Saturday, 15 October 2011

Distributive Justice and Premier League TV rights

What I often do on this blog is take some big news story, and try and show how ethics or political theory can shed some light on it, or how it highlights some argument within those disciplines. I do this partly to convince myself I’m not wasting my time in studying these subjects, and partly because I am obsessed with them, and see their echoes everywhere. Either way, I’m not sure how convincing I am when I try to persuade you of the relevance of moral and political philosophy.

However, there are occasions when the argument doesn’t have to be forced, the parallels don’t have to be stretched: the issue that people are talking about is almost exactly the same as the one we discuss in our seminar rooms. Events behind the scenes of the English Premier League this week have provided me with one of those rare joyous occasions, as the administrators of England’s elite football clubs unconsciously replay an old debate between the political philosophers John Rawls and Robert Nozick.

The philosophical question which divided Rawls and Nozick, and which has caused the rift between the Premier League clubs is basically whether egalitarian distributive principles can be justified to the most talented or productive. Or, to put it more bluntly, how can the rich be persuaded to share with the rest of us?

While Rawls and Nozick were of course pitching their discussion at the level of society, Liverpool F.C.’s managing director, Ian Ayre, has posed a similar question to the Premier League. As things stand, the twenty clubs of the English Premier League collectively sell the rights to broadcast their matches on television, and share the money more or less equally. Ayre has argued that this is unfair on the bigger, more famous and more successful clubs like Liverpool, who he believes contribute more to the quality of the Premier League, and so should receive greater reward.

For Rawls, the question of distributive justice arises in a society because it is a “cooperative venture for mutual advantage”. Everyone in society contributes in some way, and everybody is better off in virtue of the fact that the cooperative scheme exists. The problem then is how to divide the proceeds of their cooperation.

The Premier League is a perfect example of a cooperative venture for mutual advantage. The twenty clubs each play thirty-eight games every season, and are all better off as a result of participation in the league than they would be out of it. Liverpool need the Premier League if for no other reason than to provide competitive opposition to play every week. So each club plays a role in putting together the product that is the Premier League, which is packaged and sold all over the world. But how to divide the proceeds?

Rawls’ answer is that

“since everybody’s well-being depends upon a scheme of cooperation without which no one could have a satisfactory life, the division of advantages should be such as to draw forth the willing cooperation of everyone taking part in it, including those less well situated. Yet this can be expected only if reasonable terms are proposed”

The “reasonable terms” that Rawls suggests is his ‘difference principle’: inequalities can be justified only if they benefit the worst off members of society. In the Premier League context, at least, I can’t think of any such justifications for inequality, so a Rawlsian approach to the question of TV revenues would almost certainly endorse the present arrangement, equal shares.

But as Nozick observes, though distributing the fruits of cooperation equally is certainly one way to elicit the willing participation of all, it is only one of many possible arrangements. Presumably, many Premier League clubs would be willing to play for much less than an equal share of the TV revenue. A Rawlsian principle, as he sees it, arbitrarily advantages the worst endowed. The ‘worst endowed’ in Rawlsian terminology basically means the least productive, those capable of adding the least value. Thus the Manchester Uniteds and Chelseas, with their skill and glamour are well-endowed, while teams like Norwich, who draw much fewer people to the league, are badly endowed.

Nozick argues that the badly endowed gain more from cooperation than the well endowed. If Liverpool were to unilaterally resign from the Premier League, this would make it much less attractive to fans across the world, and so would harm clubs like Queens Park Rangers. If QPR were to leave the league, they could be easily replaced (as might well happen if they are relegated at the end of the season). As Nozick would doubtless insist, QPR need Liverpool more than Liverpool need QPR.

In this context, Nozick would see it as cheek for the less endowed small clubs to hold the rest of the league to ransom and demand an equal share of the Premier League spoils. The obvious alternative is to pay clubs according to their marginal product – give them the full value that they add to the league. So, for example, Liverpool would be paid as money as the league would lose by their absence.

Ian Ayre’s argument is Nozickian in tone:

"Is it right that the international rights are shared equally between all the clubs? Some people will say: 'Well you've got to all be in it to make it happen.' But isn't it really about where the revenue is coming from, which is the broadcaster, and isn't it really about who people want to watch on that channel? We know it is us. And others”.

He acknowledges that all the clubs are dependent on each other for the scheme of cooperation to work, but insists that the bigger clubs deserve more money because they contribute more to the value of the league.

So far as this argument goes, I have to say my sympathies are with Nozick. The mere fact of mutual dependence is an insufficient foundation for a persuasive argument in favour of egalitarianism. But just because they have the better of this argument does not mean we have to concede that Ayre’s behaviour is morally acceptable. There are, as T.M. Scanlon observes, a “diversity of objections to inequality”, and many of them are apt here. One objection is that inequality gives too much power to the rich, who can then buy off the power, and wield excessive influence. Another proceeds from the law of diminishing marginal utility, the observation that extra money is worth more to the poor. In the football context, the argument is that TV revenues are just a drop in the ocean for clubs with huge sponsorship deals, Champions’ League revenue and the like, but vital to clubs without these extra sources of income.

There is hardly space here to cover all the arguments made by philosophers on the subject of distributive justice, but it is a set of debates that Ayre and his colleagues may find interesting and familiar.