Reforming American Professional Sports: A Proposal

Please see this article at the LeagueOfFans.org, a consumer advocacy group founded by Ralph Nader and part of the Center for Responsive Law.

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When many people think about professional sports, they think “it’s just a game”. They do not think too much about the organization of our largest leagues and likely would not consider anything to be wrong with the economies of pro sports in America. To most, everyone should be happy to be making whatever money they are already making.

Yet in actuality they are not just games but rather a massive multi-billion dollar industry that has benefited from “It’s just a game” to stifle the economic rights of both its labor and any potential competitors, directly harming consumers and public finances. In a closed sports system, current team owners alone control who is allowed to enter a league and are permitted to place extreme and onerous entry requirements upon any potential entrants.

There is no modern justifiable reason that leagues like the NFL or NBA should enjoy a monopoly and be permitted to prevent new businesses from joining the competition. Whereas the granting of antitrust exemptions were fruitful in the initial development and stabilization of pro sports in America, the industry has grown beyond their need and these protected corporations currently abuse their exempted status.

Considering the rapid evolution of pro sports over the last 40 years, Congress should remove all anti-trust exemptions given to pro sports and pass legislation to ensure that new entrants to each sport are permitted based on objective standards and identifiable criteria. The closed-system leagues must not be allowed to construct subjective and shifting barriers to entry into a marketplace and fandom should never trump the public benefits of economic competition.

Creating an open sports system for America would result in national and regional economic growth heretofore unforeseen and untapped, increased competition and resulting benefits to consumers, increased economic empowerment to minority communities, diversity of ownership of professional teams, the alleviation of the inequities of the NCAA and greatly benefit public finances.

If an investment group or an individual desires to start a sports team and can meet a pre-determine standard with reasonable threshold requirements for capital funding, business structure, etc., then they should not be required to seek the permission of already established entities to compete. The leagues can adjust their structures accordingly to their desire to meet an influx of new entrants.

Open Sports Systems Internationally

Around the world, we are provided countless examples of open sports systems that thrive within nations with weaker or less stable economies. The most prominent example is the league hierarchy system, more commonly known as promotion and relegation and widely used in Europe. Within this system, teams competing in the top league must earn their right to remain in the top league through their on-field performance. This is because the three teams that finish at the bottom of the standings at year’s end are subject to relegation to the next lower league.

Correspondingly, the three teams that finish at the top of the next lower league are promoted to the top league. This process is repeated throughout a multi-league structure with the total number of leagues depending upon how many eligible teams there are within the overall system. In England for example, there are currently five leagues considered professional national leagues atop a vast network of lower regional leagues.

The English Football System via englishsoccerguide.com

This process ensures that every team is incentivized to always compete and never ‘tank the season,’ as suffering relegation would cause them to miss out on large payouts, derived from media rights and profit sharing, that will be given to the teams in the top league in the next season. Instead, the relegated teams will receive an apportionment equal to other teams in the next lower league. Which is usually an amount much less than the apportionments given in the top league.

Other open systems merely employ a multiple conference or large group play system with an expanded playoff format but lack the quality of play benefits of a league hierarchy system.

Yet in all open systems, never are private corporations permitted to arbitrarily limit the number of competitors in the marketplace.

Economic Benefits Of An Open System

Every team created, like any business, means jobs and tax income based off of those jobs. As an example, the NBA has thirty teams, thirty administrative staffs, thirty coaching staffs and player rosters. In total, a few thousand people involved in the sport, deriving incomes they spend in their communities and taxable to local, state, and federal authorities. Along with the direct employees, many thousands more rely on the income the sport creates including support staff, stadium vendors, merchandise manufacturers, hotels workers, security staffs, local law enforcement agencies and so forth.

Overall, in our nation of over 300,000,000, the US sports industry represents only a tiny fraction of our GDP and employment, tallying approximately $14.5 Billion in earnings per year (less than 0.001% of US GDP) and contributing 456,000 jobs (0.3% of all US Jobs). (http://www.economicmodeling.com/2013/07/09/not-just-a-game-the-impact-of-sports-on-u-s-economy/)

England, a comparable economy and culture to the United States, has only a population of 50,000,000 but uses open sports systems. Though their population and GDP is less than one-sixth of the United States, their sports industry generates $24 Billion USD (1.9% of England’s GDP) and 400,000 full-time equivalent jobs (2.3% of all jobs in England). (https://www.sportengland.org/media/3465/economic-value-of-sport.pdf). If the labor percentages between these nations were equal, it would translate to an additional 2.8 Million American jobs. Under our current system, the United States is not close to fully tapping the incredible potential of the economies of sports to grow further in the future.

With an open system, there would not be only 30 or so professional teams across each sport. The amount would be determined by how many teams the American sports market could sustain. Accordingly, there would be multiple the number of executives, managers, trainers, vendors, manufacturers and athletes. The economic expansion of professional sports may be the largest short-term job creation vehicle available to our nation. Job creation that would also benefit the many minority groups which represent a large percentage of the labor within the sports industry.

For many cities like Austin and Louisville or states like Iowa or West Virginia, an open system is the only method by which they are ever likely to have a pro-sports team. Within England, there are thousands of professional football clubs in the interconnected league system, each ensured the same opportunity, based on performance, to enter into to the top league.

Is there any city in America with more than 150,000 people that would not have at least one professional sports team placed into an overall open system like England’s? Per the 2010 Census, there are over 170 cities in America with more than 150 000 people. Green Bay, the 283rd largest city in America and only the 153rd largest metropolitan area already hosts a professional sports team whereas metropolitan areas like Providence (38th), Louisville (44th) and Birmingham (49th) host none. Cities or metropolitan areas like New York, Chicago, and LA could likely sustain many multiple teams. By example there are over 30 professional football clubs in London alone, six of which currently compete in their nation’s top league.

Diversity of Ownership of Sports Teams

Creating objective standards to entry and enforcing capitalistic principles of fair competition would also eliminate long-standing concerns regarding diversity of ownership of sports franchises. In order to compete and start a franchise, minority or female ownership groups would no longer need permission from rich men maintaining their monopoly.

Public Financing of Stadiums

Beyond job creation or concerns regarding diversity of ownership, ending this system of corporate protectionism would end the game of exploitation teams routinely play with local governments when asking for handouts to build new stadiums. We allow these professional leagues to limit the number of entrants and their individual teams are able to hold cities and towns hostage with the threat of departure. As there can only be so many teams in the leagues in a closed system, the threat of a team leaving leaves local populations with the tough choice of coughing up millions or saying goodbye to professional sports with little hope of its return.

This scheme of public exploitation would not exist if these protected businesses knew a new entrant could immediately fill the market they left. Cities and towns would not feel as compelled to hand over money, often previously allocated to schools and social services, to a private business. Rather than be able to dangle the threat that a town would be permanently left without a sports franchise, the towns would know that if their market can support a franchise, another ownership group would come along.

via deadspin

The current system places all the negotiating leverage with private businesses and they use their leverage to extort local politicians. Requiring objective standards to entry within the sports marketplace would switch the dynamic and place the leverage with public officials and save billions for cities and towns across America.

The NCAA Monopoly

Open systems would also greatly alleviate many of the economic inequities that persist within the NCAA by providing alternative paths to professional sports. The NCAA owns a monopoly on the path to professional football and basketball and use it to profit immensely from the work of young Americans while exercising draconian rules against their behavior and holding their career hopes hostage. For a university, a scholarship and a dorm room, or simply not charging a student, is cheap currency. Yet, for the athlete, they must take a nominally compensated gamble on their future while actively doing an activity that generates millions in profits.

As we have seen among the many open systems in Europe, removing barriers to entry allows enough entrants into the marketplace that the paths to finding employment within the overall industry also multiply, from lower division or smaller teams holding tryouts to larger teams creating development academies to scout and sign young talent. With this system, young athletes are provided with a choice of whether to enter the workplace and receive compensation for their services immediately after high school or continue to college for an education while also playing sports.

Women’s Pro Sports

An open sports system would also have profound effects on women’s professional sports in America, which has failed to develop in comparison with our European counterparts. Many of America’s professional female athletes seek employment abroad because of the lack of opportunities within the major team sports in America. All notable attempts to start female sports leagues in the United States have been in the form of closed systems with similar obstacles placed upon new entrants to protect the already established entities and prevent open competition from any outside groups.

