Misc links

January 15, 2010 at 4:34 am 3 comments

  • Rufus Pollock uses the occasion of Argentinian copyright extension to take extremely long copyright terms to the woodshed. He shows that once you consider the decay in demand for cultural products (most of which are essentially ephemera) and net present value discounting, the marginal incentive effects of further extending already long copyright terms are absolutely infinitesimal. The most plausible alternative explanation is that extremely long copyright terms represents public choice more than public policy. Although he doesn’t say so, I think one obvious way to demonstrate this is that the extension is retroactive. Even if another twenty years is basically worthless in prospect to a new market entrant, it’s worth a lot to those incumbents who own those few works that have proven to be of lasting appeal. Also worth noting is that Pollock posts his code.
  • In oral arguments at the SCOTUS, a lawyer used the word “orthogonal.” Roberts and Scalia were fascinated by the word and seemed to want to make it the secret word of the day. I myself am fond of the word as it’s a pretty clear way to get across concepts like “lack of interaction effects,” which is a more subtle concept than merely “uncorrelated.” For instance, see my discussion of weighting and when it’s ok to omit controls.
  • In another SCOTUS case, the NFL gave exclusive merchandise rights for every team in the league to Reebok. A small hat company is suing the NFL on antitrust grounds and so the court has to decide if the the teams are independent firms and the NFL is a trade group (the plaintiff’s theory) or the NFL is a firm and the teams are franchisees (the NFL’s theory). Given how expansion teams and things like that work, it seems the latter. There’s a related question about whether a “Rams” hat is in competition with a “Saints” hat (the plaintiff’s theory) or with a “Cardinals” hat (the NFL’s theory). Given that the price of NFL merchandise rose by 50% after the exclusive concession deal, it seems like the former is the obvious answer. Even though I’ve never watched a football game in my life, I still find this really interesting as it involves a lot of fairly subtle question about monopolistic competition, substitution/categorization, strong externalities, etc.

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Soc of Mass Media, week 2 Age, Period, Flim Flam

3 Comments

  • 1. Noah  |  January 18, 2010 at 4:57 pm

    There’s a ton of money at stake in the NFL case, far beyond hats and other merch. The NFL won in district court and on appeal, yet its the NFL who wanted to go to the supreme court for a larger anti-trust exemption. Players’ rights to freely negotiate contracts with any team after their initial contracts end (free agency) has been predicated on anti-trust lawsuits. Before the lawsuits, player contracts could often be extended indefinitely without major raises, because players could not negotiate with other teams. If the NFL gets everything they want from the supreme court, they could be able to apply their theory of being one firm with many franchises to constrain the labor market and significantly cut costs, so more money goes to the owners’ pockets.

    Pro football (along with basketball and hockey) are unusual businesses where an estimated percentage of the gross revenue is allocated to employees through collective bargaining – usually between 52 and 57 percent. These mechanisms actually serve to decrease the amount of money that goes to players. Both football and basketball owners have threatened to cancel upcoming seasons (2011 in football, maybe basketball too) unless players will accept a smaller piece of the pie.

    In many ways, the NFL going to SCOTUS for a more blanket anti-trust exemption is an end run around having to negotiate salary concessions from its union, and/or a tool to use in said negotiations. If it was just about hats, the NFL would take its appeals court win and move on.

    • 2. gabrielrossman  |  January 18, 2010 at 7:44 pm

      very interesting. you can make a case for suppressing free agency if management/capital make a substantial human capital investment, but unlike the Hollywood studio system it seems like players come to the NFL already having fully developed their ability in HS and college.

  • 3. Noah  |  January 19, 2010 at 1:21 pm

    That went through a legal challenge as well. Football has the strictest age requirements before someone is eligible to join the league – 3 years after your HS class graduated. One or two players sued trying to get in early and lost, because the age restriction is in the collective bargaining agreement between owners and players.

    It’s also interesting that pro football is the only sport where new players can instantly be among the highest paid players in the league, because it has relatively low human capital investment after the pro contract is signed. Basketball and hockey have formal restrictions on the salary a team can offer for the first 4-5 years. Baseball has no formal rules on salary, but does have the most formal system of acquiring players and spending years training them before they play major league baseball. Until they make it to the show, they often get paid relatively little and do not get any union protections.


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