worst racket--it's like a meat cleaver. Russ: I don't know why it came to mind. But anyway, I just think it's the ability--but anyway, the consumer version of this is Coca Cola. So, Coca Cola is, it's a good-tasting soft drink; there are a lot of decent tasting soft drinks that are water and sugar and a little bit more. But it created something else--a feeling, an aura, a brand--that's different. And Apple has done that. It's hard to understand why some make it and some don't. And why some are successful and some aren't. I don't know. Guest: Yeah. I think--and to get back to Nike, they made it because they had really cool commercials. Russ: Yeah. Guest: They just didn't create--and you can name 5 of them. You mentioned, I think it was a Gatorade commercial, you mentioned Michael Jordan; but, they had Spike Lee directing their commercials, in the 1980s, in this sort of edgy way. They were just telling these great stories of inspiration while everyone else was talking about the great technical, the great molded soul or something like that. Maybe it's a difference between prose and poetry. Or it's a difference between, you know, there's that old--when Democrats used to lose a lot to national actions, I used to read about how it was because they would, because they saw if they used, that a Progressive or a Democrat always thought that he could logically explain to a voter why they should vote for them, whereas the people who were really good at running these campaigns would inspire them. Would talk about big ideas, like freedom, and things like that--they wouldn't get into the logic so much. And in terms of why Nike, why someone like Nike was successful was they were talking about big things. They were talking about dreams, and Just Do It, and getting off your couch. And, let everybody else try and tell me about the technical aspects of why this shoe might make you go faster when it really doesn't. Russ: Yeah. It's just hard to understand why telling somebody to 'Just Do It' makes me want to buy their shoe. But, it's workin'. Guest: Exactly. It has worked for a long time.
59:13Russ: So, we're almost out of time. I want you to reflect on something that's not in your book, which is: You are a great writer. Guest: I'd say I'm a great re-writer. Send me raw copy. Russ: But it's a phenomenal thing that in 2016 there are a lot of people that can make a living writing about sports. There are a lot of people who spend immense amounts of time thinking about sports, as a leisure activity. So, when I think about, when the Fall comes, and Fantasy Football comes along, Fantasy Football Season, the amount of hours that Americans spend playing Fantasy Football and paying attention to their draft and watching their teams and looking for trades--it's an incredible statement about our wealth. As a country the amount of time we spend watching a 24-7 sports channel, reading about, on the Web, all the statistics of all these players across all sports--this is another aspect of sports that has so changed. Yanno, when I was a kid, I looked at the box scores; I learned what players hit in their careers; I loved baseball statistics. But today, kids know--and adults--such an immense range of stuff about so many sports. And I just find that a different aspect of this transformation that we haven't talked about. So, close us out by reflecting on that. Guest: Well, I do think sports have still have, when sports work they have a way of sort of inspiring us and may make us think about what's possible in a way that, in a way that nothing else does. You know, you get back to the Olympics--which are coming up. The Olympics are a lot of different things: they are kind of over-commercialized and they are a spectacle and they are a TV thing. But, you know, at their root is this really big idea--which is that the Olympics is essentially a peace movement. And that's sort of how it was founded, originally. And the importance of that part of it is I think is still there today and I think is part of the reason why we are kind of attracted to it. There's a big idea behind it. And the big idea is that: there are a lot of countries in the world and there are a lot of countries that fight with each other. But if, for 17 days every two years, or four years if you spend a high measure, the summer or the winter, a few thousand athletes, or occasionally in some Olympics 10,000 athletes, can live in the same village and eat in the same dining room and compete on the same field of competition, maybe the world can become a better place. And every basketball game and every baseball game doesn't have that overtly. But there is some sort of larger idea to it, whether it's beauty or whether something very elemental or simply fairness, or, like you say, you know, there's much less racism in it now because of lots of other different aspects to it, to the sports. There's an ability for, as much as these things can irritate us, they can make us feel like, you know, there's something larger going on there. And they can not just build character but also reveal character, in ways that other activities simply can't. And it's neat to watch the people--it's neat to have the ability to watch the people who are the best ever at these things by their trades. And when they do it well, and when they do it with a sort of grace and humility, it's a special thing.