As such, there is no incentive for individuals or groups to invest in new female teams unless they are provided assurances they will be allowed to enter the closed system or unless they intend to invest sufficiently to establish an entire league themselves. Since the already established entities limit and control competition to protect their investments and since seeking out sufficient investment to form an entire league is an incredibly high burden, the current dynamic works to dissuade new investment into female sports and limits the potential growth of the overall industry in America.

An open system of female sports would provide a stable and reliable structure for which new entities can enter the market and compete against already established entities upon meeting certain objective standards and criteria. Doing so would promote new investment into female sports since new teams would never need permission from established entities to enter the marketplace and never need to seek out sufficient capital to form an entire league.

Rather than permit the development of women’s pro sports to be constrained by closed systems that serve only the interests of a select few, it would be supported by a stable overall structure that allows it to grow organically with the free market determining where in America teams could thrive.

Conclusion

In summation, the potential benefits of reforming the economies of sport could be far reaching for many Americans. Unfortunately, the potential impact and benefit to us all through quality of play, economic growth, direct or indirect employment, tax revenues, consumer benefits, youth and minority economic empowerment, or public finances is prevented to preserve the status quo of current monopolies in our closed sports system.

Thus, I present this for your consideration: to urge Congress to reform the structures of American professional sports with the creation and enforcement of an open and inclusive sport system.

 

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Candidate X

 

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Hi, My name is _______ {Fill in a name. Preferably a classic American name that sounds like a guy you’d meet at a BBQ in Iowa. Something like Blaine Christopher.} and I am running for ________.{Fill in federal office – aim for the sky!}  Let me tell you about myself: __________________________________________________________________________________________________________________________________ ____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ {Make statements about how you love your family and show an endearing picture of the wife and children. If you have no family, show a picture of you helping impoverished kids and them smiling. Relate any personable or motivational stories from your past, discussing/making up obstacles you’ve overcome. If applicable, harp incessantly on prior experience in the military, law enforcement, as a prosecutor or with prior office.}

Campaign Platform Focus:

The focus of my campaign is strengthening our economy and creating meaningful jobs, reining in the wasteful government spending and bailouts ballooning the national debt, education reform and a return to competency, the restoration of civil liberties and reform of police practices, a return to accountability and the prosecution of past crimes, utilizing a sound foreign policy that creates allies rather than strengthens enemies, reform of the NCAA and American sports and protecting the environment.

Contents:

  1. The Economy
  2. Immigration
  3. Education Reform
  4. The War on Terror
  5. The Patriot Act and Civil Liberties
  6. Investigation into and Prosecution of Past Crimes
  7. Decriminilization of Marijuana
  8. NCAA and Sports Reform
  9. The Environment

The long version…

1) The Economy

A) The Deconstruction Of Free Trade

The methodical and tempered deconstruction of free trade with many nations is the only thing that will bring jobs back. Free trade, or rather “labor for the lowest bidder” has been the largest destroyer of American jobs since 1995, and has had a direct impact on immigration.

Acts like NAFTA were sold to the American public as opening up further markets for American workers to sell their products while also creating price competition and product diversity within America, benefitting the American consumer. We were told these acts would help nations like Mexico grow their middle class, in turn creating more buyers for American goods.

But the exact opposite occurred.  Free trade became a mechanism for American corporations to move their workforce to any foreign nation for which the costs of labor, and regulatory costs, were minimal compared to the costs of operating in America.  As more and more nations were given free trade agreements, corporations across various industries had more and more low-cost labor options to choose.

Worse, corporations who may have desired to keep an expensive, skilled American workforce were put at a major disadvantage against the companies that maximized profits by taking their labor costs abroad.  By creating a vehicle by which corporate executives were faced with a choice of maximizing profits dramatically by moving their factory to China or being at a financial disadvantage against competitors who did so, our free trade policies incentivize the erosion of the American workforce.

Free trade has also failed to benefit the nations with which the agreement were made. In the case of Mexico and Central America, it has been met with disastrous effects.  Rather than grow the middle class of these nations or assist in providing political or economic stability, it destroyed their middle classes and wrecked their economies.

Without the regulatory infrastructure or evolution of worker’s rights available in America, they became societies of low-income workers making products that were once made here.  But without the means to demand a wage increase or demand further rights.  And without those means, they are ensured to be a preferable choice to American, or foreign, corporations as a location to place their labor costs rather than within the United States.

American labor should have never been forced to compete to make American products against workers from nations where they are barely more than indentured servants. But don’t blame corporations for this. Blame Congress for continuously passing these legislations.

Free trade also puts small business and newly created businesses at an incredible financial disadvantage against big business. Whereas a large multi-national has the means to transplant their labor costs to a third-world country and ship their product to the US, small and new businesses cannot do the same. They are left having to pay more per person to do effectively the same work, sticking them with much higher marginal costs than their foreign labor competitors.

However, while free trade is harmful to the American workforce, it cannot be dissolved completely nor should it be. In fact, there are many nations for which free trade is wholly appropriate.

I propose that free trade agreements be limited to nations which possess a stable political and legal system, large middle class and sufficient worker protections. Somewhat a free trade union of worker’s rights abiding nations. Nations like Germany, France, Japan, Canada, etc.  Free trade agreements should only be given to those nations for which there are no incentives for domestic corporations for either nation to supplant their labor costs by jumping to other markets. There would be no costs savings or maximizing profit for an American corporation to fire its workforce and move to Munich because the German workers would costs the same if not more.  Further, the German middle class is strong and wealthy enough to buy American products and vice versa. This is where free trade works.  And for these nations, there should be no change in our free trade policies.

But not with nations whose economies and governments have not yet evolved to the point where they have a strong and stable middle class, government, and legal system. Methodically and over a period of many years, the free trade agreements with these nations, particularly Mexico, China, those in Central America, should be deconstructed, piece by piece, industry by industry, with the introduction of targeted tariffs that will protect products in made in America and protect American workers.

We must do this slowly because the introduction of tariffs into business structures would result in near-term increases in prices. Too many tariffs at once or too near in time could have sharply negative results for consumers and the broader economy.

B) The Restoration Of Capitalism And Curtailing Over-Regulations That Serve To Protect Big Business

Although we blame capitalism for many things, the United States has not been a capitalist country for a long time. Capitalism is designed to be a meritocracy predicated on fair competition. In too many areas, we allowed overregulation to limit competition and hinder only small businesses by creating arduous barriers to entry within too many industries. Many regulations designed to provide a sense of safety only turned into extremely costly regulatory compliance with the bureaucracies created to regulate the industries. There are too many layers of burdens upon regular Americans attempting to start a business. Many of these layers, not all, must be rolled back to allow the creation of more small businesses by average Americans.

For example, there was a time where if you wanted to start a Taxi service, you could write the word taxi on the side of a vehicle and start. Whether your company thrived or failed depended on your abilities as a business manager. But this pure capitalism came with pitfalls. Eventually, somewhere, some un-regulated taxi driver committed a crime or negligently caused the death of someone. In response, we created licensing services to ensure that a person was qualified to enter the market place and help prevent these kinds of tragedies.

The intent was right, but along the way, it became more and more costly to obtain a taxi license, or medallion, as subsequent politicians added more layers of regulation. Today, the cost of a medallion authorizing one taxi  in New York City is over $1 Million. In nearly all of America’s major cities, the costs are several hundred thousand. These costs are simply unreachable for average Americans. The only entities who can afford this are large investors and corporations who purchase the medallions and hire drivers as minimum wage employees.

While the driver has a minimum wage job, he has no chance of creating a company within his skill set because he will never be able to afford the medallion.  No matter his skills or adeptness at running a taxi service, we created a system where he can never be more than a common employee.

The over-regulation of many industries serves only to protect those currently with wealth and power because it eliminates competition by never allowing the competition to be created. Throughout American industries, we must examine where our over-burdensome regulatory schemes have worked to prevent competition and either repeal/rollback these regulations or provide exceptions that encourage the creation of small businesses.

We must give small businesses an opportunity to grow and compete on the merits of their product and services and not based on whether they can afford the lawyers to comply with 2000 pages of federal, state, and local regulations. In many cases, simply more freedom will be enough to create more jobs. We must not continue with a mentality that has resulted in police officers stopping children from selling lemonade on the side of the road.

C) An End To Corporate Socialism/Protectionism And An End To Corporate Bailouts

No corporation should ever be deemed too big to fail. The U.S government must stop subsidizing the bad transactions of its largest financial institutions. We disregarded moral hazard by opening the public checkbook to crooks and stifled the spending power of the average American, creating the largest wealth gaps in history.

