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Major League Baseball could learn from Australia

By Justin Wolfers and Andrew Leigh - posted Sunday, 15 September 2002

With the threatened US baseball strike averted in the bottom of the ninth, fans are relieved but somewhat disillusioned with the national pastime. Is the fierce competition that we enjoy in the ballpark likely to always spill over to negotiations over pay? Or is it simply a reflection of players paying more attention to dollars than sense?

A major sports scandal in Australia last week provides an interesting benchmark against which to judge the motivations of American baseball players.

Rugby league fans Down Under also had a gut-wrenching week, following revelations that the Sydney-based Bulldogs, a team picked by many to win this year's rugby league championship, had systematically violated the salary cap. The team had funnelled player payments through third-party entities and club boosters. It emerged that the club spent nearly a fifth more on player payments than the system allows.


The players appear to know nothing about these violations, and there is no suggestion of impropriety beyond the team's management. Yet "Doggiegate," as the Australians are calling it, has resulted in the Bulldogs' being stripped of any credit for their successful season to date, and they have been relegated to the bottom of the league.

With the finals series only two weeks away, this has also robbed the Bulldogs of any chance of postseason glory.

The reaction of Australia's rugby league players stands in stark contrast to the position adopted by Major League Baseball players. Bulldogs players, led by their captain, Steve Price, pleaded to take a pay cut to comply with the salary cap, in the hope that it offers them a chance to compete in the postseason.

"It's a shock to us like it is to everybody else," Price said on Aug. 21, claiming ignorance of the player-pay scandal. "Players will take pay cuts if we have to."

The 21-year-old Mark O'Meley agreed. "I just love footy," he said. "I'd be devastated not to play in the finals." He added, "I'd be prepared to take a pay cut to play in the finals."

By contrast, the threatened baseball strike was intended by the players union to maximize only their bargaining power. By waiting until the pennant races and ultimately the World Series were on the line, the players managed to boost their bargaining power at the possible expense of the postseason.


In effect, baseball's stars bet that their fans, who ultimately provide the owners with their profits, care more about the postseason than they do. Having forced the abandonment of the 1994 World Series, we all knew this was no empty threat. And the fact that the owners worked furiously to resolve this dispute by Friday shows that they also understood this.

The response from sports fans in Australia and the United States reveals the very different effects that the two scandals — player overpayments and the threatened strike — have had on supporters of the two sports.

Bulldogs fans are clearly shocked at the way in which the team's management behaved, but it says something about the innate sense of fair play among Australians that an online poll at the club's Web site found that nearly half of Bulldogs fans surveyed believed that the punishment meted out to the club was fair.

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This article first appeared in The New York Times on September 1, 2002.

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About the Authors

Dr Justin Wolfers is an Assistant Professor of Economics at Business and Public Policy Department of the Wharton School, University of Pennsylvania.

Andrew Leigh is the member for Fraser (ACT). Prior to his election in 2010, he was a professor in the Research School of Economics at the Australian National University, and has previously worked as associate to Justice Michael Kirby of the High Court of Australia, a lawyer for Clifford Chance (London), and a researcher for the Progressive Policy Institute (Washington DC). He holds a PhD from Harvard University and has published three books and over 50 journal articles. His books include Disconnected (2010), Battlers and Billionaires (2013) and The Economics of Just About Everything (2014).

Other articles by these Authors

All articles by Justin Wolfers
All articles by Andrew Leigh
Related Links
Andrew Leigh's home page
Justin Wolfers's home page
Stanford Business School
Sydney Bulldogs
The Official Site of Major League Baseball
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