Growth for Growth’s Sake
When I was a business student at Southwestern University in Georgetown, Texas I had a professor named Dr. Neville who was very involved in Georgetown politics. Georgetown has a population of about 30,000 and is roughly 25 miles north of downtown Austin. There were two factions in Georgetown; Those who wanted Georgetown to remain a quaint, rural town and those who wanted Georgetown to be another Austin suburb full of strip centers and housing developments.*
My professor was in the faction that wanted to keep Georgetown quaint. She told the class a man who looked all of 300 pounds turned to her and said, ‘You don’t believe in growth?’ She said it took every ounce of energy to not say, ‘Apparently your waist does,’ but she said ‘No, I don’t believe in growth for growth’s sake.’
For some reason that quote always stuck with me. Any economist will tell you slow, steady growth is much better in the long term than rapid, unsustainable growth. As work stoppages loom for two professional sports leagues Dr. Neville’s quote is becoming increasingly relevant again.
Essentially, NFL revenue increased so much over the last two decades that there is no way to sustain it. NFL owners have exhausted nearly outlet to increase team value at the rate it was increasing. They are asking the players to make concessions for the overall health of the league.
The NBA mirrors most labor situations. The owners of small market franchises are hemorrhaging money and can’t afford to pay superstar players. Contraction is a real possibility. No league wants to contract teams, but New Orleans and Memphis are as financially viable as a Bernie Madoff investment. Under the current CBA, certain franchises won’t survive. New Orleans already conceded and is being run by the league.
This may seem like a radical idea, but maybe pro sports leagues should follow the model of large companies and aim for slow, steady growth. Like Dr. Neville I do not believe in ‘Growth for Growth’s sake.’
* The rapid growth faction won and Georgetown now resembles another bland suburb.