Freakonomics Radio - 365. Not Just Another Labor Force

Episode Date: January 31, 2019

If you think talent and hard work give top athletes all the leverage to succeed, think again. As employees in the Sports-Industrial Complex, they’ve got a tight earnings window, a high injury rate, little choice in where they work — and a very early forced retirement. (Ep. 6 of “The Hidden Side of Sports” series.)

If you make it to the finals, you feel like a rock star. You feel like you own the world. I was in love with the game in part because of how violent it was. If you want something, you have to be aggressive. It was over in 17 seconds. I got a TKO victory, and I remember thinking, oh my God, I have to do this again. The fact of the matter is, superstars do win championships.

The Super Bowl is by far the biggest sports event in the United States. It draws the most viewers, the most attention, and of course, the most money. As we've been discussing in this Hidden Side of Sports series, the sports industrial complex has grown tremendously over the past few decades. It generates roughly $70 billion a year. But once you strip away the massive TV revenues, the increasingly sophisticated arenas and stadiums, all the merchandise. What most people care about is watching the players play. How much do we care about the players themselves?

That is a different question. Most of us profess to care about the livelihood and well-being of employees in various industries. Does this apply to athletes? Or is sports too unlike other industries to think of its employees as just another labor force? Let's find out. Let's find out what it's like to be on the labor side of the equation in a business that often seems, and never more than on Super Bowl Sunday, to be nothing but superstars and fat paychecks and game day glory. Yes, the National Football League generates billions of dollars, but the reality of the facts of our business are rather stark.

That's DeMorris Smith, the executive director of the NFL Players Association, the union that represents the athletes. Our players play for approximately three and a half years. On average, that is. Some careers are obviously longer. And every career, at some point, is derailed by pain. The injury rate is 100 percent. Owners tend to own teams for decades, if not generations. What the players have tried to do throughout history is just to make sure that they get

what they believe is their fair share. According to a lot of the athletes we've been speaking with in a variety of sports, a fair share is hard to come by. Many feel they don't have much control over their destinies, financial and otherwise. It's an interesting kind of irony in that sports is a place that we consider as close to a meritocracy as we have. And you look at the field and we convince ourselves that once you step out there, it's all fair and it feels that way.

That doesn't extend to the business of sports. This is true of the biggest sports, like football. You know, the owners are people who are used to getting their way. And the sports that draw smaller crowds. The athletes have no leverage. It's almost like the abuser-abusee relationship where the abusee gives excuses for being abused. That's exactly what's happening with regard to domestic volleyball here in the U.S. This can happen early in an athlete's career. Most people understand that college sports is professional sports. They generate a substantial amount of revenue, and that revenue goes to lots of people who are not the labor. It can happen to athletes at their peak.

The way these contracts are structured is these athletes aren't paid any money up front. The only way they earn money is by winning medals. And it extends into retirement, which for athletes is an inherently early retirement. I think about what I'm going to do after basketball on a daily basis. And there's a level of fear of the other side. So far in this series, we've looked at the history of the sports industry, how athletes do what they do, both physically and mentally. Last week, we talked to team and league executives about what keeps them up at night.

My 9, 7, and 5-year-old don't even turn on the TV. The ends of NBA games is one of my bugaboos. I just can't stand the fouls and timeouts, and it's just, you know, not a good viewing experience. Right now, one of the commissioner's main objectives is to spread the game globally. In today's episode, what it's like to be an employee in one of the most prominent and volatile industries in the world. Yeah, it's a pretty typical fighter story to be broke and trying to make it, you know. From Stitcher and Dubner Productions, this is Freakonomics Radio,

the podcast that explores the hidden side of everything. Here's your host, Stephen Dubner. The seeds of a sports career are typically planted quite early. I was eight when I was like, I decided I wanted to be a professional football player. That's Dominique Foxworth. He played in the NFL from 2005 to 2011. It's weird. Like, I was young enough then to be naive enough to think, obviously, I'm going to play in the NFL. I started getting invited to football camps. And that's when it started to become a business when I showed up and it was like, oh, they're like evaluating me.

Like this is where the dream either continues to go forward or dies. The very first moment I played volleyball, I fell in love with it. That's the three-time Olympic gold medalist Kerry Walsh Jennings. You know, people talk about their aha moments and these pivotal times in their lives where you know things are different. I had that moment when I was 10 in the fifth grade. And I literally just fell in love with the dance of the game and the learning, you know, everything that had to do with volleyball. I loved it. I was a geek for it. I was a sophomore in high school and pro scouts started showing up to my games. And that is Mark Teixeira.

And that's when I was talking to my coaches and talking to my dad and talking to some of these scouts saying, wow, I could actually play professional baseball. How cool is that? Teixeira wound up playing 14 seasons in the major leagues. He was a three-time all-star, a World Series champion. But back in 1998, he was just a teenager with a lot of potential. I was the 12th rated prospect in the draft that year, my senior year. He could have played college baseball first or gone straight to the pros through Major League Baseball's amateur draft. The draft is how teams in the big American sports

pick their young players. Unlike other industries where an employee can choose the city where they want to live and the company they want to work for, in a sports draft, the employee can only work for the company that chooses them. Still, for a player like Teixeira, the future was bright. You know, for all intents and purposes, I should have been a top 15 pick, right?

