Wednesday, August 7, 2013

Northwoods Baseball League


Tired of college athletes generating revenue yet receiving no compensation?  If so, skip this post.  If not, here's a novel way that seems to take advantage of the NCAA's definition of amateurism (restricing compensation to college athletes) in the sport of baseball: the Northwoods Baseball League. 

Any true college baseball fan has heard about the Cape Cod League which started in 1885.  The league is a non-profit tax exempt 501 (c) (3) organization run by volunteers, operating 10 teams competing during the summer.  With over 250 alums in the major leagues, the Cape Cod League is a romantic venue offering elite amateur baseball players the ability to compete, prove themselves with wooden bats, and impress scouts.  The college baseball players are allowed to have expenses covered but, to be clear, receive no salaries and thus retain their "amateur" status by the NCAA.  The NCAA views the teams in this league as "club teams."  Any profits that are generated make their way to charity.

Enter the Northwoods Baseball League in the Upper Midwest co-founded by former Boston Red Sox star Dick Radatz Jr.  Same idea, bring college baseball players to the league during the summer, play in venues, attract crowds (over 950,000 fans a year) while only having to cover expenses because of the NCAA's restriction on compensation.  One difference, this league is very much for profit.  Thus, as the league generates significant revenue it skips the players and finds its way directly to the team owners.  Currently there are 16 teams and new franchises are going for $1 million each.

Can you imagine a for-profit basketball league where elite college players were brought together, played in front of huge crowds over the summer, and franchise owners made millions?  [I know, spare me the AAU comparison, at least it's a non-profit organization.]

Economics is a wonderful thing.  At its essence, there is demand for a product (baseball) which generates revenue.  Because of the NCAA's definition of amateurism, the labor producing the demand can't be paid.  This means more money for those running the league.  Wonder how many industries would love to have a system where employees couldn't be paid fair market value?  I know it's the summer, and it's been months since I taught Sports Law, but isn't that an ANTITRUST violation in the real world?

For more on this league, read this article in the Boston Globe by Stan Grossfeld.