By bailing out major banks, airlines, or automakers, we incentivize and protect their bad behavior. But worse, particularly in the case of the banks, we ordained them kings of the court forever. Had the major banks failed, there would have indeed been a large negative impact on our economy in the short term. But not the long term. By preventing them from failing, we stopped hundreds of smaller and mid-sized investment firms that had not engaged in these practices from capturing the market share left over. We stopped any who were wiser or more adept at their trade from taking their rightful places at the top.

Instead of allowing capitalism to reward those who do well, we decided to publicly subsidize the ineptitude of their failing competitors, giving them a blank check. Now, it is those small firms who are at a more extreme financial disadvantage. Their large-firm competitors have free money to use and no risk of loss while they must operate by the normal rules of risk and reward. In the investment world, it is the equivalent of making some gods and telling them they get to compete against ants.

Rather, capitalism should be allowed to do its job. When a major corporation engages in terrible business practices and fails, it will be broken up. Its pieces will be sold to its competitors for them to integrate into their structures as they fill the market void left by the failing entity. I stand against publicly subsidizing private corporate losses, against corporate socialism and against corporate protectionism.

D) Miscellaneous

I support maintaining a strong dollar against foreign currencies and against quantitative easing programs.

I support the re-establishment of the Glass-Steagall Act and/or similar restrictions regarding the commingling of commercial and investment banks.

I support legislation requiring high-risk home loan, auto, and credit providers to maintain ownership, or a percentage of ownership, of loans issued beyond certain high rates, thus ensuring the risk of loss, to an extent, remains with the original creditor and thus discouraging predatory lending.

I support repealing the Telecommunications Act of 1996 and re-instituting restrictions on cross-ownership of media companies.

I support legislations that restrict or ban high-frequency trading within many exchanges and markets.

I support auditing the Federal Reserve.

I support the repeal of Obamacare and the introduction of a single payer and private insurance system similar to Canada, France, Germany, and many others.

To assist the financial growth of American families, I support increasing the limits on several taxable deductions, including the student loan interest and annual child-care deductions.

 

2) Immigration

We must take a more sensible approach when it comes to immigration.

We must always remember America is nation of immigrants and I continue to support the many lawful immigration entry policies available. All immigrants to America, whether they be unregulated or not, must be afforded appropriate rights and the respect deserving of all humans.

But we cannot deny that the massive unregulated movements of peoples across borders does not have an adverse impact on a nation’s economy, from labor pressures to the increased costs of providing government services to every person within a jurisdiction.

However, walls and increased deportations will never solve America’s unregulated immigration problems. Nor will policies that callously separate parents from their children. These only address the symptoms of illegal immigration and do it in costly and ineffectual ways.

We will not see a substantial decrease in the number of unregulated immigrants until we address the problem at the source. People do not make the perilous journeys across the seas or deserts in rickety transportation, often with a variety of criminal elements preying upon them, because they want to run away from a good situation. They do it because the nation they are leaving cannot provide them or their children with a prosperous future. They do it because they seek security and because that deadly journey and a chance at a life in America is worth the risk.

This dynamic will never change until the source nations of America’s unregulated immigrants are able to stabilize themselves, particularly Mexico and those in Central America.

We must be more direct, yet also more honest, with these nations and ourselves about the causes of the decline in their stability.

One of those causes is the same that has devastated America’s work force: free trade and broader economic policies that allow American capital to place its workforce abroad to avoid labor costs. While free trade stabbed the American worker in the back, it also devastated the economies of many nations from which we now see large waves of unregulated immigration. Their locally owned small business, like ours, and even nationally-owned business were suddenly made to compete against foreign giants. Their political structures became flooded with money representing foreign interests, which almost always wins over the demands of a local population seeking more rights.

More so, free trade created a race to the bottom for many nations. Often, the political and business elites of poorer nations lure foreign capital by advertising that their people lack labor rights and can be employed for minimal amounts. They advertise that foreign capital can be assured the government will never enact any legislations or take any steps to change this dynamic. Neither American workers nor their counterparts in foreign nations should be forced to engage in a race to the bottom when it comes to wages.

Free trade has been devastating on all ends. Its negative consequences to the economies of the poorer nations have only exacerbated America’s problem of unregulated immigration. We must deconstruct free trade to allow the economies of poorer nations to evolve without the unduly interference of foreign capital and the political power it can afford to buy within their societies.

We must be honest about how our broader foreign policy also directly affects immigration. We must ensure that our policy is not to engage in endless meddling to protect private financial interests that are counter to the needs and development of local populations. Just as deconstructing free trade would allow poorer nations to evolve their economies and strengthen their middle classes, we must allow those same nations to evolve politically without US interference, either covert or overt. We must limit ourselves to providing honest guidance and assistance based on a mutual respect and never by engaging in policies that usurp their local interests for the benefit of private money.

Miscellaneous: I support fulfilling the promises of the Dream Act. I support the continued acceptance of war refugees into America pursuant to longstanding UN and US placement programs.

 

3) Education Reform

Our centralized education system is failing America’s youth. I support the termination of federal standardized testing and a restructuring of the Department of Education. While maintaining a reduced supervisory role over curriculum, I support changing the primary function of the Department of Education away from drafting standardized curriculums to providing local jurisdictions with assistance on capital projects and funds on a per-student basis.

We must allow the states and local communities to have more authority and control over the curriculum of America’s children. The centralized system has only helped America’s youth fall behind their foreign competitors. By requiring total commonality and not allowing for any independence of curriculum, we are anchoring our best and brightest to a lowest common denominator rather than allowing them to develop at their own pace with support from their schools.

With every change in the White House, the centralized system shifts to help achieve the political goals of the incoming party. This leaves America with a fractured education system that has only gotten worse over time. For decades, the administering and development of America’s educations programs by DC bureaucrats has been a race to the bottom.

We must allow the States and local jurisdictions to take more control over the education of their youths while also providing the funding assistance needed.

We must provide more trust in local communities to provide education programs designed to uniquely fit their communities and enhance the educational experience of their students.

We must allow local communities to engage in teaching and use their discretion rather than require a nation of kids to memorize pamphlets and standardized test questions.

We must enable schools and communities to devote resources to music programs, art programs, PE, drama programs, etc., rather than devote all resources to complying with an unbending common curriculum.

Allowing each state to develop its own curriculum, as they once did, will also result in a laboratory effect of teaching methods, education practices, and curriculum structures. In time, this will show us which methods are more successful and less successful, enabling struggling jurisdictions to seek out examples of successful structures. We must allow those who can do better than the federal government to do so. We must not hold them back.

With a central system, it is one-size-fails-all. Changing the structure of the Department of Education, terminating the standardized tests and limiting its power over curriculum will help restore America’s education system as a world leader.

Miscellaneous: I do not support zero-tolerance policies. I support teachers and administrators exercising sound judgment in determining whether an act should be reprimanded or merely ignored. I do not support punishing students if they do something otherwise innocuous, like playing cowboys and Indians or shooting someone with an imaginary gun.

Regarding college financing programs, I support limiting the re-sale of debtor notes among private creditors and capping student loan interest rates.

 

4) The War On Terror

While there have been many errors and crimes committed in the execution of the War on Terror, against both American citizens and foreign nationals, time machines do not exist and we must determine how to go forward from the present.

Within the War on Terror, we must win an ideological battle. Not with words espousing a superficial devotion to the rule of law and rights of man but with actual actions and practice in the face of adversity.

Not killing innocent civilians while hunting terrorists, either as a result of collateral damage, erroneous targeting, or callous and loose operating procedures must become a real objective in this conflict. Not violating the human rights of prisoners and treatment of all in accordance with honorable principles must become paramount to our methods of operation.

For every innocent person killed by an American drone or bomb, we create multiple (the amounts of) enemies from their family, friends and communities. For every person imprisoned and tortured within an American facility, or by a government propped up and supported by us, we lend credence to the words of our enemies that we only intend harm. We must defend ourselves while applying our principles and not merely pay lip service to them.

To achieve these objectives, I support greatly restricting and restructuring America’s armed drone program to prevent the deaths of non-combatants.

I support ending American’s extra-judicial assassination programs, closing Guantanamo Bay and America’s many black-site prisons.

I support restructuring our overly-supportive relationships with several nations within the Middle East, including Saudi Arabia, Israel, and Qatar, among others.

I support greatly limiting the amount of military aid provided to several regimes throughout the Middle East, Central Asia and North Africa, though not its full termination. We cannot achieve our global objectives of peace and stability by funding and arming regimes and governments that routinely violate the human rights of their constituents or those around them.

I support continued negotiations, nuclear agreements with monitoring, and peace with Iran.