The Red Sox that year had the ninth pick. The Red Sox actually had the 12th pick overall, not the ninth. Teixeira's recollection seems a bit off. Anyway. They called me up before the draft and said, hey, we want you to take this sign-in bonus. It was $1.5 million. We're going to take you to sign the bonus, agree to this pre-draft deal. We'll draft you and you'll get started. Well, you're not allowed to, at least in those days, you weren't allowed to pre-negotiate a deal when you're an amateur. And so I said,

okay, you know what? I'll roll the dice. If the Red Sox don't draft me, some other team will draft me and I'll be fine. Well, draft day comes, you know, was going to be the coolest day of my life, the most exciting day of my life. Not only was I not the ninth pick, I dropped to the ninth round. So that's like 270 spots or something, right? And who drafts me? Boston Red Sox? Boston Red Sox?

Boston Red Sox. Teixeira wound up going the college route and played baseball at Georgia Tech. Best three years of my life. You met your wife there, I understand. Met my wife there, had a blast, you know, just became a better baseball player. When Teixeira entered the draft this time, he was picked fifth overall by the Texas Rangers. So what had happened in that first draft? According to Teixeira, here's what the Red Sox did. They called every single team

in baseball and said, Teixeira's not signing, he's going to Georgia Tech, don't draft him. The Red Sox, we should say, have disputed Teixeira's account and claim they did nothing wrong. In any case, here's what Teixeira took away from that incident. This was the moment that I realized that baseball is a business. For Dominique Foxworth, the business side of sports became fully manifest during college at the University of Maryland. My freshman year in college, we won the ACC championship. We went to the Orange Bowl and lost. And then immediately after, my head coach got a $10 million extension.

And that was when I was like, oh, we aren't a team, we're business. And that was when the light went on for me. There is perhaps no more confounding labor market in sports than the one whose organizers insist on saying it is not a labor market. I'm talking about big-time American college sports run by the National Collegiate Athletic Association, or NCAA. College sports, especially basketball and football, have also grown massively over the past few decades. They generate about $13 billion a year, nearly as much as the NFL. But the labor is essentially free. Aside from room and board and some academic scholarships,

college athletes receive no compensation. So where is that $13 billion going? So it goes to supporting other sports. It goes to building bigger and better facilities. It goes to paying college presidents and coaches and funding the NCAA. Like it goes a lot of different places, but it doesn't go to the people who are the labor on the field. Plotfelter looked at compensation data for various personnel from 44 public universities that have big football programs. Over the past 30 years, he found that full professors got a salary increase of 43% adjusted for inflation. Not bad. College presidents got an 89% increase over that time. Even better.

How'd the football coaches do? Over those 30 years, football coaches' compensation increased more than 1,100 percent, from an average of around $300,000 to more than $3.6 million a year. Back in 1985, football coaches were earning slightly less on average than the college presidents. Now they earn about six times as much. Their athletes, meanwhile, are still playing for free. And if you want a career in the NBA or NFL, you pretty much have to play at least some college ball since both leagues have eligibility requirements that forbid athletes from going pro

straight out of high school. Dominique Foxworth again. If that was the end of the story and every player then went on to have NFL careers, it would be unfair, but whatever. You're not going to lose any sleep for those guys. But the vast majority of the guys, and I have several teammates who, because it is not considered work, they're not privy to workers' compensation.

They're not privy to extended health care. So one of my best friends in college, he had aspirations to play' compensation. They're not privy to extended health care. So one of my best friends in college, he had aspirations to play professional football. He had three knee surgeries while in college. A few years ago, his doctor told him that he was going to have to have both of his knees replaced by the time he was 50. And he didn't play professional sports. And there's nothing that any college football team or governing body is going to do for him in that case. And that to me is tragic that a lot of people benefited from that. So the old fashioned argument for why this was acceptable was that this is like what economists call a tournament model.

Right. Whenever you got a lot of people competing for the top of the pyramid, whether it's show business or sports or whatever, you know, the bottom of the pyramid, there's lots and lots and lots and lots of people there willing to do whatever it takes for practically no money. It's this kind of weird unpaid apprenticeship. Some people accept that as okay. Others don't. But what strikes me that's especially noteworthy about sports is the degree and magnitude of sacrifice, physical and otherwise, is larger, I would argue, than trying to become an actor, trying to become a writer and whatnot. So can you just talk about that component and what you think would be a better solution? I think bringing up the tournament model is interesting because I could understand how some people would look at that and say that it fits here and that's why this is fair. But I think as a country, we've decided that that wasn't fair a long time ago. There are plenty of jobs where that's true. Like just about every job was like the barista at Starbucks. Like there are plenty of people out there who are capable of being baristas and you could probably allow Starbucks laws to protect American people or American workers

