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Sunday, August 16, 2009

A $15 Million Dollar Bargain

A candidate for the "perfect sentence"?

"On 14, Woods intentionally bladed a sand wedge, hitting the ball on its equator and rolling it from the collar of the fringe into the hole from 15 feet to move eight under." ("As Charges Are Mounted, Woods is Steady")

Yeah, we have no idea, either. But it certainly sounds impressive, and isn't that worth something? Makes it kind of poetic. Like anyone knows what Pound meant by "The apparition of faces in the crowd / Petals on a wet black bough." Or what Gertrude Stein was going on about with "A rose is a rose is a rose." In particular, we wonder if "equator" is a term of art for a part of the golf ball (presumably somewhere in the middle) or if the reporter was being metaphorical. If the former, fine; if the latter, we're not sure it was worth it.

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Speaking of Tiger Woods, we feel we should explain what we meant yesterday when we alluded to the fact that we don't think athletes are "overpaid."

Consider Eli Manning. As mentioned yesterday, he just signed a contract extension with the New York Giants worth somewhere north of $15 million a year. Why so much? He plays quarterback--the most important offensive position on a football team--he has proven himself a winner, and, in contrast with the Michael Vicks of the world, he is a solid citizen and good team figurehead. Still, you may reasonably argue, his job consists of throwing a football; how does he deserve $15 million a year?

Well, short answer: He doesn't. Nobody does. If you want to get Marxist about it--or even Peter Singer-esque--for anyone to receive that much more income than is necessary for one's basic needs is downright unethical (if not morally reprehensible).

Without going to those extremes, though, most people--most Americans and sports fans, anyway--might adopt the middle-class capitalist argument: "We understand that elite athletes have skills that other people don't, and that organizations are willing to pay large sums of money to secure the services of those athletes. What Eli Manning does may not be vital to the functioning of society, but he does do it better than 99.9% of the population and should be compensated accordingly. For the very reason, though, that his skills are not vital to the functioning of society, there should be some reasonable upper limit to the compensation he and players like him receive." The reasoning, if we may put words in people's mouths, goes something like this, "If a fireman, who actually saves lives, doesn't make anywhere near $15 million a year, then a football player certainly shouldn't."

Now, we would argue that firefighters (along with police, teachers, public defenders, ambulance drivers, doctors, nurses--feel free to add your own favorites to the list) should probably be paid more than they are now. But the whole "value to society" argument is actually an argument in favor of paying athletes and other entertainers lots and lots of money. Bear with us.

How much are the services of a firefighter worth? Well, if your house is on fire, and your children are trapped inside, a firefighters' services are priceless. If you had to pay them before they would run into your house, you would empty your bank account, max out your credit cards, sign promissory notes and be happy to do so. But someone who lives across town from you wouldn't value those services as highly. In fact, if we consider that many people will never need the services of their local fire department, we can see that the actual value to each potential user is low, and, by extension, so is the amount of money they might be willing to spend to secure firefighters' services. Maybe ten dollars a year per resident? In a large city, that could translate to $10 million a year--for the fire department as a whole--which then needs to be distributed between costs like salaries and equipment. In a smaller town, the budget would be even smaller.

(Digression: Of course, there are positive externalities associated with fire protection, which is why they are funded out of public budgets. Right now, though, we're just speaking about the actual immediate value to the users of the service--the price they might pay if they had to fund the services directly. EOD)

So what about athletes? Well, again, the actual immediate value of any individual athlete to most people is low. But not as low as we think. As a Giants fan, the Solipsist is happy to have Eli Manning on the team. If he were asked to pay Manning or the Giants directly, though, he wouldn't fork over a large chunk of his cash. But if you asked him, "Is having Eli Manning on your team worth, say, ten dollars a year?" Sure. Do the Giants have more than a million fans? Undoubtedly. So, if each of those fans thinks having Eli Manning on the team is worth an extra ten dollars a year (which they spend in the form of tickets and merchandise and cable fees and so on), then the Giants have made a sound business decision, and who are we to begrudge the "spoiled" athletes for claiming the monetary rewards that they have, in fact, earned?

We also just want to put this out there: The Solipsist is probably about 1/1000 as good a football player as Eli Manning. So, y'know, if the Giants want to save a little money, we're willing to helm the offense for a mere $15,000 a year. (Just please use some of the savings to invest in a very very very very very good offensive line!)

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