 

5) The Patriot Act And Civil Liberties

I support the repeal of the Patriot Act, a total restoration of constitutional rights taken since 9/11 and an end to warrantless surveillance and detentions.

While police reform is generally an issue controlled by the states, there are many ways the federal government can help ensure proper police practices. I support buying body cameras for law enforcement officers or providing jurisdictions with financial incentives for their use. The use of body cameras not only helps prevent bad policing but they also help save administrative and judicial costs. Many cases are dismissed outright or resolved via plea, and without costly trials, solely because of the power of video evidence. This is also true if a civil case evolves from the matter.

I support increased funding and expansion of the Department of Justice to investigate more cases of civil rights violations by police. I support the termination of military training to police jurisdictions where abuses are prevalent and provision of civil rights trainings to all police jurisdictions.

 

6) Investigations Into And Prosecution For Past Crimes Of Government, Business, And Various American Individuals And Foreign Citizens And Entities Within US Jurisdictions

We have seemingly lost any ability to hold many people, whether they be wealthy private citizens or powerful government officials, to any measure of criminal accountability. We cannot rely on or expect partisans to do anything more than grandstand when it comes to applying the law because they themselves must worry about covering their own crimes or the crimes of their allies.

We must find a way to restore accountability to all levels of government and start afresh.  We cannot allow the criminal and hidden baggage of the past to continue to weigh down our future. Yet this is no simple task and the breadth of such an endeavor requires more than recycled promises from elected officials to behave better.

There are too many scandals and crimes for any individual or agency to investigate. And the lack of transparency in government makes it impossible for us to perceive the true scope of crimes committed by powerful people.

I support the creation of an open Truth and Reconciliation Commission. While broader in scope and power, this commission would be similar to the mechanism used by South Africa after the fall of apartheid and would investigate past crimes, including war crimes, discover victims and identify perpetrators, and establish a method of reconciliation on a morally accepted basis that allows the country to more forward once and for all.

To protect as best as possible from conflicts of interests, I support empaneling such a commission with elected members of the citizenry but excepting any person who has held or holds elected office (or their spouses), any lobbyist (current or former or their spouses), and current members of government, either federal or state (or their spouses). I support empowering this commission with the full subpoena, investigatory and charging authority of the federal government.

The creation of such a commission or investigative body, free from the leveraged interests of Congress and big business, is the only method by which people will be held accountable for past crimes. It is the only method by which the American public can restore accountability to Washington and the elite…or for Americans to know what is being and has been done in their name while finding a way forward. Otherwise, we are left to the empty promises of corrupt partisans or the law enforcement officials under their thumbs.

 

7) Decriminalization Of Marijuana

We know the economic and health benefits associated with the legalization of marijuana. But further, criminalizing it comes with unbearable societal costs that we aren’t measuring. Every time a youth, most often a minority, is arrested and convicted of a marijuana charge, we stifle the progress of their lives. This does not take into account the actual financial costs to government regarding the amounts spent on arresting, processing, jailing, adjudicating, paroling, and monitoring non-violent marijuana users.

Beyond those measurable costs, the long-term societal costs may be worse. Arrests and criminal records make obtaining a college education or job more difficult, sometimes impossible. By criminalizing marijuana, the state is sandbagging the futures of too many Americans, making it more likely that they will end up a part of the growing welfare state. Along with the front-end costs of policing marijuana, we are swelling our budgets on the back end as well.

We should not be placing unnecessary barriers on the progress of the lives of so many Americans. Especially when a system of regulation and taxation has been shown to work in several jurisdictions throughout the world and USA. I support the federal decriminalization of marijuana.

 

8) NCAA Reform And The Expansion Of Professional Sports

It is time that Congress addresses the gross inequities that pervade within the economies of sports. We generally avoid thinking about the structures of American sports because we view them as mere games. But these sports have developed into billion dollar industries that affect a lot of lives, especially America’s youth.

A) NCAA Reform

The NCAA, in many regards, has created a system of lawful generational theft. They own a monopoly on the path to professional sports and use it to profit in every way possible from young Americans. Doing so while exercising draconian rules against their behavior, holding their career hopes hostage. I do not believe that major universities give scholarships to athletes because they care about providing an education to them. Or that these athletic programs are truly done to enhance the educational experience of college. They are profit making schemes.

We cannot pretend that handing a kid a scholarship and a dorm room is equitable compensation for what the athlete brings to the school. For a university, a scholarship or simply not charging a student is cheap currency. For the athlete, he must take an uncompensated gamble on his future while at the same time actively doing an activity that is generating millions in profits. Yet by rule, they are prevented from demanding any further compensation. Or rather nothing more than the cheap currency of a scholarship, often coupled with a cookie major that cannot prepare them for the future but allows plenty of time to practice. I do not believe being a student athlete means you must yield all economic rights to administrators. We must stop treating young Americans, often minorities, as profitable athletic fodder for old men.

I believe in individual rights and protecting those who have the least bargaining power, like Americas young athletes, from unjust exploitation.  I support allowing negotiated compensation to students athletes when engaged in profit-making activities, including allowing them the full use and control of their likeness for individual profit. We must not let fears of individual cases of financial malfeasance justify an oppressive system that harms tens of thousands of normal Americans each year.

B) Expansion of Professional Sports

Not only should NCAA be reformed, the federal government should not protect the monopolies of America’s professional sports leagues. Congress should remove all anti-trust exemptions given to professional sports leagues and pass legislation empowering the FTC to ensure that new entrants are permitted based on an objective standard and identifiable criteria.

There is no modern justifiable reason that leagues like the NFL or NBA should enjoy a monopoly and be permitted to prevent new businesses from joining the competition, even if the new business seeks entry within an already saturated market. The closed-system leagues must not be allowed to construct subjective and shifting barriers to entry into a marketplace. And fandom alone should never trump the public benefits of economic competition.

If an investment group or an individual desires to start a sports team, and can meet a pre-determine standard with reasonable threshold requirements for capital funding, business structure, etc, then they should not be required to seek the permission of already established entities to compete. The leagues can adjust their structures accordingly to their desire to meet an influx of new entrants.

Every team created, like any business, means jobs and tax income based off of those jobs. As an example, the NBA has thirty teams, thirty administrative staffs, thirty coaching staffs and player rosters. In total, a few thousand people involved in the sport, deriving incomes they spend in their communities and taxable to local, state, and federal authorities. Along with the direct employees, many thousands more rely on the income the sport create,s including support staff, stadium vendors, merchandise manufacturers, hotels workers, security staffs, local law enforcement agencies and so forth.

With an open system allowing competition, there would not be only 30 professional teams across each sport. The amount would be determined by how many teams the American sports market could handle. It would not be limited to protect billionaires from facing increased competition. For many cities or states like Iowa or West Virginia, such a system is only the method by which they ever likely to have a pro-sports team.

Accordingly, there would be multiple the amount of executives, managers, trainers, vendors, manufacturers and athletes. While deconstructing free trade would take many years, if not a decade or more, the expansion of professional sports may be the largest short-term job creation vehicle available to our nation. Job creation that would also benefit the many minority groups that represent a large percentage of the labor within the sports industry. And unlike other industries and despite our current free trade policies, these jobs cannot be exported.

Creating objective standards to entry and enforcing capitalistic principles of fair competition would also eliminate long-standing concerns regarding minority ownership of sports franchises. In order to compete and start a franchise, minority-controlled ownership groups would no longer need permission from rich men hoping to maintain their monopoly.

Beyond job creation or concerns regarding minority ownership , ending this system of corporate protectionism would end the game of exploitation teams routinely play with local governments when asking for handouts to build new stadiums. We allow these leagues to limit the number of entrants and their individual teams are able to hold towns hostage with the threat of departure. As there can only be so many teams in the leagues, the threat of a team leaving leaves local populations with the tough choice of coughing up millions or saying goodbye to professional sports with little hope of its return.

This scheme of public exploitation would not exist if these protected businesses knew that a new entrant could immediately fill the market they left. Cities and towns would not feel as compelled to hand over money, often previously allocated to schools and social services, to a private business. Rather than be able to dangle the threat that a town would be permanently left without a sports franchise, the towns would know that if their market can support a franchise, another ownership group will come along.

The current system places all the negotiating leverage with private businesses and they use their leverage to extort local politicians. Requiring objective standards to entry within the sports marketplace would switch the dynamic and place the leverage with public officials and save billions for cities and towns across America.