from these type of like capitalistic urges run amok. And the thing that's frustrating to me is we've instituted rules in professional or excuse me, in college, I guess, don't excuse me, in professional sports that happen to take place on college campuses. We instituted rules that are to the advantages of the institutions, but we are not interested in instituting any rules that are things that we accept as just kind of facts and fair. Like you'll be hard pressed to find anyone in our society that's like, no, let's eliminate the minimum wage and allow this this tournament model to to run amok for for low wage workers. Right. Well, the other argument, though, in colleges, wait a minute, free education, four years of college. What's that worth? same education as the people around you because you have to travel on Thursdays and Fridays and you are not allowed to do certain majors because they conflict with your schedule. I wanted to be a computer science major and my academic advisor was like, that course load is going to make it

very difficult for you to make it to our practices, their labs and blah, blah, blah, blah. And three times a week during the winter session or the spring session, you have to go to 5 a.m. workouts. And that changes your academic experience. There are all these things that are mandatory because your scholarship is year to year and you don't have any power to negotiate with your coach and say things like, I want to take this, so I'm not going to be able to go there. Like, that's just not a thing that is available. So, the education that they're receiving is not the education that people think it is. The Duke economist Charles Klopfelter also looked at graduation rates from 58 universities that have big-time sports programs.

For the general population at these schools, the graduation rate was 72%. For football players, it was 56%. For basketball players, just 42%. This is yet another reason that makes some people question the very existence of the NCAA. Here is the assessment of the entrepreneur Mark Cuban, who owns the NBA's Dallas Mavericks. I think it's worthless. If you could blow it up entirely, what would you do?

Would you have football attached to college at all? I don't mind having it attached to college, but I would make it an independent entity so it would operate independently. Let them go get a job. Let them practice as much as they need to if I wanted to create a band I can pay them and they can stay in school they can practice together as much as they want you know that's the hypocrisy if you want to be a professional athlete you can't practice your craft as much as you would like there's limits to coaching and playing with your teammates. There's limits

on jobs you can take. There's so many different things that are bound in stone that it just doesn't make sense. For years, there's been talk about reforming the NCAA, but it hasn't changed much. The Commission on College Basketball, chaired by former Secretary of State Condoleezza Rice, is advocating some reforms that can be seen as pro-athlete. But she also said this, our focus has been to strengthen the collegiate model, not to move toward one that brings aspects of professionalism into the game. Which might make more sense if some aspects of college sports weren't already at the professional level, like coaching salaries and TV audiences and the expectations of the top tier athletes. So how likely is a substantial

change? Dominique Foxworth is not optimistic. Those guys who are on the doorsteps of having professional careers, it's not really in their best interest to stop this now. And the people who are benefiting most from it who are not on the field, there is really no benefit to the coaches because coaches' salaries are inflated because they have extra money because they are not sending it to the players. And the rest of the teams who are funded by money generated by football and basketball. There's no incentive there. There's just the athletes who don't have much power. Foxworth, as you've probably figured out by now, has thought through the entire athletic ecosystem more than most people. Besides playing in the NFL, he's been an executive at both the NFL and NBA players'

unions, and he also got an MBA from Harvard. So to understand the incentives he's been describing and the transition from college to pro, let's go back to Foxworth's own transition. You were drafted, I believe, 2005, third round, right? So what I'm looking at here, I have no idea if this is accurate, you were paid for that year, including a signing bonus, about $660,000, does that sound about right, for year one? Sure. Okay. And it was a three-year rookie contract, is that right?

Yeah, it was a three-year rookie contract with a that right? Yeah, it was a three-year rookie contract with a fourth-year option, I believe. Okay. So it looks like your first three years paid you a total of about one and a half million dollars. And then in your fourth year, then you did become a free agent, moved to Atlanta. Those first few years were in Denver. So they traded me. So I went through the first three years and then I was coming up on the contract year and I played pretty well in Denver. And I knew that I needed to play well in this year because if you don't, then the salary minimum goes up for guys after that point. one and you go on with the rest of your life. So during week one, we're getting ready for the first week of the season in Denver. They traded me to Atlanta. Atlanta was a terrible football team at that point. That was the first time when I considered going to business school. I skipped training camp. This team's going to be terrible. I'm not going to play.

And then I'll be out of the league. But you must have had a pretty good year because the next year you signed a contract with Baltimore that paid you in year one, $8 million. Year two, 9.2. And year three, 4.4. Does that sound about right? Yep. It was a four-year, 27, I think, in Baltimore. It was a four-year, $27.2 million contract. How much of that did you actually collect?

All of it. You did. How did you have it guaranteed, even though you didn't end up playing out the whole contract? Yeah, so I was on the team for three years, and then the fourth year, I had taken out an insurance policy, so I got the rest of it there. So I was fortunate that the knee injury happened after I signed that deal because it would have happened when I was in college or happened a year earlier. I would have been on an entirely different path. So despite an injury that prematurely ended his career, things worked out pretty well for Foxworth, meaning he got paid. By the time he was 30, he was set for life, financially at least. But consider how easily it might have been

different. Consider the case of Andre Ingram. Hey, Steve, how you doing, man? Ingram spent 10 seasons in the NBA's minor leagues. Today, it's called the G League after its sponsor, Gatorade. It used to be the D League for development. So I would, you know, tell people that, yeah, I played in the D League and been playing for years. They usually notice my gray hair and, you know, wonder if I'm a coach or whatnot. At some point, they always ask, oh, have you ever made it to the big times? And, you know, I had to tell them the same thing every time. Well, not yet. That finally changed last year.

