seekingferret (![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png)
seekingferret) wrote2012-05-02 11:52 am
seekingferret) wrote2012-05-02 11:52 am
(no subject)
Obligatory baseball post time that nobody reads time.
Yankees lost Michael Pineda for the season with a torn labrum or something like that. I think it's something in the shoulder. The economics of injuries and sports are really dissimilar to anything else. Where else do you commit millions of dollars to an employee who, if they get even a minor injury, could be unable to work for you for a year or more?
There are ways in which the free agent market resembles a junk bond market. You buy risky assets, betting on their growth potential. If you get caught in a bubble you end up overpaying for those assets. Even if you don't get caught in a bubble, you're still risking a lot of money on something that could end up losing your whole investment, but you try to mitigate that risk with insurance policies and with diversificat... err.. bench depth.
And this takes me to a fascinatingly ghoulish idea I have. Fans love having an investment in their teams. Teams loving mitigating the risk on an investment. In the subprime market risk was mitigated using an instrument called a credit default swap, an insurance policy against default that was then securitized and sold to investors...
Why couldn't teams buy injury swaps on their players? The fans would love it, getting a chance to profit from the fluctuating risk of an injury to Johan Santana. Make lemons out of lemonade. Yes, it's ghoulish, and utterly morally bankrupt, but other than that, what objections do you have?
Yankees lost Michael Pineda for the season with a torn labrum or something like that. I think it's something in the shoulder. The economics of injuries and sports are really dissimilar to anything else. Where else do you commit millions of dollars to an employee who, if they get even a minor injury, could be unable to work for you for a year or more?
There are ways in which the free agent market resembles a junk bond market. You buy risky assets, betting on their growth potential. If you get caught in a bubble you end up overpaying for those assets. Even if you don't get caught in a bubble, you're still risking a lot of money on something that could end up losing your whole investment, but you try to mitigate that risk with insurance policies and with diversificat... err.. bench depth.
And this takes me to a fascinatingly ghoulish idea I have. Fans love having an investment in their teams. Teams loving mitigating the risk on an investment. In the subprime market risk was mitigated using an instrument called a credit default swap, an insurance policy against default that was then securitized and sold to investors...
Why couldn't teams buy injury swaps on their players? The fans would love it, getting a chance to profit from the fluctuating risk of an injury to Johan Santana. Make lemons out of lemonade. Yes, it's ghoulish, and utterly morally bankrupt, but other than that, what objections do you have?