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Major League Baseball could learn from Australia

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


By contrast, baseball's work stoppages seem to have wearied American baseball fans, and although there was a small anti-stoppage protest movement, fans seem resigned to the possibility of further labour strife, and regarded its resolution as an unexpected surprise.

While the overpayment scandal led the Bulldogs board to resign en masse, both Bud Selig and Donald Fehr, the two main protagonists from the 1994 baseball strike, continue to lead their respective organizations.

The current Australian scandal also raises some very practical issues for baseball's negotiators.

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A primary stumbling block in the baseball negotiations has been the issue of the so-called luxury tax.

This tax is in many respects similar to the rugby league salary cap, except that rather than simply banning spending above a certain level, these higher payments are to be taxed so that rich clubs can buy less talent for their dollar.

The overpayment scandal in Australia points to the likelihood of similar infractions in baseball's future. The tough question for those who propose to regulate payments to baseball players is: How would a luxury tax in baseball be enforced? Will Bud Selig be willing to go as far as Australian rugby league officials and ban transgressors from the postseason? Would the players union support his decision, or could enforcing the rules potentially lead to more labour strife?

Even in its darkest hour, Australian rugby league players are showing the sort of sporting passion that American baseball fans yearn for. As Bulldogs Coach Steve Folkes said of his team: "They want to play football. It's not about money. It's about success."

For all its "Field of Dreams" mythology, the mighty dollar remains central too much of modern baseball.

Few have echoed the recent sentiment of one sportsman: "The money, I can deal without. Baseball, I can't." The player? Baseball's $252 million dollar man, Alex Rodriguez.

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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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