Ingram, at 32 years of age, was promoted to the Los Angeles Lakers for the season's last two games. Here's what happened on the first shot he took in the NBA. Down it goes! Welcome to the NBA! Andre Ingram makes his first try. That is awesome! Ingram went Makes his first try. That is awesome. Ingram went on to score 19 points that night.

My brother and my niece had called and told me. They said, hey, you are blowing up on Twitter. You're blowing up on Instagram. You know, you're everywhere. Ingram made a great impression. But still, he was a 32-year-old rookie. Would the Lakers bring him back the following season? When we spoke with Ingram this past summer,

the Lakers had just made news by signing the much-coveted LeBron James to a four-year, $153 million deal. How would Ingram feel about sharing the court with the best player of his generation? Yeah, I mean, count me along with the 100% of players who would love to play with LeBron. So I mean, that's a no-brainer. You won't believe how many texts I got when he made the decision. So, you know, a lot of people were already assuming I was going to be back with the Lakers. And they were like, man, you get to play with LeBron. And in my head, I'm like, man, I hope so. Either that or he took your roster spot. That's the bad way of looking at it, right? Yeah. You know what? Some people text me that as well.

Unfortunately for Ingram, the Los Angeles Lakers did not bring him back. He's playing for the South Bay Lakers of the G League this year, his 11th season in the minors. And he's not doing so well. He's averaging less than eight points a game with a career low in three-point shooting, his specialty. Which means that for Andre Ingram, the end of his professional career is probably pretty close. You know, I don't sit around complaining about it, you know, thinking it's unfair. You know, I just would want for people in general who watch basketball to know the game, to just know that there are guys out there in the G League now and overseas and elsewhere who just know how to play the

game of basketball and can play it in the highest level, including the NBA. Coming up after the break, we get into the athlete's afterlife and what makes it so hard. Well, the life of an athlete from very early in their career is dominated and regimented by people other than themselves. And how some athletes try to gain leverage over ownership. You know, I'm the CEO

of my life. I do not want to give the reins to my life and my success to someone else's hands and I do not want to be kept small. That's coming up right after this. It's easy to see professional athletes as fortunate beyond belief, getting rich for playing the game they love, yada yada. But that, as we've been learning today, is a very simplistic view of a complicated economic ecosystem.

For one thing, it's easy to focus on the handful of athletes at the very tippy top of the pyramid, at the exclusion of the thousands of athletes below them. You don't make money unless you succeed at the Olympics. That's Shawn Johnson. She won one gold and three silver medals in gymnastics at the 2008 Olympics. How the majority of Olympic endorsements work is you sign an Olympic endorsement, such as a Coca-Cola, a McDonald's, a Nike, Adidas, Under Armour, before the Olympics even start. But the way these contracts are structured is these athletes aren't paid any money up front. The only way they earn money is by winning medals. So if you sign, you know, a deal with Nike that's, say, a million dollars, you go to the Olympics

and you don't win a medal, you don't earn any money. And when you're talking about thousands and thousands of athletes who have reached the pinnacle of their sport by just qualifying to the Olympics, the fact that they aren't getting compensated for their journey that's gotten them to that point, I think is pretty extreme. Extreme, perhaps, but also very similar to another population of amateur athletes, all the college football and basketball players who are very, very good, but not quite good enough to have a pro career. And if you are that good and lucky, then you're drafted by a pro team. Remember, they choose you. You don't choose them. And now you're looking at a rookie contract with predetermined wages for your first several years, if you last that long. If not, the team can cut you loose, which means your downside is unprotected at the same time that your upside is limited.

You're basically stuck at a way below market paycheck for your first three years at a minimum. That's Victor Matheson, an economist at College of the Holy Cross and president of the North American Association of Sports Economists. Is that made up for by the fact that you get to make these huge free agent contracts later? Yeah, but only if you last long enough to actually, you know, make it to free agency. Russell Wilson, the Seattle Seahawks quarterback, did make it that far. Actually, he did so well in his first three seasons that Seattle gave him a contract extension worth nearly $90 million before what would have been his final season under his rookie contract. But during those first three seasons, he averaged under a million dollars a year,

despite leading his team to two Super Bowls and winning one. And what if Wilson instead had played Major League Baseball, which he maybe could have. He was drafted by the Colorado Rockies and played some minor league ball. In baseball, Wilson would have had to put in six years of Major League service to become a free agent. Interestingly, the average career length in Major League Baseball is 5.6 years. Also interesting, rookie NFL contracts are for four years,

and the average NFL career length? The typical player plays about three seasons. This presents a paradox, a clash of incentives that gives the leagues and teams much more leverage than the athletes. As Victor Matheson sees it, this also helps explain why a player's strike would be very hard to organize. If I'm working for Verizon, you know, on the lines fixing telephone poles, I might be willing to sit out and lose my salary for an entire year

if I can get a 10% higher salary for the next 20 years I'm working for them. You know, those numbers kind of work out. But if you're a Major League Baseball player, if you're an NFL player, you can't afford to lose even one season because there's almost no increase in pay that could possibly justify you losing one season of your very, very short career. And so the owners have a huge advantage over them. They will not make that money back. Like, it's just physically impossible. Dominique Foxworth again.

