Thursday, August 15, 2013

Some additional thoughts on Ryan Braun, steroids and punishment

So with Ryan Braun now serving his 65-game suspension for violating Major League Baseball's joint drug agreement, it's time to move on. Braun copped to the crime, is doing his time, and he'll lose $3.25 million of his salary this year. Moreover, baseball's tough prosecution of Braun, Alex Rodriguez and other chemically enhanced players will eliminate the incentive for other current and future players to use steroids and other banned substances.

Justice is served, right?

Count me among the unconvinced. As many have written, Braun is merely missing the end of a terrible season in which he's been hurt anyway. He can use the extended break to get healthy and come back in 2014.

More importantly, however is the impact of that $3.25 million in lost salary. That's a lifetime of wages for many. For Braun, it amounts to 2.2 percent of the $145.5 million dollars in past and future earnings from 2008-2020. Certainly, Major League Baseball probably punished the Brewer slugger about as extensively as possible. But if use of performance enhancing drugs can help secure a contract worth tens or even hundreds of millions of dollars, the possibility of a $3 million fine isn't really much of a deterrent. recently noted the temptation to cheat as illustrated by former Brewer prospect Nelson Cruz--who was also suspended in the Biogenesis scandal:
At 26 years old, Cruz's major league career might have reached its conclusion. If someone had approached him with a potential miracle drug to try, he really wouldn't have had much to lose. Cruz made it back to the big leagues with the Rangers in August of 2008....He was an All Star in 2009, hitting 33 home runs after never producing more than nine in any previous season. He has...142 home runs, has played in two All Star Games and been a member of three playoff teams. He's also been paid about $20 million over that time.
It's clear that astronomical salaries offer a great temptation to cheat. And since that's true, we ought to consider why and how salaries of professional athletes have gotten so high--and why they continue to rise.

Certainly, player salary is driven by the market. There are a very limited number of human beings in existence that can hit 35 home runs in a year. With an incredibly limited supply of elite baseball players, the demand is high. Therefore player salaries rise. The teams that don't pony up lose baseball games, then fans and finally money.

Thus, there is a great market-driven pressure to maximize the revenue needed to win games, fans and more money. One way that teams do this is through their stadiums. Sure big, fancy stadiums draw fans, but usually only for a year. A ton of money also comes from secondary marketing opportunities. Restaurants. Shopping centers. Banquet facilities. Sports stadiums are a year-round enterprise. You need look no further than the way the Packers are gobbling up land around Lambeau Field to extend their empire.

The market alone, however, can't completely account for the dramatic increase in player salaries (and the temptations players face when seeking to be rewarded with nine-figure pay days). That's because so many stadiums are heavily subsidized by tax dollars. Nearly three quarters of Miller Park's $400 ($519 million in 2013 dollars) million price tag  was financed by the taxpayers of Southeastern Wisconsin.

Imagine if the government injected a few hundred million dollars of capital into the company you work for. You and your colleagues would probably be hoping for a slice of the pie, and it would certainly change office dynamics.

In the case of Major League Baseball, public financing of stadiums has helped fuel a culture that--intentionally or not--lucratively rewards dangerous drug use. And tragically, the impact of this culture trickles all the way down to teenagers playing amateur sports.

They next time elected officials look to target steroid use in sports, they might begin by refusing to subsidize it.

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