Derek Thompson on the American Sports Plutocracy, the NBA’s 2016 Black Swan Event, and the WNBA’s Growing Pains

In 2012, Andrew Ross Sorkin wrote in the New York Times that using insurance money to buy a baseball team "seems like a lawsuit waiting to happen." Twelve years later, that lawsuit appears to have arrived. Mark Walter, the Dodgers owner and Guggenheim chief, now faces a $15-20 billion discrepancy in how he classified loans from his life insurance companies to his sports assets—money he is now trying to raise by selling the Lakers, Chelsea, and anything else he can flip. For Derek Thompson and Bill Simmons, this is not just a fraud story. It is the logical endpoint of a system they argue has been rigged from the start.

The Legal Socialism of American Sports

Thompson's central argument is that American professional sports is not a free market but a government-protected cartel. The law creates artificial scarcity—you cannot simply start the 31st NBA team—and then grants leagues antitrust exemptions that allow them to collude on salary structures, share TV revenue, and cap player earnings. "It is illegal for Microsoft and Google to get together and decide that just because Microsoft had the worst stock performance, they should get the first overall draft pick of Stanford computer science grads," Thompson says. "But in sports, it's completely standard practice."