Cryptocurrencies and derivatives have no inherent value. It’s not like gold, a precious metal that can actually be used to make other valuable things.Homer wrote: ↑Thu Apr 28, 2022 11:01 amThank you.DocBarrister wrote: ↑Thu Apr 28, 2022 8:24 am Here you go.
Casual observers may assume that despite this lack of popularity, baseball is still somehow insanely valuable. This is an illusion. Major League Baseball generated around $11 billion in revenue in 2019, but this figure does not accurately reflect the demand for its product. The astronomical salaries that continue to be enjoyed by the sport’s stars (if that is the mot juste) are a result not of the game’s nonexistent popularity but of the economics of cable television providers, who bundle regional sports networks alongside dozens of other channels so that anyone with cable TV is buying baseball whether he likes it or not.
Mike Trout’s $426 million contract is effectively being paid by millions of grandparents who just want to tune in to Anderson Cooper or “Antiques Roadshow.”
https://www.nytimes.com/2022/04/06/opin ... alize.html
DocBarrister
Reading the op-ed (not actually an "article," but the line between news and opinion tends to be a bit of a moving target for this particular poster) already knowing Doc's reaction to it was a really glorious DocBarrister moment for me. Anyone who's been enjoying Doc's speculations up to this point is really encouraged to click on the link to the NYT piece. It uses phrases like "current (absurdly inflated) market valuation," and although very much tongue-in-cheek, is clearly based on the normal-person premise that market failures are ultimately unsustainable and sooner than later the selling price for baseball telecasts will revert to reflecting its actual economic value. Doc reads the same words and the dollar signs start popping off like flashbulbs above his head.
That combination of unbridled optimism and instinctive attraction to rent-seeking as an entrepreneurial strategy, it's just -- nobody does it better. Like wgdsr said, a generational talent.
Asset-backed securities often have market values that vastly exceed the market value of the underlying assets (sometimes with disastrous macroeconomic consequences).
Major League Baseball and its “stars” are assets that are almost certainly vastly overvalued. There is no way that Mike Trout is worth $426 million. Much of America doesn’t even know who he is.
But like cryptocurrencies, derivatives, and asset-backed securities (and indeed, entire companies like Tesla), the inflated market value is due to marketing, packaging, and perception.
I suspect if college lacrosse is packaged and marketed properly, it’s perceived value will continue to increase as a sport.
As just an example, how challenging was it to find a Bryant or Dartmouth college lacrosse game on national television 20 years ago? Has men’s college lacrosse expanded markedly over that time? Yet now, we can watch Dartmouth and Bryant almost weekly on the ESPN app. Has Dartmouth or Bryant really achieved anything to merit the additional broadcast coverage or revenue? It’s analogous to the mortgage-backed securities that became a problem 15 years ago. The quality of the underlying mortgages were not of concern … only the existence of mortgages as an “asset” that could be bundled, marketed, and sold.
It’s a matter of proper packaging and bundling that will largely determine the revenue that flows into college lacrosse. Actual popularity and viewership? If you’re thinking on those terms, then you are thinking in outdated 20th century concepts.
DocBarrister