Cuban Baseball: Ideology, Politics, and Market Forces



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Cuban Baseball: Ideology, Politics, and Market Forces



Katherine E. Baird
Assistant Professor of Economics

Interdisciplinary Arts and Sciences

University of Washington Tacoma

1900 Commerce St.

Tacoma, Washington 98402-3100

Phone: 253-692-5854

Fax: 253-692-5718
kebaird@u.washington.edu

July 2004
Forthcoming, Journal of Sport and Social Issues

The author would like to thank participants of the Sports Economics session at the 2003 annual meetings of the Western Economic Association International, Dave Corbett, Peter Donnelly, Mary Groebner, Milton Jamail, and Oscar Soule. Two anonymous JSSI referees also provided especially useful suggestions.


Cuban Baseball: Ideology, Politics, and Market Forces

Abstract

The organization of baseball in Cuba offers a stark contrast with the organization of baseball in the U.S. Whereas baseball in the U.S. is largely coordinated by market forces, in Cuba, political decisions account for the determination of player salary, team composition, team location, and the distribution of player talent. This paper examines the operation and outcomes associated with the organization of Cuban baseball. Although the Cuban model avoids some of the problems afflicting professional baseball in the U.S., a close analysis reveals the inequities and disadvantages in the Cuban model. The case study illustrates that organizing sporting leagues through non-market rules has its own drawbacks.



Cuban Baseball: Ideology, Politics, and Market Forces

In the U.S., the business of professional baseball is mostly driven by the ideology of a free market economy. Teams are privately held and purchased in a competitive market; teams compete for the best players, with players going to the highest bidder; and player pay tracks each player’s marginal revenue of product (how much money he generates for owners). Almost all business decisions reflect the profit motive, be it in the pricing of tickets, giveaways at the park, the marketing of teams overseas, the development of player and team persona, the contraction and expansion of teams, and what cities teams play in.


The organization of Cuban baseball offers a sharp contrast to the organization of professional U.S. baseball. In Cuba, insofar as the concept of team “ownership” applies, teams belong to the state; players earn a minimal state salary; players play for their regional team with virtually no player mobility; there is no advertising in the stadia, on radio, or on TV; and games cost just pennies to attend. Despite or because of these differences, the caliber of play in Cuba is remarkable, especially given its size (population 11 million). Until 1997, the Cuban national team went decades without losing an international competition. Today, knowledge that a Cuban is playing in a game is enough to attract professional scouts.1
Seen in contrast with baseball in the U.S., some suggest that Cuban baseball represents a superior way to organize and structure the game. Fans of U.S. baseball increasingly criticize the seemingly perpetual imbalance among teams, the huge player salaries (now averaging more than $2.5 million a year), taxpayer-financed stadia, and the frequent labor disputes between extremely wealthy players and the even more wealthy team owners. Not surprisingly, some MLB fans point approvingly to the lack of commercialization in Cuban baseball, the absence of gimmicks and distractions at the ballpark, and the greater access the average fan has to players. Even players seem fresher, more enthusiastic. As one U.S. observer of Cuban baseball notes: “the players seemed exuberant, enjoying simple games of catch and pepper” (Cummings, 2003). Whitesmith (2001) writes about the thrill of discovering the past in Cuban baseball: “To the devout baseball fan, it’s a trip to the pure well of a kind of baseball the rest of the world has strayed from – the veritable Vatican of baseball: Cuba.”
The paper address the question of whether the Cuban model of organizing baseball along less market-driven criteria leads to more desirable outcomes. Many analysts (not to mention fans) believe the answer is yes.2 Richards (2003), for example, proposes a quite radical transformation of MLB that would give ownership of teams to the public; would severely limit player mobility; would introduce a salary structure based on seniority; and would assure affordable tickets. His proposal thus addresses the most commonly-heard fan complaints of the game; it would at the same time, however, require a level of state regulation over baseball that would make it look more like Cuba’s than the current system. With that in mind, a close analysis of the Cuban system – how it works, what outcomes it generates – can be instructive. Not only is such an analysis interesting in its own right because sports leagues in socialist countries are much less studied and understood than those in market-oriented countries, it also elucidates the relationship between the political economy in which leagues operate, and the outcomes that the leagues generate. Understanding these linkages is crucial to evaluating proposals such as those that Richards advances.
To this end, this paper examines baseball in Cuba, as Cuba offers one example of league play that purports to uphold egalitarian rather than market values. This case study is not meant to be generalizable to all examples (real or hypothetical) of league play under non-market rules. To some extent, the Cuban story is a unique one. However, the paper is meant to demonstrate that alternatives to market-driven sports leagues inevitably have their own downside. Evaluating these tradeoffs is necessary to assess whether alternative ways of organizing league play can, in the end, be advantageous for citizens. In the case of Cuba, the paper shows that the attributes of the Cuban baseball system that observers most approve of – regionally-based teams, high caliber play, players motivated by the love of the game, and a seeming lack of profit motive – are achieved through the government’s exploitation of players, its extreme control over the choices of players, and a persistent imbalance in team composition.
This paper is presented in three sections. After a brief history of Cuban baseball, the paper focuses on the organization of baseball in Cuba today. In this section, three specific issues are examined: the operation of player labor markets, player pay and exploitation, and competitive balance in the Cuban League. A third section concludes that, as shown in the Cuban case, the use of political systems to pursue organized sporting goals that are at odds with market forces, inevitably have their own downside. The case that government regulation of sporting leagues can improve on market outcomes still needs to be made.


