Wednesday, July 11, 2012

Why do Canadian sports teams perpetually suck?

Pardon my language, but you know its true. I wish it wasn't so, yet there is no denying it. Canadian teams suck. Think about it: the Expos, the Blue Jays, the Raptors, the old Winnipeg Jets, and the new Winnipeg Jets - all have one thing in common, they are not very good franchises. Yes, they might have a couple good seasons here or there. A championship ring even might have been won on rare occasion . Overall though, they just are not very good. Believe it or not, its not really their fault.

They are all terrible for the same reason that has nothing to do with sports. It's not the fact that their country is a frozen wasteland (which should be an advantage in hockey) or that their national food is poutine, because God knows that we have unhealthier food here in the states. It's about taxes. 

The upper income bracket, which most professional athletes, fall into is almost 50 percent, whereas in the United States it is 35 percent. Canadian teams therefore need to offer 15 percent higher salaries to their players for their offers to be competitive. Frankly, I - like most people - don't think about these things. My paycheck is no where close to the point where it would make a significant difference on which side of the border I live in, but for these people - and more specifically, this guy - it is a factor of consideration. It is such a large financial burden that singles out only a handful of teams per league that it would almost be miraculous if these franchises were any good.

To be perfectly clear, most people and businesses are not motivated purely by taxes. It has been clearly proven over and over again that people do not flee from high taxes. For people, considerations such as family, community, and housing prices tend to trump marginally higher tax rates. For businesses, it is labor costs, competitors, and supply lines. It just happens that professional athletes are in an unusual business that naturally combines a nomadic lifestyle, high salaries, and a short career span. A nomadic lifestyle means that they are going to be moving around a lot anyways. High salaries means that marginal tax rates matter. A short career span means that they often only have a handful of years to make as much money as possible since their skill set doesn't really warrant any career after sports. Many go bankrupt. All of this creates a formula for following the money.

That leaves us with one question: How do most sports leagues get the Canadian audience to watch their sports while not physically being in Canada? Easy. By being as close to the border as possible while still being on the US side. Over 75 percent of the Canadian population lives within 100 miles of the US border. Take the NFL for example (moving east to west) - the Buffalo Bills (Toronto), the Detroit Lions (Windsor), Minnesota Vikings (Winnipeg), and the Seattle Seahawks (Vancouver) are all located in places that overlap with Canadian media markets.

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