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COMMENTS (17 to date)
Daniel Simmons writes:

I wanted to push back a little on the idea that baseball is declining. The sports has declined some, I won't deny that, but financially, the sport is doing great. At $9 billion a year, MLB revenues are second only to the NFL's revenue per year. https://en.wikipedia.org/wiki/List_of_professional_sports_leagues_by_revenue Also, MLB players are, on average, better compensated than NFL players. http://www.businessinsider.com/charts-expose-how-badly-nfl-players-get-paid-2013-9 Also, the MLB minimum salary is higher than the NFL minimum salary.

For another comparison, the NBA's revenue are about $5.2 billion, so the NBA has a long way to go to surpass MLB in terms of revenue.

I agree that baseball needs to improve some things about the game, but still brings in massive revenue because it is advertiser friendly (162 games a year) and good local entertainment during the summer--when it doesn't have too much competition.

Madeleine writes:

I wasn't around in the 80s and I'm not a huge football geek, so I'd like it if someone who was a bit of both could answer a few questions about the changes in football mentioned in the podcast.

The guest mentions huge changes in both blocking and scoring, and Russ brings up the size of the players. Did this result in more injuries to the players, specifically more head injuries? This is a pretty hot topic right now.

Regarding injuries and rules, if it is the case that the new rules result in more injuries, do high school teams follow the new rules or the old rules? I'd think that if the old rules are safer, maybe schools at least could go back to them to prevent parents pulling their kids out of football

Pete S writes:

Soccer had some rule changes in the 1980s and early 1990s. 3 points for a win, rather than two was introduced in England in 1981 and in other places later. Also back passes to the keeper were removed in the early 1990s. In addition the game was made considerably less physical by refereeing changes. In the 1980s skilful players like Maradona were hacked at by defenders on a regular basis. The things that were regularly done to players like Maradona would now get a red card. This is one reason why Messi can do more than Maradona could.

Also, while there were some rule changes soccer still got much bigger in the 1980s without much of a rule change. The goals per game average for European leagues has been around 2.6-2.8 for many years now but sport still got bigger. Perhaps the NFL would be just as big without changes to increase scores.

Cricket also made changes to make the game faster. One description of cricket is that it is 'an excellent game to make you appreciate eternity'. It's far slower than baseball. In the late 1970s 'one day' cricket appeared and now 20-20, which is about as long as a baseball game has appeared. The age of cricket viewers in Australia and the UK has dramatically increased despite these changes.

Stephen writes:

I found it a little bit weird that Futterman is saying that the British premier League is the best in the world when they've been being dominated for years by mainly the Spanish liga. I think he must just be biased because that's what he sees in America.

Marko writes:

Soccer rules were changed on several occasions to make the game more attractive. For example in 1992 it wasn't allowed anymore for a goalie to manually handle a deliberate back-pass. Also in 1990 the offside rule was changed in favor of the forwards.

Mark Crankshaw writes:

@ Russ Roberts

So, like, the most obvious one is soccer. So, soccer--a lot of games end zero-zero. And Americans find that incredibly frustrating. I don't know if there's something wrong with this, right with this; but to me, part of the challenge of soccer becoming more popular in the United States is the fact that scoring is relatively rare.

Russ, I must repsectfully disagree with this assessment. The popularity of soccer in America (particularly among 'baby-boomers') has nothing to do with the lack of scoring in soccer, but rather with the complete lack of success Americans have had in international competition at club and national level in soccer.

Where-ever soccer (football) is popular in the world (that is, in most of the world), football supporters there have tasted some sort of success internationally or there is a long standing league competition with one or more domestic powerhouses.

Success in the World Cup, or even occasional success in a major Confederation Championship (like the recently completed European Championship) breeds popularity. Having a league with clubs that can successfully compete in international competitions (like the UEFA Champions League or Copa Libertadores in South America) breeds popularity. Even failing that, at least having a long established league with intense national rivalries is enough to spark popularity.