The potential benefits of reforming the economies of sport would be far reaching for many Americans. Unfortunately, the potential economic impact and benefit to us all through direct or indirect employment, tax revenues, or public finances, is prevented to preserve the status quo of current monopolies and billionaires. I support reforming the economies and structures of American sports, both collegiate and professional.

 

9) The Environment

I support strengthening our environmental protections regarding the release of harmful pollutants and metals by heavy industry. Including, by example, in the case of the BP oil spill, levying criminal charges for dangerous, reckless or negligent business practices.

I support further funding and regulation to ensure clean sources of a freshwater for future generations, including further anti-fracking regulations.

I support further protections and conservation of wetlands, forests and natural habitats from unregulated development.

I support expanding the National Parks system to conserve more land for its natural purpose.

I do not support global warming alarmism. I do not support carbon taxes on greenhouse gases. For over twenty years, too much federal funding and too many resources have been devoted to promoting and advertising global warming as tomorrow’s disaster. This alarmism has been largely based on movie-like hysteria, consistently failing weather models or shifting standards.

This devotion has come with a large opportunity cost in that the billions spent promoting these fears could have been spent on more legitimate environmental causes. Rather than continue to devote federal funding in its current amount to global warming initiatives, I support re-directing much of that funding to more traditional environmental issues, such as those mentioned above, or scientific research, including NASA.

I support more vigorous regulation and oversight of the American nuclear industry. Nuclear power is vital to our nation’s infrastructure. But ensuring against negative events within our nuclear industry is an activity for which we must be proactive and not reactive. Nuclear power is relatively young and in its short life, we have seen two catastrophes occur in Chernobyl and Fukushima. We must be certain that even in the case of an unexpected weather event, we are protected from such a calamity occurring on American soil. We must be certain that America’s nuclear power plants do not operate with sub-standard protocols and that violators are brought into compliance. Including, if necessary, the federal takeover of facilities and accompanying civil or criminal liability to violators.

Further, as nuclear disasters affect the global environment and oceans, we must be proactive, independently and in coordination with the IAEA, to ensure that all nuclear nations implement and utilize adequate safety protocols in the construction and operation of their facilities.

 

Conclusion

Thank you for your time. I’d like you to know ________________________________

_________________________________________________________________

_________________________________________________________________

{Explain your reasons for running in selfless terms so it is inferred that personal gain and success are not motivations. Employ overdone political slogans such as “we need to clean up Washington”, “I’ll fight for you”, and “I stand against big business.” Provide a final description of yourself using positive resume words like ‘trustworthy’ or ‘hardworking’ as often as possible. Never forget to harp incessantly on prior experience in the military, law enforcement, as a prosecutor or with prior office. Repeat the last sentence. At the very end, no matter what is your opinion of religion, state “God Bless The United States of America.” Good luck.}

 

Major League Soccer, Who Are You?

usa_soccer_world_cupThis ends only in speculation and is an attempt to catalog my thoughts and actions since Thursday. This is long, starts one way, ends another and has no resolution. I warned you.

A few months ago, we started this rambling site to flush out thoughts stuck in our heads and somewhat go on record with our opinions.

The first thing posted was “The Effects of Promotion and Relegation on American Sports”. Just always seemed like such a no brainer. Shortly after joining the site, I dared to venture out to Twitter to see what others think and engage in various discussions. Being new to twitter, I did not know what to expect. I am stunned at the amount of political cartoons (I know how to define hypocrite, thank you) and simple-minded bickering from all sides and every interest group.

However, if you think the political arguments have lost all sense of reason on twitter, I suggest you survey some of the back and forth between those who desire promotion and relegation and those who do not. It is pretty vicious. By example, just take a look at how much Ted Westervelt, @soccerreform, pisses these people off. He may be MLS’ public enemy numero uno. Either him or Jurgen Klinsmann. All because of their support for promotion and relegation: Mr. Westervelt consistently and Mr. Klinsmann occasionally but from an international media platform.

Personally, I do not like spinning my wheels in slow-moving endeavors. The very diligent Mr. Westervelt and the knows-something-about-soccer Mr. Klinsmann hope to change the game by creating public support and therefore putting pressure on MLS from its fans. A fine strategy but not the shortest path between two points in my humble opinion. Especially when confronted with an army of blindly-loyal MLS team fans, MLS employees and access-reliant media members. All of who are willing to waste hours of time with you arguing over of the pros and cons of changing the system.

I have always viewed promotion and relegation as an incredibly undervalued money-maker for all parties: the owners of the league, private team owners, American workers and our government while not even addressing the undeniably positive effect on the quality of play and development.

To me, the best and quickest option to get this done is to show rich people why it makes sense financially for them. And these kinds of people like boring reports with charts and projections and data for them to consider.

So I was going to create a mock business plan. Essentially, I was going to construct a report showing the benefits of:

  • Announcing the creation of open system hierarchy, dictating entry/membership fees, merchandising and TV rights allocations all controlled by MLS;
  • Selling off the teams at current values (as listed by Forbes) with a premium for the large-market established teams and smaller premium for all teams which would be included in the top division in the first year.
  • Using European or East Asian examples, show a representation or template of the fee structure for established teams as well as new entrants.
  • Using European or East Asian examples, provide some kind of real world example to highlight the positive earnings of the league hierarchy year over year.
  • Using NASL/Whomever attendance figures, point out there clearly exists 40 teams ready for a two division national structure in the USA. (Brazil had only two twenty team national divisions until 2009, when they rearranged after too many smaller teams had grown large enough to support increasing the national hierarchy)
  • Propose a regional structure to accommodate new and small teams since the United States is gigantic
  • Using the US Census, project the number of cities able to accommodate a team in such a hierarchy, also projecting the potential number of employees/players/team workers at a rate of 1 team per city.
  • Reflecting that under modest rate of 1 team per eligible city, MLS’ scope would surpass all sports organizations except perhaps NCAA initially.
  • Using plentiful European examples, note the humble facility and player salary requirements necessary to start a successful small club. – America’s high schools would suffice as stadiums for many new teams and they would still have larger capacity than many lower division European counterparts.
  • Noting the benefits of Billionaire Toy Men throughout the open systems of the world. Many individual teams like Real Madrid and Chelsea operate at massive losses because their billionaire owners do not care and are always willing to put more money into their toy. This cash influx strengthens the league and heightens interests by bringing players who would otherwise never come a la HAVE YOU SEEN REAL’S LINEUP AND BENCH!?! IT’S INSANE!!!
  • Reminding that leagues don’t actually care if the teams lose money or dissolve…i.e. no financial risks or worries regarding failing teams. Replacements are ready to fill the gap from the league below if an adjustment is needed. The league still gets paid and controls everything.
  • Finally, doing a lot of math and charts and providing some kind of revenue projection to a company operating the hierarchy alone in America, using whichever modern example I could locate and adjusting as best as I could justify.
  • Showing that while 20 or 25 MLS teams will never compete with aggregate economic market share of any of the big leagues individually (MLB/NHL/NBA/NFL/Liga/EPL/Bundesliga), a hierarchy of hundreds of teams in the USA (1st ever system here) would eventually match their market share and perhaps surpass many of those mentioned, with a rising tide rapidly increasing the value of the larger market or long-established teams. (My plan was to figure this math projection out later or fudge it completely – when you go this far, you do not turn back)
  • Noting the current single-entity structure means only MLS is reasonably capable of implementing such a system in the United States, thus the competitive advantage obtained against MLB/NHL/NBA/NFL would remain for the foreseeable future. The current structure of those leagues as independent corporations and not a single entity makes a conversion to such a system incredibly unlikely. Only when MLS’ wealth surpasses them would any consider changing and the multiple ownership structure would render it difficult even if a portion of their league wanted a switch to match MLS’ competitive advantage. MLS would likely be the sole promotion and relegation system in America for a very, very, long time.
  • EDITED UPDATE – Discussing the political and social benefits as well as the corporate goodwill having America’s first open system would create because of the positive effect on minority ownership in professional sports.

This was the audacious and somewhat crazy plan I hoped would get promotion and relegation going in this country. So as I started thinking about what it would take to write it, I wondered to whom it would be sent.

I decided I would locate the actual majority owner(s) of MLS since nothing is happening without them taking action, either directly or by allowing a sale of the corporation. It’s better to be denied by the real decision maker, even emphatically with them laughing at you, than to never get to ask the question. And I’d prefer an emphatic denial than arguing on twitter forever. Plus, it can be reproduced quickly if someone with sufficient capital power and balls is ever identified and within my meager electronic grasp.

As it is, another unfinished odyssey began.

So who matters in MLS and who doesn’t? And who are the majority owners?