A. A Brief History of Baseball in Cuba

Baseball in Cuba has a long history, as organized league-play dates to 1878 (roughly the same time as U.S. baseball). From Cuba’s independence from Spain in 1898 through the first half of the 20th century, American interests dominated Cuban politics; one result was that during this period the two countries developed close political, economic, and cultural ties. Among many other aspects of Cuban life, this link with the U.S. was evident in organized baseball. Before Cuba’s revolution in 1959, professional baseball in Cuba baseball was closely associated with professional baseball in the U.S.. For example, many MLB teams played exhibition games or their entire spring training schedule in Cuba. The best (white) Cuban players played in the major leagues, Americans often played for Cuban teams, and major league players would often play in Cuba’s winter league. In 1946, the Havana Cubans joined the Florida International League as an affiliate of MLB's Washington Senators, and thus Cuba then became a direct participant in U.S. professional baseball. In 1954, the Cubans’ owner moved the Havana team over to the Triple-A International League, renaming the team the Cuban Sugar Kings. The team was affiliated with the Cincinnati Reds, and was so successful that in 1959 it won the minor league World Series.3 Many Cubans hoped that there would one day be a Cuban MLB franchise.


Cuba’s 1959 revolution dramatically changed baseball in Cuba. The revolution struck at the heart of American interests in Cuba in that most private property became state property; this, coupled with Cuba’s emerging ties with the Soviet Union led to growing hostility between the two countries. First to change in baseball were the formal relationships between Cuba and MLB. In 1960, the International League voted to relocate the Cuban Sugar Kings to Jersey City. Eleven Cuban players, faced with the option of remaining in their country or playing professional baseball, chose the latter and left their country (Rucker and Bjarkman, 1999: 8). Shortly after the loss of the Sugar Kings, Cuba’s winter league circuit was forced out of business (Rucker and Bjarkman, 1999: 185).
Second to change in Cuban baseball was its organizational structure. Part of Castro’s plan for revolutionizing Cuba entailed revolutionizing sports – baseball in particular. This eventually led to the country’s adoption of a model of “physical culture” prevalent in the Soviet Union and other socialist countries (Pettavino and Pye, 1994: 10-12). This model emphasizes both mass participation in sports, and the development of champions. According to both Marx and Lenin, an individual’s physical and mental development are linked, and must be shaped by socialist society to assure strong character and values. Mass physical culture is one way to accomplish this, which also serves as an additional means of promoting state ideology among the masses (Pettavino and Pye, 1994). Mass physical culture in Cuba today remains important, and involves a highly structured system of physical education within the schools, as well as an extensive system of special sports schools where talented young athletes develop skill in dozens of sports (Pettavino, 2004).
Unlike mass participation in sports, the socialist emphasis on developing champions is done largely for strategic and nationalist reasons. State Pettavino and Pye (1994: 14): “Through competition in sports, the other peoples of the world could observe the differences between the socialist and capitalist systems, and compare them. The hope, of course, was that such a comparison would show the superiority of communism.” Under socialism, it was believed that talented athletes (as well as scientists, teachers and janitors) would be motivated by patriotic duty to perform for their country, not by money. A new socialist basis for the relationships among players, fans and the sport would result in a higher caliber play, greater fan appreciation, and a stronger public identity with sports – in short, a superior system.
Castro’s aversion to professional baseball – the yanquie’s favorite sport –has been particularly acute. Since the revolution, Cuban officials have characterized professional sports in the U.S. as a “capitalist perversion of athletics” (Jamail, 2000: 49). Castro himself has likened professional sports to slavery (Jamail, 2000: 29)4, and sought to remake Cuban baseball reflecting the values of the revolution (Pettavino and Pye, 1994). For several reasons, achieving excellence in baseball has been especially important to Cuban officials.5 For one, the prospect of beating Americans at their own game has long held special appeal to Cuba’s leaders (González Echevarría, 1999: 354).6 Excellence in baseball has been seen as a way to showcase for Americans the successes of the revolution. Second, Cubans have historically been among the most fervent of baseball fans, and have long been demanding of high caliber play.