During the period 1945-1995 (when 'boomers' came of age), the United States was, in soccer terms, a derelict basketcase, a virtual soccer wasteland, the quintessential backwater. No long standing league, no 'star' players, no 'big clubs', no success of any kind whatsoever at club level or in international play. Even since the advent of Major League Soccer in 1995, the USA has lagged far behind Mexico in club competitions (a Mexican club has won the last 11 straight CONCACAF Champions League titles), so the USA isn't even the biggest fish in the rather small CONCACAF (North American) pond. Only since the National men's (and women's) teams have tasted some success at the international level has soccer at last achieved any sort of popularity.

I have a colleague, a boomer, who is a Kansas City homer. He loves the Royals and the Chiefs. He also thinks that soccer is 'like watching corn grow'. I'll wager that if Kansas City had had a world class soccer club during the 1950's and 1960's, with world class players, he'd be both a fan of soccer and a fan of that club no matter how low the league goals per match were. However, since Kansas City was a remote soccer backwater, he is neither.

It's not the scoring that Americans love, it is, like eveyone else, the success. Even if soccer had 10 times as much scoring, soccer would not have been popular in the post-war period, because being routinely pummeled by vastly superior teams isn't very much fun. It's much easier to play against other American teams, in sports no one else plays professionally, and then call yourself 'World Champion' than it is to actually win in the sport that almost all major countries play professionally.

BTW, there are some very small leagues in Europe that have very high scoring league averages (such as Andorra), and goal scoring is much more prevalent in the lowest divisions of many European leagues (mainly because the variation between clubs is very high and a lot of blow-outs occur--the top European leagues, in contrast, due to relegation and promotion, tend to be intensely competitive). Indoor soccer is very high scoring, yet the MISL never gained any kind of popularity (here or anywhere else). In general, high scoring soccer equates with bad soccer.

Mark Crankshaw writes:

@ Madeleine

The guest mentions huge changes in both blocking and scoring, and Russ brings up the size of the players. Did this result in more injuries to the players, specifically more head injuries? This is a pretty hot topic right now.

Injuries have always been prevalent in American football. I suspect the liberalization of blocking had no direct adverse effect on injuries (in fact, indirectly it may have saved a number of QB's from further damage since it gives offensive lineman more opportunity to protect the quarterback). The changes in pass coverage may have also actually reduced injuries (since defensive backs couldn't just flatten recievers as they could prior to 1978). In total, the changes made in the 1970's (which have filtered down to the High School level) may have actually reduced the likelihood of injuries rather than increased them.

The players, however, are much bigger (and faster) than in the 1970's at all levels, and that indeed may have contributed to an increase in head injuries.

The NFL has recently attempted to legislate away practices that can cause head injuries (such as head-slaps, horse collar tackles, intentional hits to the head-- all quite legal until recently). However, it is difficult to legislate against speed and size in a sport where speed and size is such a decisive advantage.

Jeff W writes:

English Premier League has the following free market features that don't exist in US sports:

1) Leasing of players from one club to another.
2) Use of team's own money to build and improve stadiums. Mostly at least.
3) Relegation of poor performing teams to lower tier leagues.
4) Freedom to pay players whatever (no salary cap).
5) Every club for themselves--no revenue sharing.

Why don't we see such features in the American sports landscape?

To what extent does the extortion of taxpayers to subsidize leagues and enable monopolies permit the success of professional sports?

Jerm writes:

Wasn't brought up in this episode (I'm sure it came up in many previous episodes...economics people love to talk about unintended consequences), but the increase in head injuries in football is largely because of the pads. Rather than tackle the ball carrier, defensive players often use their pads to hit their opponents to the ground. Pads were introduced as a safety measure, but (especially when combined with increased size and speed) they ended up making the sport much less safe.

(Head slaps and intentional hits to the head have been against the rules for over 30 years. Outlawing horse collar tackes was done to prevent leg injuries.)

Recent rule changes have focused on "leading with the helmet" and hitting "defenseless players", which cause head injuries when the target hits the ground.

For current professional football players, the new rules represent major changes to habits that they learned over the majority of their lives (and probably helped them get to the NFL). For children just starting out, it's much easier to change. Also, they don't hurt each other as much because they are small.

Trent writes:

As I understand Mr. Futterman's thesis, he ties the massive growth and increase in quality in sports to athletes "agitating" to be paid more money/to be paid as professionals. That enabled athletes to specialize in their chosen sports, and that led to myriad micro and macro effects.