When looking for info on any corporation, start with the best in the business: Bloomberg. MLS LLC is a private corporation so Bloomberg won’t have the data or info comparable to what is displayed for Apple or a public company but they should have something.

While most think Commissioner Garber runs MLS similar to the way Roger Goodoofus runs the NFL, they are very wrong. The NFL is comprised of individual corporations who essentially vote Goodell to be their King. While he can be removed by the actions of the owners together, there is no one above him. And while he is not an owner, he is the one person who is guaranteed to have direct access to and even leverage with every owner.

Commissioner Garber is not that man. He is an employee who may have no access to owners. Though I’m sure he’s aware of the obvious influence of people like Mr. Kraft, he may not even know the exact ownership structure himself. Unlike the NFL or any well-known sports league, MLS LLC is one corporation and its C.E.O is Richard A. Peddie, the former C.E.O. of Maple Leaf Sports Entertainment. At least this is what Bloomberg surprisingly told me.

http://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=4312581

Surprising because there is no mention of this esteemed position on his profiles online or on twitter, where it does list his former work for the Maple Leafs, Raptors, and so forth. (as of date of writing, 3/8)

Searching online was also made more difficult because of the similarity of MLSE (Maple Leaf Sports Entertainment, also an MLS team owner) and MLS itself but it is clear Mr. Peddie’s rule atop the league is obfuscated.

While @thesoccerdon (Commisioner Garber) has 150K twitter followers, the actual don of soccer has only 3K (as of Friday 3/6) and seemingly no one knows how powerful he is within American soccer. I have cousins with more followers. Imagine if Mr. Goodell’s or Mr. Stern’s powerless underlings had 50x the Twitter followers than them.

Nevertheless, someone was located for whom I could plausibly locate a business address and deliver a letter and dupe/convince them to read it. And by some small slither of a World-Cup-hoping chance, maybe the report would go up the ladder rung, only one step now, to the real owners of MLS LLC.

But I still had two questions scratching my curiosity.

  • If Mr. Peddie never gives it the time day (99.X% probable), who are the real owners so I can email bomb/somehow get it to whatever capital corporation they use as vehicle for their bidding (i.e. if it were Warren Buffet, I’d email bomb/certified mail the Board of Directors and various analysts/idea-needy-employees-looking-to-impress at Berkshire Hathaway – not Warren or his family themselves even if I could locate such contact info.) In fact, why not just do my best to go over Peddie’s head straight to the majority owner(s)?

And

  • Why has Mr. Peddie been hiding from what appears to me to be a pretty freaking awesome job? Since I planned to go over his head anyways, I decided to ask him directly. And about a lot of questions about promotion and relegation and MLS LLC.

While he maintains an active twitter account, he ignored me so I checked another favorite corporate site called Corporate Wiki looking for any data or leads.

http://www.corporationwiki.com/New-York/New-York/major-league-soccer-llc/34579837.aspx

You’ll notice MLS LLC is linked to an alternative/sister corp called MLS Partners LLC, which I didn’t think much about at first glance. I did ask Mr. Peddie but he ignored me.

As corporations file reports in many states, a site like Corporate Wiki will pull many duplicates from the public records. Here is the one from Florida:

http://www.corporationwiki.com/New-York/New-York/major-league-soccer-llc-6340548.aspx

Following the information provided, I checked Sunbiz.org, Florida’s Department of State site and located a list of twenty-one corporate directors I refuse to type:

Directors One

Directors Two

It should be intuitively obvious who owns a couple of these corporations but no information on ownership percentages or voting rights is provided.

Since MLS LLC is a large corporation, they get sued and sue people. If you have never been sued, there is this nasty thing called discovery where parties often have to file revealing information into the court system. But guess what, MLS has good lawyers and solid strategy. In every federal case in which they were a defendant (since 2005), they either won on Motion to Dismiss or settled before discovery was due. At least a couple of times with a discovery deadline looming large. There is no recent data on MLS LLC’s structure in the federal court system which I could see.

So next came logic. The voting power within MLS LLC has likely never changed since its inception or rather not significantly. Why would it ever? If you controlled a corporation, the only way you would ever yield voting power to a new investor or another party is if the corporation was struggling and desperately needed a capital infusion or you wanted to spread the risk of failure to others because you are worried. After its initial survival, the default risk of MLS was too low for an owner to consider selling voting stock to avoid financial loss in the event of failure. There is no need to worry about this. If MLS itself were struggling financially at any point, rest assured the billionaires behind the scenes are not. They would merely infuse cash and keep their stake since they themselves, or the parent corporations they control, are not struggling. And even if MLS LLC needed cash to grow or for a capital project, the parent corporations would likely infuse cash rather than yield control to a new investor.

It is a presumption but more than likely, new investors or these “entrepreneur groups” that manage individual teams are only offered restricted/non-voting stock or minor voting interests. There is absolutely no logical reason to ever sell a significant voting interest within MLS. If a potential investor doesn’t like it, tough shit. MLS doesn’t financially need the new investor so much that it would agree to yield power. They’d just wait for another sports-enthused rich guy to come along who’ll happily get paid from a non-voting position and toy around with a team. The World Cup rejuvenates interest in MLS every four years, anyways.

So in searching for the original owners and limiting Google to hits before 1997, the best thing I could find was this Fifa news report about the new MLS league.

http://www.fifa.com/world-match-centre/news/newsid/714/11/index.html

Investors:

Boston: Robert and Jonathan Kraft; Columbus: Hunt family and a group of Columbus investors; Denver: Philip Anschutz; Kansas City: Hunt family and a group of Kansas City investors; Los Angeles: LA Soccer Partners, presided over by Marc Rapaport; New York/New Jersey: John Kluhe and Stuart Subotnick; Washington D.C.: Washington Soccer, L.P., led by API and presided over by Kevin Payne.Dallas, San Jose and Tampa as yet have no investors and may have to be financially supported by the league itself.

Going through the names, the biggest hitters I can tell are:

  • The Anschutz Family and therefore The Anschutz Corporation (mega-big, private), led by Chairman of the Board and owner Philip Anschutz. (TAC is in Denver but Los Angeles is Mr. Anschutz home/sports focus)
  • The Kraft Family and therefore The Kraft Group (mega-big, private), led by Chairman of the Board and owner Robert Kraft. (Boston)
  • The Hunt Family and therefore the Hunt Sports Group, LLC (mega-big, private) led by family patriarch Clark Hunt, son of departed Lamar Hunt and grandson of oil tycoon H.L Hunt (Columbus, Kansas City, Dallas)

The other guys are rich too but there is no way the three above handed over any amount of money without significant control from inception. Also, The Hunt Family and Anschutz Family are related together through a marriage so while I don’t know how independent/connected their interests are, we can assume at least some kind of close or amicable relationship regarding MLS. With Mr. Kraft as well but he does not appear to be as closely connected as Mr. Anschutz and Mr. Hunt are to each other.

It is clear promotion and relegation will not happen in America unless it is done by one of the three parent corporations controlled by these men or them in unison. There is no point in arguing with Alexi Lalas, whose brother is MLS editor-in-chief, or any media member connected to or paid by MLS. It is not their fault either: employees do not get to rock the boat of their own company. Go try it yourself and see how well it goes.

At this point, I was relatively certain I had located the entities who were more than mere minority holders with voting rights but rather the exact majority owners. Granted, the whole thing may also be owned by Lord Rothschild, the Ayatollah and Kim Jong-Un but it appears there is no way anything happens in MLS without the three above letting it happen.

There is also slight empirical evidence supporting this on the pitch. Is it a marvelous coincidence the hometown teams of these power brokers over-perform in MLS? Admittedly, twenty years is a not a large sample but MLS is a single-entity structure with player allocation rules and restrictions designed to provide parity. It is portrayed as pure competition but it is a toy they own and if they so desire they can subtly do as they please. While no one can control who scores a goal, it is essentially the WWF version of soccer. Go Wizards! Go Revolution! Go Galaxy!

I should have stopped here and started the report.

But what the heck is MLS Partners, LLC?

http://www.corporationwiki.com/p/2espfd/mls-partners-llc

(originally created in Delaware on 2/19/2014 but also recorded in California)

Corporations start other corporations all the time for various reasons. They are easy to start. So since first seeing it, I just presumed it does something ordinary and trite.

But I could not stop wondering. I could not find any news about it either and corporate wiki says it was only created last year. If the NFL started a joint corporation or venture, or does anything anywhere, there is always at minimum an online press release followed by an army of click-needy sports sites. Yet I could find nothing and the cross-references with other entities drowned out every search.