He was on the NFL Players Union Executive Committee during its last collective bargaining negotiation in 2011. With the length of a player's career and how much money they could stand to make in a season, it's really not in their best interest, like mathematically, logically, if you go through the numbers, it's not in their best interest to actually withstand a lockout or to initiate a strike. And as a matter of fact, teams themselves have stopped striking completely. All of the last major interruptions in pro sports in the United States have not been strikes, although they look like it to the fan. Lockouts, right? They've been lockouts. Yeah, this is the owners actually going on strike and not paying the not paying the players rather than the players

refusing to work. That's what happened in the 2011 NFL negotiations. The NFL locked out the players for 132 days, although it was during the offseason, so it barely affected the run of play. The owners and the players' union finally agreed on a 10-year deal, which saw the players' share of revenue fall from essentially 50-50 to somewhere in the high 40s, although the players did gain some other concessions, like funding for retirement and fewer practices. The most recent NBA and NHL collective bargaining agreements have similarly resulted in a smaller share of revenue going to the athletes. That said, those are huge, rich leagues that generate

many millions of dollars for even average players. It can be a lot harder to make a living in some other pro sports. Yeah, it's a pretty typical fighter story to be broke and trying to make it, you know. Lauren Murphy started fighting in mixed martial arts matches in 2010. She's currently a top sit and dog sit for people at the gym. It's hard to come up in fighting because you spend all your time training, so you don't have a lot of time to work. You know, if you're trying to decide what sport to go into, man, stay away from UFC because they're making a lot of revenues, but not much of that is going into the athletes. In the big team sports, Matheson told us, roughly half of the revenues are designated for the players. Although, as we just noted, that share has been shrinking a bit. In the UFC, meanwhile, that share is much lower.

The amount going to the athletes there is about 10 or 15 percent of revenues. The chief operating officer of the UFC, Lawrence Epstein, disputes that figure. The 15% number, I don't think that's accurate. I mean, there certainly is some fluctuation in the percentage of revenues that goes to athletes. But the reason for that primarily is that we have a variable revenue stream model in our company. Meaning the UFC distributes some of its fights via pay-per-view, whereas the big team sports have bigger, more reliable TV contracts.

Still, salary data for UFC athletes is hard to come by since the company is privately held and the athletes are not unionized, which means there's no collective bargaining agreement. The UFC really has all the control. They can cut you on one loss. They can cut you after two losses. They can keep you around for as many fights as they want. They can renegotiate your contract. You know, there's just, they have a lot of power. That said, Lauren Murphy is not much of a critic of the UFC. Her career may not be all that lucrative, but it is a career. And maybe more important, it's given shape to her life. Sports, in Murphy's case, fighting, it can have that effect on people. And that's part of the draw. You know, I struggled with depression and I struggled with addiction. And I kind of just became your typical, like, high school dropout, teenage mom in a small town.

And it's just changed my life in ways that I never could have even dreamed of back then in a small town in Alaska. In just her third UFC fight, Murphy earned a $50,000 bonus for taking part in the Fight of the Night, a fairly subjective award bestowed by UFC management to the two fighters who delivered the most impressive performance on a given night's card.

That bonus changed my life. You know, I paid off a bunch of student loans with that, and I got out of debt. And it was really a life-changing experience for me. Murphy's bonus was a great stroke of fortune. As for her guaranteed pay in the UFC, that's a different story. Fighters get paid for two things, making weight and winning. The figures vary, but the most Murphy's ever gotten was $12,000 for making weight and $12,000 for a win, which obviously is also not guaranteed.

What is guaranteed is that Murphy will train five to six hours a day for months and that UFC fighters get on average just 2.3 matches per year. I've only made about $15,000 in the UFC so far this year. But, you know, my dream was to see how far I could take this and for me at least you know if I wanted to be in a profession to make a shitload of money I would have been a lawyer or something you know a doctor or something like that I mean yes I'd like to make more like I think anybody on earth wants to make more you know if you ask them do you want to make more money everybody's going to be like yes so I I would love to make more. I certainly think I'm worth more money. It might have more to do with the fact that this is a fairly new sport that may be still trying to find its way.

Victor Matheson again. But, you know, that's way less than you're making elsewhere. Now, do you anticipate that changing if we were to talk in five or ten years? UFC is making a lot of money and they've been growing really fast. Do you think that the athletes will eventually get the leverage to get that share up to 30, 50, 60 percent of revenues? Well, we did not see that happen in any of the other individual sports until we had those athletes joined together in some sort of important way. The athletes' unions, or players' associations as they're often called, negotiate not only pay scales but also work conditions, schedules, health and safety, and various benefits. In other words, they do what labor unions have always done. The NFL Players Association is, in fact, a member

of the AFL-CIO, the big federation of unions that include the American Federation of Teachers and the American Federation of State, County, and Municipal Employees. Here again is Damora Smith, executive director of the NFL Players Association. I think it would be fair to say, and people should understand, that we are labor, and the National Football League and its member teams are our management. And there is no difference in the hostility between us than there would be between management writ large and labor writ large in America. We literally have engaged in hundreds of legal fights with the league and the teams in the 10 years since I've been here. Smith, we should say, is a lawyer who's worked in private practice as well as at the U.S. Department of Justice. The history of labor and management in the United States has been one, for the most part,