I'm surprised that his thesis went unchallenged in that why haven't we seen that thesis play out successfully in other fields? Teachers, for example, have been "agitating" to be paid more money/to be paid as professionals for decades...and indeed they are paid much more today relative to decades ago. But I don't think anybody would argue that industry has seen the same amount of growth in quality as has sports, especially inner city schools.

In any event, I think Russ' thesis is much closer to how the sports industry evolved. Technology made sports scaleable (and is continuing to do so). That caused a C-change throughout all sports because instead of ticket sales being the #1 revenue source (by a wide margin), myriad other revenue sources emerged (national TV, local TV, cable TV, internet, marketing, etc., etc., etc.).

How do you draw attention to yourselves in all those technological areas? Personalities....or stories, as was discussed. It shouldn't come as any surprise at all that as sports was just entering the cable TV phase, you had the Larry Bird/Magic Johnson phenomenon emerge in the NBA....the Mean Joe Greene Super Bowl commercial go viral in the NFL...."The Great One" in the NHL....etc., etc. Leagues learned they had to market the personalities to get over, if you will.

Further, they learned to work together instead of always in competition. For example, the NFL isn't akin to 32 different computer companies competing to see whose computer sells the best/wins more market share....it's more akin to IBM having 32 different plants/facilities with annual internal competition to see which one is best.

As the respective pies have grown, of course the players have gotten their share - by strikes, by holdouts, by threatening to play other sports, etc. And the huge amounts of money involved have indeed enabled the specialization that Mr. Futterman described.

Three other thoughts:

* Mr. Futterman said that Bill Walsh was the first NFL head coach to take advantage of the 'new' rules in the late 1970s that allowed for more offense/more scoring. I think if he researches Don Coryell and the San Diego Chargers of the late 1970s/early 1980s, he'd change his opinion.

* If Mr. Futterman believes soccer scoring is much easier these days, he should have watched Manchester United's matches throughout the 2015-16 season. I watched almost every one of them, and it was painful at times.....most of the time.

* Yes, EPL soccer is getting some ratings here in the US. But the hidden reason why TV has fallen in love with soccer is the defined time window - they can plan on 2 45-minute halves (give or take 5 minutes of added time for each) and a consistent halftime, and slot the games accordingly. You can't do that with the other sports. NFL games always go over their allotted time, with all the replay stoppages & incomplete passes. As discussed, MLB games are over 3 hours & getting longer. NBA games take 15+ minutes to play the last 2 minutes (and that's getting longer with instant replay). But soccer fits nicely within the networks' time windows.

Dave Holden writes:

The key creative accident that Nike happened into was the creation of the modern basketball shoe and how to market them. The key force behind that movement was basketball promoter Sonny Vaccaro. He even sketched out the early models and then told Nike how to market the shoes through the college basketball head coaches and programs and NBA players. The ESPN 30 for 30 documentary (http://www.espn.com/30for30/film?page=soleman) does a great job of telling that story. I would love to hear Futterman's take on that part of the story.

Thanks Russ for such a wide ranging and interesting podcast. - DH

Mark Crankshaw writes:

@ Trent

In any event, I think Russ' thesis is much closer to how the sports industry evolved. Technology made sports scaleable (and is continuing to do so). That caused a C-change throughout all sports because instead of ticket sales being the #1 revenue source (by a wide margin), myriad other revenue sources emerged (national TV, local TV, cable TV, internet, marketing, etc., etc., etc.).

I quite agree, spot on. Soccer has become professionalized and player pay has skyrocketed in leagues all across the world and all without the kind of "agitation" peculiar to the USA in the late 70's and early 80's.

It's fairly straightforward: revenue stems from popularity on TV (the EPL, La Liga, Bundesliga, etc. command world wide TV audiences), and this popularity comes at the expense (for clubs) of attracting the best talent to stay competitive, so pay for players increases. As pay increases, the amount of talent attracted to the sport increases, thus creating a virtuous cycle. Although the overall talent pool has increased substantially, only a small number of players are 'relatively' better than the others (there aren't a lot of Lionel Messi's out there). So most professional soccer players have seen substantial increases in pay since the 1970's, there are a lot more of them, and a few players, such as Mr. Messi, can command a massive amount of pay.