It does not appear to be an owner or part of MLS LLC but rather MLS LLC appears it may be an owner of it. So I tweeted Mr. Peddie, who I had been peppering with tweets and questions as well as Commissioner Garber hoping they’d respond if even a no comment. I would have pinned your ‘no comment’, Mr. Peddie.

After being sufficiently annoyed by my repeated questions and tweets, Mr. Peddie simply blocked me. They could have just said it was a marketing vehicle or anything bland and I’d probably left it alone. I pondered starting a new handle just to ask him more questions but thought he may at this point wrongfully construe me to be some kind of stalker.

When you are in a rabbit hole, sometime you fail to see what is going on overtly at the surface. I had completely forgotten MLS is negotiating a collective bargaining agreement, which will dictate exactly how everyone gets paid going forward.

Early in my career, I was at an organization under going such a negotiation and I wanted to be on the union team even if just to learn. This was a good-guy, for-the-people type of organization too. To bystanders and myself going in, you would have thought they’d behave appropriately.

Immediately, management said they are struggling financially and we’d all have to accept no raises rather than what was provided in the past plan. They bellowed and whined in a self-righteous manner about how all of our jobs are so valuable and we should be so happy to not be searching like all the other unfortunate souls out there.

We asked politely to see a current account statement of all accounts and tax returns for two years so that we could be sure the corporation was struggling to a point where we would need to accept their horrible first offer. Let’s just say we did not get good looks from across the table that day. They did not expect this request and because they had brought nothing, we had to adjourn. The next day, they brought a budget from an excel spreadsheet and said this is “the situation”. We advised a budget is useless in determining health unless we can see the actual results and pre-projections of last year’s budget to compare as well as the documents demanded yesterday. We adjourned again but without rescheduling a date to continue. Annoyed, we searched ourselves and obtained five years of tax records because they had a hidden reporting requirement with a particular agency that maintained an active website we could access publicly.

Guess what? The mofos were lying through their teeth. The organization was in awesome financial health and negotiations ended with a properly increased raise plan rather than what they wanted.

This is how bargaining negotiations go. One side hides the ball to project a worse financial situation to get a better deal. Imagine yourself as a tourist in a market overseas: You do not let the merchant know how much money is in your pocket when negotiating the price of whatever you want to buy. Same principle applies.

MLS LLC was the stand-alone umbrella corporation for all of Major League Soccer since 1995. In 2014, they founded/became involved with a sister corporation, MLS Partners, whose purpose is totally unknown. In 2015, they undertook extremely valuable collective bargaining negotiations with the players union. I still believe in the high probability MLS Partners is completely innocuous. I would not be able to conceive the size of the balls of these guys otherwise. Enron-ish. But the timing is definitely curious and modestly suspicious.

So after all this and getting distracted from my original purpose of doing a report to convince rich men to see an obvious light, I am left wondering if MLS would dare commit large-scale commercial manipulation (fraud?). Doing it so they would be able to present the Players Union with financial statements from MLS LLC which would be stamped, signed and audited appropriately but not showing the full picture of the organization.

All of this can be resolved with one question to the Players Union: Do you know of MLS Partners, its purpose or its financials and did you know prior to getting strong-armed?

EDITED 4/8(((: Of course, no one in MLS is going to answer me no matter how many times I ask. And the Players Union has not responded either despite my emails, phone calls, tweets and various attempts. Deadspin and Gawker media advised they would seek an answer, along with others, but no response from either MLS or MLSPU has been made known. )))

Depending on what the answer is (and if it is ever received), this could go several different ways. Some of them would not be good for many people. I hope it was disclosed and not another casually ignored secret like Mr. Peddie’s role as C.E.O. of MLS LLC, as indicated by Bloomberg News as of 3/8/15. Or the other secret regarding the exact ownership structure of MLS LLC.

But maybe, just maybe we will find what is going on within MLS and why the organization sanctioned as division one in America operates so shadily.

_________

As for the business plan, it will have to sit for a while. If some college finance major or graduate student would like to do it as a project, you’d get an A from me. Also, please let me borrow it if you don’t mind.

Finally, if you desire to make an attempt to change the system here in America, I suggest you speak in terms of $$$ rather than sense. That is all these people care about. Do not hate. It is normal.

___________

Edit: Fraser vs MLS discussed the structure in 2002. There is no reason to think this has changed. And as MLS became profitable, it is even less likely to change.   Fraser - MLS structure 1Fraser - MLS structure 2

————————

The Effects of Promotion and Relegation on American Sports

When thinking about it there is no reason major sports leagues like the NFL and NBA should keep their anti-trust exemptions and be protected from outside competition. Doing so is anathema to the ideals of capitalism and limits the economic growth of each sport, hurting the consumer and the sport itself. Gosh darn it, it hurts America! Switching to a system of promotion and relegation would multiply the economic reach of each sport within our country as well as increase the quality of the athletics for the spectator. It might even lead to a World Cup trophy one day.

If you do not know how relegation and promotion works within a league, we will use England’s Premier League system as an example. This same system is repeated across every team sport in almost every country in the world.

The Premier League is comprised of the twenty best teams in English football (soccer). The twenty teams competing in the Premier League each year have no right to be in the league other than the right they have earned through past performance. The three teams which finish at the bottom of the standings at year’s end are subject to relegation to a lower league. Oddly, England’s second tier league is called “the Championship”. Teams which finish at the top of the Championship are promoted to the Premier League. This process is repeated throughout the multi-league structure. How many leagues are there? It depends on how many eligible teams there are within the overall system. In England, there are currently five leagues considered professional national leagues. Below, there are seemingly countless divisions of professional and semi-professional leagues, eventually split among geographic regions.

Levels_9–10_Football_League_areas_in_England

Levels 9 and 10 of the pyramid of English football

The beauty of this system is it is open, inclusive, and creates natural incentives for success. It allows the sport to grow unconfined by the top league. If you or I wanted to own a professional football club in England, we can start one without having to save billions to buy an existing team. It does not mean you can get ten of your friends together and start playing.   Each country’s association sets up different requirements for starting a new franchise. This usually involves approving an organizational structure, modest stadium or field requirements and perhaps capital requirements to ensure the new entity has money to survive a season or two. But this is far from the 40,000-person stadium and capital reserves of 1 Billion or more it requires to get an expansion franchise in American sports. Starting on the bottom league generally means having a field with a seating capacity of the 10,000 with capital requirements affordable to entrepreneurs or small business ownership groups.

Not exactly Old Trafford

Not exactly Old Trafford

So why do this? Why shake up everything? After consideration of the benefits there are no reasons to not. I dare say logic and the current state of our economy require it be done. We will talk more about the economy below but let us first focus on how relegation and promotion is likely to affect the quality of athletics.

In this system there are no Cleveland Browns or Jacksonville Jaguars stinking up the field every year and making us wonder how a team could be so bad for so long. You do away with pathetic losers. They and their inept management would be shifted down the league rungs accordingly until they were placed in a league commiserate with their abilities.

Perhaps just a league or two above these guys

Perhaps just a league or two above these guys

I know it may be harsh to call those teams pathetic losers. Especially when the truth is current league structures create no incentive for bottom teams to compete. They can collect a check in last place. Why worry about winning too much? The Florida Marlins are a prime example of this business model: spend nothing on the franchise; sell successful players at every opportunity; lose the vast majority of years but always rake in profits. Every now and then you may luck out and still win it all (not if you’re Cleveland though). These businesses are designed to earn money and not win games because the system makes it so that they can earn money without winning games. The incentives are misaligned and we all suffer because of it.

Relegation and promotion ends this nonsense. In the Premier League each team receives around 50 million pounds for its operations derived from joint revenues, TV rights, etc. This revenue sharing is similar to the NFL except of course if you lose too many games you are booted from the Premier League. Contrastingly, you can go 2-15 forever in the NFL and always collect your check. The Jaguars are laughingstocks but at least they are rich laughingstocks.

Yes, I'm jealous.

Yes, I’m jealous.

In England (and the world), teams who get relegated will receive the apportionment equal to every Championship team but it is much less than the amount given to Premier League teams. These apportionments continue in decreasing amounts down the league rungs until at some level there is no apportionment. Those lower teams must survive economically on their own and based on their own management/ownership skills. The apportionment is usually only given to teams in national leagues since it is important in offsetting travel expenses. A system of relegation and promotion would replace bottom feeder teams with new, hungry, successful teams that have earned their spot through their recent success. Out with the old and lazy and in with the new and ambitious.

