Fairness and the Agent’s Cut
In the spirit of American football season, here are a few quick questions relating to NFL agents and their cut of the players’ pay. As far as I can tell, there seems to be a 3% cap on how much of a player’s income the agent can charge as a fee. However, there doesn’t seem to be a cap for other kinds of deals. Marketing deals pay the agent 20% of the marketing dollars on average. Now, granted that there is an artificial cap on agents’ fees let us imagine that there is no such cap. And while it is expected that the percentage that agents will charge will adjust once the cap is lifted, let us for the sake of argument, suppose that it would not. So, here is a set of questions for the league:
1) Ordinarily in the absence of a cap, who has the bargaining advantage in negotiating the fees? The player or the agent?
2) Would the answer to Qn 1) change if the cap were in place?
3) Supposing there is no cap and the fee level doesn’t change, does this mean that the agreement is fair?
4) Supposing still that there is no cap, but this time the fee increases, is the agreement fair?
5) Is the answer to Qn 4) dependent on how much the fee increases?
6) Suppose that the cap is in place, but that the fee wouldn’t increase if the cap were to be removed, is the agreement fair?
7) Suppose that the cap is in place and that removing the cap will result in a higher fee being charged, is the agreement fair now with the cap still on?
8) How do you identify politically?
9) What is your opinion of NFL football players?
10) What is your opinion of NFL football players’ agents?
Here, I am just trying to get a rough gauge of your intuitions about fairness. I am not asking about whether we should regulate such agreements or whether such agreements are overall just, or advisable. I am just asking if you think whether the fee agreement is fair or not. I don’t want a detailed theoretical analysis. Why am I doing this? Because Rawls seems to imply in a passage that a fair agreement can only take place between people who lack any kind of relative bargaining advantage with respect to the other party. This ties into his justification for the veil of ignorance because according to Rawls, the terms of agreement that would be agreed to in the initial situation cannot be fair if people were aware of their bargaining advantages. Therefore, in order to arrive at fair terms of agreement, the parties must be unaware of their bargaining advantage. Presumably, Rawls wants to argue that one party should not be able to tell another that he should be satisfied with whatever he or she can get simply because beggars cannot be choosers. This doesn’t strike me as altogether right. Rather intuitively, I can see how people might suppose that agreements made in extremis are not fair. And certainly agreements made when both people are in an equal bargaining position are fair. However, it seems to be that the latter situation hardly ever happens. It seems that many people would still consider agreements where there is a difference in bargaining power to be fair so long as the disparity is not too wide. It also seems that people are willing to forgive even greater disparities if such disparities are a product of honest talent and effort. i.e. if I develop my talents such that it is a scarce and valuable resource, I don’t think people will necessarily begrudge the improvement to my bargaining position that such scarcity affords me as long as I don’t take advantage of people in distress. Now, it may be that the distribution of talents is morally arbitrary and detailed theoretical enquiry might result in us having to change our views. But the view in which our talents and character are undeserved is a deeply counterintuitive view and therefore not shared by all even if it is ultimately true. Ralws’s theory, however, which aims to be freestanding and acceptable to all, cannot rely on controversial premises. It has to rest on widely accepted premises. So, if you can, try to answer the next set of bonus questions:
B1) What makes an agreement fair or unfair?
B2) Do you know of any examples of a fair agreement where the parties have somewhat unequal bargaining power?
B3) Which party has more bargaining power?
B4) Why is it still fair?