I went to a Europa League game just last night (AEK Athens v. Saint Etienne) and the product on the field is very, very good. Watching soccer live, up-close, in an intense atmosphere, and being played at the professional level was what led me fall in love with the game (many years ago).

None of that comes across on TV. Yet another reason why soccer lags behind in the US: professional soccer in an intense atmosphere is still hard to find. However, I think that there is more opportunities now to find it than ever, and those opportunties will continue to grow.

As painful as Man United's season was last year, try being a Norwich City supporter. I watched every City match last year and had to endure almost two months without City scoring a goal. The opposition seem to score much too often for my liking, however...Oh well, back to the Championship...

Mike Linksvayer writes:

Not sure I buy that watching more specialized athletes is more entertaining, at least where the margin exists today. I dislike the spectacle, the many thousands or millions of crushed dreams of people who foolishly thought they could make it, and the policies that support the system (subsides, venue competition, and foremost intellectual property). Seems to me that policy should favor fields in which hard effort usually leads to success in the terms of that field rather than fueling delusion and rent seeking.

I'm probably in a small minority. But http://www.philosophersbeard.org/2016/08/too-much-competition-is-ruining-sport.html is someone else making the case that too much competition is ruining sport, rather than making it better. I left another comment over there (not yet approved at the moment) suggesting that this podcast episode shows just how hard it will be to convince many people.

jw writes:

Mark Crankshaw,

I don't think that it is quite the "chicken and egg" cause and effect. I think that this episode is a perfect example of not only the theory of increased employee productivity (revenue per player) increasing employee pay, but also that this process takes many years and is very messy and uneven, even for an industry clearly based on a meritocracy.

This chaos and these time lags are not (and possibly can not be) accounted for in economic models.

Mike Linksvayer,

Agreed. Imagine another business where a city would build a business' entire $400M plant and facilities in exchange for the jobs "created" for a company that makes $400M/yr in revenue (except maybe Tesla...).

Keeping in mind that the most highly valued NFL team would be at the bottom of the S&P500.

Mort Dubois writes:

Re soccer's popularity/unpopularity: Soccer benefits from tremendous network effects in most of the world, and illustrates that one is most likely to be a fan of whatever sport/team your parents and peers are fans of. Hence soccer's slow start in the US. In most of the world, soccer is Google. In the US, it's Bing.

Soccer is also one of the easiest games to play - not to get good at, but just to play a version of. Almost anything will serve as a ball, and almost any venue will work. I played intense soccer games with my young sons using a tennis ball in our foyer, a space less than six feet square. Kids all over the world, without access to the fancy facilities and equipment considered essential by US parents, play soccer every day. That translates easily into lifelong fandom.

As for the EPL, it's not only easy now to see games and highlights on the internet, but the commentary is in English, so it's more accessible to US fans than the other European leagues.

I think that soccer has a bright future in the US. So many kids playing, and we now have at least one national squad with a solid record of success.

Bogwood writes:

I support Jeff W and the concern over subsidies. It is time to cut the cord between government and professional sports: building the venues,monopolies in corporate form and on TV packages, tax-free status, and college taxpayer funded scholarships. Give it a ten year trial without government support.

It sounds like international soccer has fewer government subsidies but probably still some unwilling TV subscribers. Some of the US subsidy is supposed to come back in the "jock tax", high individual rate and tax by the locality in which the game is played. But do any of the upper income players actually pay anywhere near this maximum rate in real life?

Gandydancer writes:

The three point shot has changed the game of basketball, and man to man defense has been crippled by ending the hand-check and allowing more steps without a dribble... but if more scoring was the idea the NBA obviously got it backasswards. Scoring was highest in 1960 precisely because set up defenses were so effective that fast break offenses (invented in pre-Russell Boston) became the fashion to defeat them. Counterintuitive, but true. (But there was an intervening era of effective defense, led by Detroit.)

Um, no, you don't get Stephen Curry through more training. He's a freak, in his way maybe as much as freak as Wilt, still the greatest basketball freak ever.

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