Academic

"I just think it's an unfair market value"

By Gordon Smith, Christine, Hurt, Vic Fleischer, Fred Tung, Lisa Fairfax, David Zaring

Just catching up with Diana Nyad's commentary on the NFL draft from last Thursday, and I am wondering if I have ever heard a dumber statement on Marketplace. (Despite its name, this is a program that is not immune to stupidity about markets.)

Nyad is outraged by Jake Long's new $57.5 million contract with the Miami Dolphins because it approximates the terms of Tom Brady's contract. Nyad is not criticizing the Dolphins for being bad negotiators. She is criticizing the NFL for not imposing salary caps: "Maybe a two-year rookie cap would make sense. Everyone would benefit." Really? Jake Long would benefit from a cap? How about all of the other linemen, who can use Long's new contract as a base in their next negotiation?

Kai Ryssdal asked the obvious question: "What about letting the market work. The team owners are willing to pay. Why shouldn't the players take advantage?"

Nyad: "I just think it's an unfair market value.... It creates a false market value. Tom Brady is setting the market value. Now you've got a rookie ... he's the highest paid lineman in the league and he hasn't played a down yet! It's wrong!"

Someone help me out here: what is a "false market value" in this context? Is there any information failure that would cause us to want to protect the Dolphins from their obvious mistake?

By the way, if you follow the link to the audio, you will be treated to a baffling comparison to the market for newly minted lawyers.

I wonder how much Diana Nyad is paid to be the Marketplace "Business-of-sports analyst." Whatever the amount, I smell "false market value."

Full post as published by Conglomerate on May 04, 2008 (boomark / email).