where management has successfully lobbied and changed laws through litigation that have affected a net negative for employees. So we don't necessarily shy away from making sure that we are aggressive in the way in which we protect our players' interest, whether it's issues of healthcare, issues of control, issues of free speech, issues of injury care, issues over money, shares of revenue. The league locked us out in 2011, and that means not only cutting off the players' right to earn a living, but they cut off the health insurance for thousands of players' wives and dozens of players' wives who were expecting children during the lockout. They've issued and engaged in legislative action to take away our players' right to medical care. And certainly we've had our skirmishes over commissioner discipline and revenue. Now, as I understand it, some team owners are supporting legislation in a handful

of states that would take away workers' comp from injured players. Do I have that right? Yeah, we've probably had somewhere between 10 and 15 state legislature fights with bills supported by team owners to take workers' comp away from professional athletes, which is terrible. And their argument then is what? That it shouldn't be... Their argument is that they are cheap. And tell me about some of the other legal challenges you filed, whether against the league or legislatures, whether it has to do with health care, revenue share or whatnot. This show is no way long enough to go down that road. Considering all the issues that NFL players face

and considering that they play in the richest sports league in the history of the world and have a relatively strong union, you might think that athletes in lesser sports would like to emulate them, but not necessarily. I've been contacted a couple times now by people that want to unionize,

and I just have a really hard time getting on board with it. That, again, is UFC fighter Lauren Murphy. I mean, I would love to see fighters get signed to the UFC, and right off the bat, they're making, you know, way more money, like, you know, enough to live off of for an entire year. Like, I think that would be great, but I don't know if it's feasible. I don't know what the UFC's finances are or how the budgets work out or how any of that works. Part of that mystery is intentional. The UFC, as we mentioned, is privately owned.

An investor group led by the WME-IMG agency bought it in 2016 for about $4 billion. If we unionize and suddenly WME-IMG says, OK, well, this isn't what we anticipated when we bought the UFC, so we're going to have to cut out a bunch of divisions so that we can afford to pay the fighters that we have left. And so they get rid of the less popular divisions, say, and now you're getting rid of the fringe weight classes and the women's weight classes and stuff like that. Well, now I've gone from, you know,

maybe making a smaller portion of the pie to making nothing. Murphy's situation highlights one of the common problems for any sort of collective action, whether in sports labor or anywhere. The people with the most to gain, the Lauren Murphys of the world, usually don't have much leverage. They can just be replaced. The superstars, meanwhile, do have leverage, but they often have little incentive to push for collective action. One exception was the tennis champion Billie Jean King, who in 1973 threatened to boycott the U.S. Open unless it awarded equal prize money for women and men. The U.S. Tennis Association met her demands. King also helped found the Women's Tennis Association, which pushed for equal prize money in all the major tournaments and has helped turn tennis into one of the few sports in which the women's competition is arguably as high profile as the men's. There is a movement currently underway in beach volleyball to gain more leverage for the athletes, again with a female superstar leading the charge.

For so long, it's been one top athlete raising their hand saying that's not enough. And if one top athlete boycotts, who cares? You know, and the divide and conquer, you know, strategy happens all the time. That, again, is Kerry Walsh Jennings, one of the most decorated and high-profile players in beach volleyball history. The athletes have no leverage because the athletes aren't unified. And we've been told for so long that your sport is small. This is what you deserve. This is as good as it gets. In 2017, Walsh Jennings was part of a group of players that tried to negotiate a new deal with the AVP, the Association of Volleyball Professionals, which runs the biggest beach volleyball tour in the country with eight events a year. It is not a big money

maker for the athletes. The top player last year made, I think, just under or just over $38,000. We pay for our training, we pay for our coaches, we pay for travel, we pay for hotel, and that was the top player in the country. Like many sports leagues and tours, the AVP operates in a way that might make you think monopoly. So they own you for 365 days for possibly eight days of work that you're probably not even, you maybe, if you lose your first two, you're maybe making 500 bucks. And so it's just the athletes are being held hostage. Basically a gun was held to the player's head saying, if you don't sign this, we're going to fold the tour. There was no other alternative. We got calls the night before the deadline, girls crying, saying, Carrie, we want to sit with you and fight with you, but I can't pay rent unless I play in this tournament next week. In the end, Walsh Jennings refused to sign the contract,

but she's sympathetic to the players who did sign. Oh, for sure. And I understand they had no other choice. And some people never agreed with us. They're like, you know, I believe this is it. And we should be grateful that, you know, AVP is giving us these limited opportunities. I was like, that's totally fine. You know, I'm the CEO of my life. I do not want to give the reins to my life and my success to someone else's hands. And I do not want to be kept small. As one of the stars of her sport, Walsh Jennings had the leverage to walk away. To her, it wasn't just about the money. She feels the AVP doesn't have a vision for growing the sport in a way that will benefit the athletes.

