Tuesday, January 25, 2011

Are Professional Players Entrepreneurs Or Employees?

Demba Ba's refusal to play for Hoffenheim and demand a transfer to England or Jefferson Farfan's late arrival from winter break in Schalke and reputed demand to leave the club or Darren Bent's push to sign with Aston Villa all have the whiff of spoiled players behaving badly and selfishly (the list could easily include a good number of other players). Are these players just soccer's divas, or is there something more systematic going on? That is, are players behaving ever more like spoiled children or like rational, profit-maximizing capitalists?

There has been a lot of talk these last few weeks, especially during this transfer window, about the changed and changing relationship between players and clubs. This is not entirely new and goes all the way back to the beginnings of professional sports. But it gets a whole lot more attention when you see egregious examples of selfishness (or self-interest, some might say). And many, like Schalke's coach Felix Magath, think that clubs are currently getting the short end of the stick. He said so very explicitly in a recent opinion piece in the Hamburg newspaper Abendblatt. Paraphrasing Magath slightly (while trying not to put words in his mouth), players have gone from being employees to being subcontractors (or perhaps entrepreneurs).

Magath is on to something. Ever since the Bosman ruling in 1995, which provided the opportunity for a freer movement of players across leagues and countries, we have seen several interesting trends that bear on the relationship between players and clubs: one, more movement across clubs, period; two, more movement across countries; and three, an arms race among the best clubs for the best players.

More movement of players across clubs and leagues suggests that the market for soccer players has become more efficient (though we can debate that, too). But it's the latter part about what this movement means for clubs and ultimately the industry of soccer that appears to worry Magath.

Here's what Magath actually said (translated from German):
"Practically, this has had the consequence that clubs try to tie players contractually for as long as possible. The professionals (players) are therefore in the comfortable situation of having their incomes guaranteed for a longer period of time. Yet, the clubs cannot be certain that they will receive the commensurate performance during that same period of time."

Magath's complaint rings true in the sense that modern players behave more like small companies; they have agents, handlers, and can be involved a myriad of commercial activities not directly related to playing soccer. Players are expected to seek maximum compensation under the most favorable terms, and it is the rare player who signs for less money with a club simply because they feel a sense of obligation to a club or Mannschaftsgeist (esprit de corps, loosely speaking).

This has had consequences for how the how clubs behave, too. In essence, it has lead to an arms race among the richest clubs, with the best clubs with the deepest pockets vying for the signature of the next star who will make the difference between playing in the Champions League or avoiding relegation (does anyone think that Darren Bent is really worth 24 million pounds?). But we know that arms races are terribly inefficient and hold the real risk of Mutually Assured Destruction (MAD): both sides would be better off cooperating and keeping prices for players to a manageable level to ensure their own longevity; but demands of winning right now triumph and trust is low that other clubs will help enforce mutually beneficial behavior (not overpaying for mediocre players). This is not all that dissimilar from a corporation focused on quarterly earnings for itself over its own longevity or the future of the industry as a whole.

Another consequence is that clubs also have been unwilling to punish players who do not fulfill their obligation, and this is Magath's second point. Clubs have been reluctant to sanction bad behavior. He demands that clubs be allowed to treat players like contractors, with the effect that non-performance and sanctions for non-performance be clearly spelled out in the contract. So, a player like Demba Ba or Jefferson Farfan who refuse to comply with the terms of their contract should be punishable by clubs or leagues or UEFA. Magath envisions that players be treated like a construction company you would hire to fix your roof: "rights and obligations of both sides should be written down - as well as compensation for damages. Support from the national and international associations would be desirable, too. Suspensions for international competitions like the Champions League, temporary suspension from national teams, or a suspension of the ability to transfer to another club would be effective instruments to rejigger the balance of power between players and clubs."

Magath's opinions matter - he is a famous and successful coach. So what does this tell players? If they didn't know already, he let them know that they have the leverage to blackmail clubs. But perhaps he's also trying to signal to other clubs that he is willing to cooperate with them against players. But this is a risky strategy: punishing players for bad performance does not guarantee that the team will start winning. Remember Bremen's manager Klaus Allofs and his refusal to negotiate contract extensions until things got better? Guess what?! Things haven't improved, and Bremen finds itself in a real relegation struggle. Unless clubs are willing to collude or until UEFA's financial fair play rules come into effect and show some real teeth, we are only likely to see more Demba Ba's try to maximize their earnings before their career is over and they run out of time.