QUESTION: 

      What do professional team owners know    about Free Market economy that most of us don't know?

ANSWER:

That unregulated competition doesn't work.

WHY?  Read on....

First, a little background: Free Market economy is based on the notion of supply and demand.  Businesses compete with each other for the demand.  The consumer benefits from this competition.

In other words, Free Market economy fosters competition, from which we all benefit.  Businesses that can't successfully compete fail, and supply and demand keeps costs to consumers down (demand goes down when costs go up).

When competition itself is the "product" for sale: You see in professional sports, it is the competition that sports fans come to see.  Ain't much competition between teams, ain't much demand to see the games.  And that's what professional team owners know.

In other words, professional team owners know that if you don't regulate the market, it becomes winner-take-all, and when that happens, the competition goes away.  The same teams keep winning over and over.  Who wants to see a sporting event where the winner is pretty well known in advance?

How did they fix it?  Well, one way was to eliminate competition in recruiting new team members.  Winning teams have the best players.  You have to make sure they don't all get on one team.  Sure, some teams can get quite a few good players, and maybe the win more than they lose, but you have to make sure that the sports fan believes that, in any given sporting event, both teams have a least some chance of winning.

So they set up a system whereby losing teams get first choice in the coming crop of new players.  They called it the "draft."  Now, players haven't much liked that, so they've found ways to eventually make it a free market to some degree in terms of supply and demand for their talent.  But still, owners recognize that unregulated competition leads to winner-take-all..

Never heard of winner-take-all economy?  Well, there's lots of folks who hope you haven't.  It's the reason the rich are getting richer, the rest of us are staying the same, and the middle class is disappearing.  The top 1 percent of American society now controls more than half of the country's stocks and securities.   Since 1978—the richest 1% gaining 256% after inflation while the income of the lower earning 80% grew only 20%. The top 1% has gone from earning around 8 percent of the national income to 18 percent (but they aren't any more skilled than the workers below them).

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