I went in October or November of 2016 and said, can you please lay out the next four years? You know, we have this contract coming up. Please give me your plans for growth for all these things. There were zero plans for growth. They were going to go away from TV. It was going to be an exclusive contract for eight events, maybe up to 10 by 2020. They would not increase the prize money.

That wasn't in their business model, they said. So she has started an alternate tour called P1440. The P is for platform and 1440 for the number of minutes in a day. Walsh Jennings wants to push people to use every minute wisely. We knew in creating P1440 that if we were just to be another volleyball property that hosts events, we would not be a sustainable business. And so it's competition, health and wellness, personal development, and entertainment. So we are a festival. We're not a volleyball tournament.

We are a full-blown festival. One big problem? A lot of the players that Walsh Jennings would like to play in her events are under an exclusive AVP contract. So the AVP has eight events a year. If you want to play anywhere else, you have to ask for dispensation. And everyone who's asked for dispensation to play in our events, even though we scheduled around their events, we're not conflicting at all, we're in their offseason, they've been told no. Walsh Jennings is 40 years old, fairly ancient for a competitive athlete. She's preparing now for the 2020 Summer Olympics in Tokyo, which will likely be her last. If nothing else, her new startup league is a great project to be involved in when her playing days are finally over. There is a famous saying, every athlete dies twice.

Once when they draw their last breath, the other when they hang it up. There's a point at which they'll stop doing what they've been doing since they were kids, the thing that's driven them and often given shape to their lives. It's inevitable and it's dreaded, a sort of living afterlife. I think about the end, meaning the specific moment that it ends. I think about the moment I tell my wife. I think about the moment I tell my family. I think about those moments. That's J.J. Redick, who's playing in his 13th season in the NBA,

currently with the Philadelphia 76ers. And it's anxiety-inducing. Sometimes, actually, if I'm having a dark moment and I think of that moment, I cry. Like, I think about what I'm going to do after basketball on a daily basis. And there's a level of fear of the other side. And my, I hate to say this, but so much of my identity in any professional athlete is wrapped up in your sport. Since I was eight or nine years old, like, I've been a basketball player. It's what I've done.

I think that's a question that a lot of fighters really struggle with. Lauren Murphy of the UFC is 35 years old. Fighting kind of becomes your whole identity. And because it takes so much of our time, it's our entire lives, it can be hard to move on. This entwined identity, personal and professional, is something that Sudhir Venkatesh has been studying for years. I'm a professor of sociology at Columbia University in New York. Venkatesh tries to understand how individuals operate within groups in all sorts of settings? Yeah, my method is to spend as much time with groups, tribes, people, get to know their world a little bit. I started with street gangs, boy, a long time ago, about 30 years ago, gun traffickers and

prostitutes, people who were doing all sorts of illegal things. And since then, I spent a couple of years at the FBI. And that's my chosen profession in life, spend as much time with people and get their story. He's had a lot of success getting their stories, but professional athletes are particularly tricky. It's a little difficult for me to just show up on the sideline and put a hoodie on and pretend that I'm a member of the team. So I have to create opportunities to observe.

One such opportunity came via a program he developed to teach athletes, often toward the end of their careers, about business skills or philanthropy. This let him see, up close, how they were adjusting to the afterlife. Well, the life of an athlete from very early in their career is dominated and regimented by people other than themselves. This kind of all-encompassing, controlled setting has a name in sociology. It's called a total institution. An example of a total institution would be a prison. So your day is structured from the moment you get up. They tell you where to go, what to eat, when to eat, when to shower, and so on. Venkatesh was interested to see how athletes, having spent so much time in a total institution,

could adjust to a more fluid setting like an office. He found there were some surprising advantages. A lot of professional athletes, I find, handle interpersonal conflict very well. And they are used to it. They are used to being told that they didn't perform well, they need to perform better, they need to work better in a team, they need to listen better, all the sorts of things that many of us, including me, are very fearful of in an office setting. We're going to get reviewed,

we're going to get assessed. It's often done via email late at night. And these folks are really, really good just having someone walk up to them or going to somebody and not having it out, but just getting past whatever is in between and blocking them. But this upside, Venkatesh discovered, has a downside. Most of us non-former athletes aren't accustomed to having someone get in our face like that. Venkatesh recalls one former football player, he calls him Derek, who was working in sales at an investment firm. He noticed that on the floor, there were no open spaces. He was used to locker rooms.

He was used to not having a lot of privacy. And it was difficult for him to work in a team setting when what he was supposed to do was to use telecommunications or email to make appointments or to reach out. And instead, he would just be going down, knocking on doors really hard, going into offices, crossing the boundaries of people. And people just got really scared because here's this very big guy coming at them. And for Derek, there was actually the opposite, that when people were closing doors or people were sending him emails, he felt like that was impersonal. That was not polite.

