Malcolm Gladwell has an excellent piece over on grantland asking if sports team owners are entitled to make money on their teams. In response, SBNation published this great piece showing how gladwell may have selectively ignored some examples in order to support his point.
People who know me would agree that I’m a complete free markets guy. I’m not a fan at all of unions or regulations, and I believe business owners are more than entitled to earning a fair profit on their business / capital. That said, I’m completely on Malcolm Gladwell’s side on this one (though I agree with the second article that Gladwell oversimplified for some of his points). Sports teams are not businesses. Sports teams are trophy assets. They’re a tribute to their owner’s vanity. Peacocks have bright feathers to attract attention; rich men have sports cars and sports teams.
Outside of the “psychic” benefits, their are plenty of fringe benefits to owners having these teams. They’re a powerful networking tool, and give the owners tons of exposure. Rich men thrive on their network and deal flow…. and owning a team greatly enhances both.
Now, I’m not saying owners should have to back teams that are burning through money faster than a teenager with their first credit card. But I am saying that, given all of the fringe benefits, owners should be quite content to break even monetarily on their team ownership.