OJ Mayo and the law of Demand
Sigh. People really need to do some Econ 101.
So, lately there has been a lot of stink that apparently OJ Mayo took money in the form of bribes from sports agents for the priviledge of representing him in the NBA draft. Many people are aghast. And my reaction is:
Are you people completely daft?
Seriously, I'm not sure where you guys grew up, but in the world *I* live in, when you have a talent/skill/product that other people want really badly, then you charge money for it. Economics 101, baby. There's literally nothing immoral about this. I'm reminded very much of George Lucas' distribution deals when he made Star Wars: Episode 1. Standard industry practice is for film distributors to take a percentage of the film's ticket sales in return for distributing the film. This is a deal that most directors and distributors take because they don't always know how successful there film will be, so they worry about overpaying if they pay a flat fee for distribution.
But George, however, knew quite well that the first Star Wars movie in 20 years was a guaranteed hit that would basically sell a trillion movie tickets. He told the distributors, "You can take $1 million or you can fuck off. That's the deal."
OJ Mayo is saying "I know you usually get sweet royalties from guys who are hoping they crack the lottery. But I know what I'm worth. So give me $500k or fuck off. That's the deal."
Economics ONE OH ONE, baby.
Why shouldn't athletes be allowed to charge whatever they want for the privilege of representing them? Because Sports Agents don't want them to? WHAT? I don't want to pay for my coffee at Starbucks either. I think it's an outrage that they charge money for it. Welcome to the real world. I found it very amusing that David Falk is quoted as saying:
He could go the other way and say "Well, I'm not willing to pay the usual X% agent fees, I will only pay .5X %." And you know what? Agents will line up to take the contract anyway. As much as David Falk doesn't want to compete on price (what member or an oligopoly does!?), you can't break the laws of supply and demand.
So, lately there has been a lot of stink that apparently OJ Mayo took money in the form of bribes from sports agents for the priviledge of representing him in the NBA draft. Many people are aghast. And my reaction is:
Are you people completely daft?
Seriously, I'm not sure where you guys grew up, but in the world *I* live in, when you have a talent/skill/product that other people want really badly, then you charge money for it. Economics 101, baby. There's literally nothing immoral about this. I'm reminded very much of George Lucas' distribution deals when he made Star Wars: Episode 1. Standard industry practice is for film distributors to take a percentage of the film's ticket sales in return for distributing the film. This is a deal that most directors and distributors take because they don't always know how successful there film will be, so they worry about overpaying if they pay a flat fee for distribution.
But George, however, knew quite well that the first Star Wars movie in 20 years was a guaranteed hit that would basically sell a trillion movie tickets. He told the distributors, "You can take $1 million or you can fuck off. That's the deal."
OJ Mayo is saying "I know you usually get sweet royalties from guys who are hoping they crack the lottery. But I know what I'm worth. So give me $500k or fuck off. That's the deal."
Economics ONE OH ONE, baby.
Why shouldn't athletes be allowed to charge whatever they want for the privilege of representing them? Because Sports Agents don't want them to? WHAT? I don't want to pay for my coffee at Starbucks either. I think it's an outrage that they charge money for it. Welcome to the real world. I found it very amusing that David Falk is quoted as saying:
It's not competition based on merit. It's competition based on improper inducements. I think it's an abomination.No, Dave, it's competition based on PRICE. You may think it's an abomination. Well, of course you do, just like American Airlines CEO Robert Crandall, who famously got caught trying to fix airline prices with his competitors.
He could go the other way and say "Well, I'm not willing to pay the usual X% agent fees, I will only pay .5X %." And you know what? Agents will line up to take the contract anyway. As much as David Falk doesn't want to compete on price (what member or an oligopoly does!?), you can't break the laws of supply and demand.
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