That was not effective. Why don't we just solve the problem immediately and move forward? So he had to go through a little bit of training. And you can imagine that that's not part of the normal onboarding that a company might do. Transitioning to this living afterlife can present all sorts of challenges studies of former NFL and NBA players even the ones who've made a lot of money show they are grotesquely prone to bankruptcy and remember these are the lucky ones who made it but the demands of their profession can make it really hard to have time to acquire real-world skills. There's also the long-term health consequences of playing competitive sports. A recent study

of athletes from Indiana University found that by middle age, they were twice as likely as non-athletes to have health problems, including chronic injuries, that affected their day-to-day activities. But even if you make it into middle age with your health and with your finances intact, there's still the risk of a full-blown existential crisis. I mean, most people's journeys are so much longer that when they do succeed, they like die a few years after or something, you know? Dominique Foxworth again. It's an interesting thing to happen to somebody at this age.

It feels like more of a midlife thing. And for athletes, it's a unique thing. Successful athletes, it's a unique thing that in your 20s or 30s, you're like, now what? Part of it is missing the action. Lauren Murphy thinks about the people she trains with. I was surrounded by a team, and I had never experienced anything like that before in my life. We all, you know, had this thing in common where we wanted to compete, and we all wanted to do well, and we supported each other in that.

And when you bleed and sweat and cry with somebody every day, you know, you get to be pretty close to them. There's also the fear that you will never be this good at anything again, or as relevant. J.J. Reddick. Look, the reality is you have a lot more power, a lot more juice, a lot more relevancy when it says your name and it says active NBA player versus your name, retired NBA player. So me as a person, nothing will have changed five years from now, but I won't have active NBA player next to my name. The thought that crosses your mind is like, I'm really good at basketball. I've done it at a high level for a long time and I've had success and it's provided me a very nice living. And then you're like, what if I try something else and I'm just awful at it? I feel like I'm as prepared as anyone for the other side of it,

and it still scares me. Dominique Foxworth thought he was pretty prepared too. He and his wife had a couple kids. He didn't know exactly what he wanted to do other than keep winning. I went to business school because I was like, all right, now I'm going to keep competing. Like I'll go to the best business school.

And then I got there and I was surprised with like how much mushy, soft classes that we had that was about our feelings and integrity and all that stuff. And I do remember one of the professors said that it wasn't to me directly. It was just to the class, but it felt like he was talking to me directly. But he said something to the effect of the operating system that you use to get here may not be the operating system that you need going forward. And like that resonated with me because I feel like that's definitely true for me. But I don't know. They don't just like release updates for humans. So modifying my operating system is a slower, more challenging process.

Foxworth thought he'd like being chief operating officer of the NBA Players Union in New York. My wife was pregnant with our third child and she was not feeling good. And I was getting up at like 6.30 to ride the subway to work with a bunch of other people who weren't happy about where they were going to work. And I remember thinking like, am I happy? I have enough money that I don't have to be unhappy. For fun, he started writing about sports. Now he writes and does broadcasting for a variety of ESPN outlets. Like I went to business school in part because I fancy myself

as a smart person who's more than an athlete. And so like there's parts of me that's like embarrassed that I like write about sports and talk about sports. But then there's parts of me that's like, this is awesome. I get to pick up my kids from school and take them to school. It's not that like, oh, my life is boring. It's like, am I doing the right thing? Am I doing the best thing I can with this fortunate situation that I'm in? What also like exacerbates it, I think, is a feeling of loneliness, honestly, which and it's not like I have three kids and my wife and I'm not like alone, obviously. And I love them and I have fun with them.

And but throughout my life, I have been almost myopically focused on a goal, which being focused on that goal gave me purpose. And I'm sure I'm going to butcher the Nietzsche quote, but it's something to the effect of when a man has a why, he can bear almost any how. And I don't drink now. I never drank in my life. I never smoked weed like I was singularly focused on doing everything. Every decision I made was like, all right, I'm going to get close to this goal. And I my people I was close with in high school, like those aren't my friends anymore. People I was close with in college, like not really my friends anymore. And then at 35, I'm in D.C. where my wife has a bunch of family and friends, friends that she's been close with since they were in the second grade. And like and I'm like, I don't really have that. So I certainly don't like feel sad or anything. But these are things that I am becoming more aware of now. I feel like I'm in a perpetual state of transition, which is interesting

and uncomfortable at the same time. Thanks to Dominique Foxworth and all the other athletes we heard from today and throughout our Hidden Side of Sports series. Also, the team and league officials, scholars, and everyone else. If you want to hear my full conversation with Foxworth, it was a long one and fascinating. We'll be publishing that soon. Meanwhile, coming up next time on Freakonomics Radio. My name is Raghu Rajan. He was one of the very few people who essentially predicted the financial crisis.

Yeah, well, it was clear there was a reason for concern. Rajan's been busy since then, including a stint as head of the Central Bank of India. So what's he worried about now? Quite a few things, including the global taste for populist politics. It's the answers they provide which often are too easy and wrong at the same time. Wrong-headed populism, bad economics, and Rajan's prescription, getting back to community. That's next time

on Freakonomics Radio. Freakonomics Radio is produced by Stitcher and Dubner Productions. This episode is produced by Anders Kelto, Derek John, Alvin Melleth, and Alison Kreglow, with help from Matt Straup and Harry Huggins. Our staff also includes Greg Rippin and Zach Lipinski. We had help this week from Nellie Osborne. Our theme song is Mr. Fortune by the Hitchhikers. All the other music was composed by Luis Guerra.

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