Another complaint many raise about the NFL is the style of play is not diverse unlike college where teams which run standard NFL-style schemes play against whacky high-flying Mike Leach offenses or run-read-option teams and everything in between. Across several professional leagues styles of play and innovations to the game would certainly be as diverse as college athletics. Likely more diverse since the coaching staffs would not be constrained by NCAA time limitations about meetings and practices.

Popular players like Tim Tebow or Vince Young or Michael Sam would not have to ride the bench or be excluded from the sport if they cannot find a job for one of thirty teams. There would be hundreds of teams available to these players whether it be in the top league, second league, or seventh league. The debates amongst obnoxious talking heads opining about the capabilities of said players would be settled on the field. This is true for every sport.

The best part for the spectator is the drama. More meaningful games at the top and bottom of each league means more last minute drama and magic moments. Tense finishes would unfold across each league towards the end of every season as the next round of relegation and promotion approaches. Teams desperate to advance and desperate to avoid relegation provide some of the best moments often from lower leagues. Remember how Manchester City won the Premier League in 2013, scoring two goals in the final five minutes of their last tie to edge Manchester United. It was heralded as the most dramatic final day in Premier League history.

But there was better drama in the league below. My personal favorite is this ending from the Championship a few days after Aguero’s famous winner for Man City, between Leicester City and Watford. Both teams were fighting for a spot in the Championship final and potential promotion to the Premier League. It’s 2-2 on aggregate with Leicester City already in the ascendancy based on away goals. Watford desperately need a goal but Leicester City has been awarded a dodgy penalty in the 95th minute, much to the overwhelming anger and dismay of Watford fans….

Love that celebration!

Broaden the sport and you broaden the fun for spectators by creating more magic moments.

While increased competition, innovative coaching, creative playing styles, great drama and removal of consistent losers should be enough to get every fan of team sports on board, there is a more important reason to support relegation and promotion: economic impact. America needs it.

In the NBA there are thirty teams, thirty owners/ownership groups, thirty GMs, thirty accompanying staffs and player rosters.  It all adds up to a few thousand people involved in the sport making incomes they spend in their communities and taxable to local, state, and the federal governments. Along with the direct employees paying their bills and taxes, there are many thousands more whom rely on the income the sport creates including support staff, stadium vendors, merchandise manufacturers, hotels workers, security staffs, local law enforcement agencies and so forth. With all of these people getting paid, they pay their taxes and buy the goods and services we all do and which helps our economy.

Professional sports are not just innocent pastimes anymore. They are major economic forces which affect a lot of lives. Unfortunately, the potential economic impact and benefit to us all either through direct or indirect employment or tax revenues is limited to preserve the status quo of current monopolies.

In a system of relegation and promotion, there would not be thirty professional basketball teams. There would be hundreds broken accordingly into various leagues both national and then regional stacked in a clear hierarchy. Accordingly, there would be multiple the amount of executives, managers, trainers, vendors, manufacturers and athletes needed in such a broad system. Concerns regarding minority ownership of sporting franchises would be resolved by broadening the sports to allow for new teams in every city in America. The expansion of professional sports may be the largest one-off job creator our country could muster. And unlike other industries, these jobs cannot be exported to China. If that ever happens please take the Jaguars first.

Is there any city in America with more than 100,000 people that would not have a professional basketball team placed in the overall league system? Per the 2010 Census, there are 298 cities in America with more than 100 000. Cities like New York, Chicago, and LA would likely have more than ten. By example there are over 30 football clubs in London in the top eight leagues, six of which are currently in the Premier League.

Further, American players not able to make the roster for an MLS or NBA team will no longer have to travel to South America, Asia, or Europe for development. Granted only those in the top league would make the audacious salaries we all would want on our paycheck but they and their team would have a direct path to the top league with promotion providing the incentive. If you want that payday, then win enough and you will get it.

Jackie Moon

Make Semi-Pro a reality!

Television revenues would increase exponentially. Although the amount of parties taking a cut would also grow, stations would have an over abundance of sports programming to fill every day of the week. While national broadcasters may not pay for and carry every game of a third tier league, regional broadcasters and local broadcasters of involved teams would reap the benefits of this expansion as well as online providers.

And if adopted, how this would affect the current sports hierarchy in this country?

It is unlikely the NFL would make such a dramatic switch. They are the kings of the sports landscape and have no incentive to change. Only an Act of Congress (removing the anti-trust exemption) could force the issue. And we are unlikely to get legislative action from our defunct Congress to do anything much less change a profitable and popular entity like the NFL for some zany foreign idea.

But while the NFL is king a rebellion in brewing. The various scandals and continuous rule changes continue to hurt their brand. This creates an opportunity for other sports leagues to broaden their base while the NFL fumbles the ball.

No sport would benefit more than American professional soccer and its top league, MLS. While the beautiful game has grown steadily in America since World Cup 94 it can never compete with the NBA or NFL. Even a self-loathing, scandal-ridden NFL will always win unless Roger Goo-doofus bans all hitting or something incredibly stupid. I am not ruling that out.  But as is, professional soccer is condemned to compete with hockey and nascar for fourth place.

By adopting relegation and promotion first, professional soccer would be the largest sport in America in terms of participants, teams and fan bases within a couple of years. This would be true as well for the NHL and moreso for the NBA. Soccer would not be the wealthiest though. Let’s not get too far ahead of ourselves. At least not yet. But they would be the largest sport in terms of scope and with that largess the sport would grow organically with fan bases growing around successful local clubs in every corner of the country.

Lots of room to grow

Lots of room to grow

There would be an immediate boost to the development, evolution, and depth of American players. Thousands of players leave collegiate athletics each year giving up their careers and ending their development at 21 or 22. For many this is a choice but for many others it is a reality without a choice. Not good enough to play in the MLS or NASL (or NFL or NBA) and without the means to locate a tryout abroad, their careers end not because they should but because the system we have created dictates they end. We do not have late bloomers in American sports because we extinguish them.

It is difficult to project a players future by the age of 21 or 22 or even 25. We search for the early prodigies at 18 and younger yet they often fail to develop as we hope. Promotion and relegation ends this and provides opportunities for the natural development of thousands of athletes who would not have had the chance otherwise.

The United States is the third largest nation on the planet in both population and landmass, spanning an entire continent and then some (Hooray for Hawaii!). Comparatively, England is tiny in both size and population yet there are hundreds of professional football teams in England. It is difficult to over-estimate how broadly professional soccer would grow its talent base, coaching pool and overall exposure by shifting to such a system. Its far-reaching effect on the sports landscape would only increase over time as the sport would enjoy a natural competitive advantage over NFL, NBA, and MLB.

This diversification of American soccer would allow for a quicker evolution of the best American players. Relegation and promotion creates a laboratory effect which judges different styles of play, management techniques and recruiting tactics. Kind of like capitalism. It rewards successful squads and smart management and punishes others. With teams around the country in an interconnected system of leagues and coupled with America’s natural diversity and size, we would get to see a variety of playing styles from Brazilian dribbling to German efficiency.

As the sport broadens and better teams move up in each league, interest will grow correspondingly. This fan interest is less likely to be from fickle fair weather fans but rather from those whose interest has grown along with their local club. They are likely to remain loyal to the team through thick and thin and remain interested in the overall sport through the long run, teaching their love of the game to the next generation.

But why would any current team owner of any league agree to do this? Wouldn’t they risk getting booted out the top league by voting for this? Yes. It is always about money.

Imagining MLS were not a single entity, take a look at the Seattle Sounders. The Sounders are the most marketable team in MLS with a large fan base. Currently, their estimated value is about 175 Million. Not too shabby but pale in comparison with the value of an NFL team, NBA team or MLB team. Forbes lists the cheapest NBA franchise (Bucks) at 405 Million. With the league constructed as is, the Sounders and every other team in MLS will always be worth fractions of the worst teams in other sports.

Worth more than twice the Sounders

Worth more than twice the Sounders

This will not change until professional soccer finds a way to grow the sport, market base and TV revenue. In doing so, they must compete directly against long established and successful American sports leagues. Promotion and relegation gives professional soccer a unique competitive advantage which mirrors and re-enforces long-standing American ideals of capitalism and merit-based advancement. An advantage which rewards bold and innovative coaching styles, successful talent scouting techniques and works to evolve and grow the sport organically over time.

Want to win the battle of the American sports marketplace? Promotion and relegation is low-hanging fruit which can pave the path to prosperity. The NFL is king today and for the foreseeable future but there is a way to steal their crown.

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