Re: Stay away from Boras
posted at 11/8/2013 11:24 AM EST
In response to S5's comment:
In response to greatplayer's comment:
The reason you choose to spend $500 to take your son to a single Red Sox game is because of the costs of the labor. They are playing a child's game, so you might want to think twice before spending that kind of money to watch a baseball game.
AGAIN...READ MY ORIGINAL POST IN THIS THREAD. DO YOU THINK THAT THE
An equal argument can be made that the Sox are charging what the market will bear for their product. As long as management is making a profit that price would be the same regardless of their production costs. The difference is that rather than all the profits going into the owner's pockets, the players are getting a bigger piece of the pie.
This ain't all that complicated so pay attention:
The reason we spend $500 to take our son to a Red Sox game is because we choose to do it.
Exactly. This is capitalism. Tickets prices have nothing to do with player costs. In any business, owners charge what the market will bear. Yes, as costs go up, owners will raise prices to cover the costs but only to the point that they maximize revenue. If raising prices reduces revenue because of less sales, then prices will go down. And eventually labor costs will to when it reaches an extreme situation.
The owners pay high labor costs because they have the revenue to pay those costs and still make a profit.
One thing to add, however. Players like to talk about getting market value, but in the market is distorted.
Every business will have there own salary cap for salaries. It's based on getting the job done and maximizing profits. There's a point where no matter how talented an employee might be, if you pay him more, it's simply going to cut into the profit.
A business might go over the cap for a talented employee but only to the point where you think that employee's skill might increase revenue.
In baseball, however, you have two different forces. If owners paid players like a true business -- to maximize profits -- it would depress salaries. Owners would pay to put a team on the field that is competitive and entertaining so fans will want to watch. But once a team is at that point, adding that expensive player or two that could put a team in the World Series would simply cut into the profit. So in a real business model, that wouldn't happen.
But in baseball (and sports) there is a desire to win. So an owner might go over budget, cut into his profits, in an effort to win. If a decison to play labor isn't based on maximizing profits, that's not a true market for a player in a true business model -- especially in the long term.
In the short term, business do make decisions on occasion based on other factors -- prestige, which could help long-term profits, lower profits in the short term to increase market share, which will increase profit in the long term. But that's different from an everyday approach that sports require.