By this process underlayed the division within the

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by this process underlayed the division within the NBA Players Association this past year and will likely be seen by other leagues in the future. A second related example is in the collegiate ranks where a cartel, the NCAA, has set the rules for student athletes who have no control whatsoever over the process. The cartel then negotiates with 17-year-olds, who are prohibited from signing with an agent. Collegiate players will continue to be exploited until this current system is dramatically changed. Third, even among teams in the league, there are divisions. Consider the NFL, a league generally without some of the economic difficulties confronting other leagues. Even there, we see major distribution implications. When the Rams moved to St. Louis, their revenues increased by about $30 million. The salary cap implies that about 60% of that, or $18 million, goes to the players. Salaries increased by about $600,000 per team. The bottom line was that the Rams ended up gaining about $29.4 million. The players in sum ended up gaining about $18 million and each other team ended up losing $600,000 as a result of that change. Fourth, it’s similar with colleges. Let me pick on my school, Notre Dame. When Notre Dame pulled out of the TV contract and signed a separate arrangement with NBC, Notre Dame’s revenues increased by $35 64 21 21 million. The rest of the alliance revenues dropped by $35 million. Is that good or is that bad? Well, there isn’t a simple answer to that. In any event, my conclusion here simply is that the distributional consideration, how little is too little, will likely be the next major conflict in the economics of sports. While prior conflicts have been over how to split a growing pie, future conflicts will
focus more on the distribution of a stable pie, making the conflicts much more intractable. RICH McKAY: I will be extremely brief. I went to Princeton; I did not go to Yale. Therefore, I’m a market capitalist as opposed to one that would see distribution in another way. I really struggle with the concept of how much is too much. I believe that sports in its purest form is entertainment. I struggle not with the fact that Jim Carey makes $20 million per movie or Demi Moore makes $15 million per movie or Tom Cruise makes $22 million per movie, but with the fact that Barry Sanders makes pretty much $300,000 per episode. But that’s because I’d just rather see Barry Sanders. To me, the number one thing that drives this question and gets it off track is that way too much attention is paid to those that make it big and those that make big money. Not enough attention is paid to those that do not make it, to those that take the risk and fail. All you need to do is drive down Sunset Boulevard in Hollywood, go to any bistro you like, and you will see actors upon actors upon actors who are making $4.95 an hour.

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