How Should money earned from Sports be divided between Players and Owners?
Since time immemorial sports has played a vital role in the lives of people. After the dawn of the 20th century, sports developed into a multibillion-dollar sector that attracts ‘big-monied’ interests. Currently, money is a fundamental part of the industry with three primary sources: fan-based revenue, sale of merchandise, and advertisement. The most significant source of income is fan-based revenue. It is currently driving the industry and will continue to do so for centuries to come. After all the money has been pooled, the question of how it is divided amongst invested interest becomes subject to opinions and perspectives. The aim here is to find the best way to share this vast pool of money between owners and players.
Despite the differences in the division of money, almost all sports have reported cases of player exploitation. For example, the Reserve Clause was abolished in baseball to eliminate the indefinite control owners had over players’ services hence increasing their salaries (Kelsh, 2017; 7). However, the rising player salaries exponentially increased the cost of operation. Therefore, failure to correctly divide revenue between owners and players often leads to financial distress. The best way to divide the money is to allocate income the same way as Fortune 500 organizations. The sports organization should first make a budget. The budget serves to allocate funds for operational expenditure and create a compensation package for owners and players to share at a given proportion. The operational expenditure would take care of administrative and advertisement costs, together with other business ventures to avoid financial distress. The owners and players would each receive half of the total compensation package. The equal sharing of the package will help prevent instances of player exploitation.
The proposed division process not only avoids player exploitation but also leaves room for further development of any sports organization. It satisfies all the parties involved. The owners will get a substantial return on their investment while players will get fair compensation for their services. Generally, a sports organization that employs this division proposal is sure to avoid financial distress.
Work Cited
Kelsh, E. C. (2017). Money Ball, Money Pit, or Money Misallocation? (Doctoral dissertation, Carthage College).
Link: https://www.researchgate.net/profile/Elena_Kelsh/publication/331792313_Moneyball_Money_Pit_or_Money_Misallocation/links/5c8c39fe45851564fae0de5b/Moneyball-Money-Pit-or-Money-Misallocation.pdf