Over the decades, the particular role of baseball in Cuban ideology and politics has remained obvious in the public pronouncements of officials and in the public statements of players. Cuba’s vice president recently was quoted as saying that in Cuba, sports are “not only the fruit, but also the symbol of our Socialist revolution” (Price, 2000: 35); and Castro regularly links the performance of Cuban athletes with the status of the Cuban revolution (PBS, 2000). In Cuba, athletes are expected to be political as well as athletic examples for others to emulate, and athletic training is combined with political training; moreover, promotion within the sports system is based not only on talent, but on the degree of an individual’s perceived support of the government (Pettavino and Pye, 1994). One of Cuba’s best baseball players, Antonio Pacheco, is the epitome of the ideal athlete. Not only is he athletically gifted, but his public pronouncements lend strong support to the Cuban government. In 2000, he made the following statement in a program aired in the U.S., in response to questions about why he does not defect:
I think I represent to the fans the athlete formed by my country; the athlete that all Cubans want to see; the athlete who is a role model for all the Cubans who put their trust in me; the athlete who will never leave his people; the athlete who will never betray them; the athlete who will defend his flag with love and dignity. I think that is where the fan’s admiration and respect come from….Cuba for me is like my mother, and I will never abandon my mother (PBS, 2000).
B. Post-Revolutionary Baseball in Cuba Today

In 1962, the Castro government replaced Cuba’s professional baseball system with a new amateur baseball league called the Cuban League. Post-revolutionary baseball in Cuba was to be based on a socialist model of amateur sports not driven by money, but by national ideals. Cuba’s Commissioner of Baseball, Carlos Rodrίquez Acosta, underscores baseball’s association with nationalism:


The people have an incredible sense of ownership over Cuban baseball. It’s a symbol. I’d say like the flag, like the coat of arms, like the national anthem. Baseball has been a symbol of nationalism for more than 120 years. And therefore, when we’re organizing the championships, we have to be very aware that we’re not just dealing with some baseball game; but rather with the most important spectacle that exists in Cuba, the Cuban National Championship Series (PBS, 2000).

Organization of Play. The Cuban League remains relatively unchanged since 1962. It consists of 16 teams playing a 90 game schedule, beginning in November and ending in April. The teams are divided into an east and west sector, and after the regular season, post-season play leads to the Eastern champion playing the Western champion in a best of seven series.

Each of the 16 teams in the Cuban League represents a different Cuban province, with the exception of the province of Havana City, which hosts two teams. Teams do not move, nor, for the most part, do the players, who come from the province for which they play. The regional structure to games, with players originating from the province itself, is thought to heighten interest, rivalries, and the level of play. Rucker and Bjarkman (1999: 9) note that “regional pride and socialist ideals of sportsmanship have replaced professional salaries as the driving force of championship play”.


At the end of each playoff season, government officials from the Sports Ministry select the Cuban National Team. The national team engages in international tournaments, such as the Pan Am Games, the IBA World Championships, the Intercontinental Cup, and the Olympic Games, attesting to the success of Cuba’s system of developing talented athletes.7 Cuba’s national team has won the vast majority of international baseball tournaments it has entered since the revolution. It is widely believed that Cuba has the most talented amateur players in the world, and professional teams throughout the world show intense interest in acquiring Cuban players.
In theory, the national team is comprised of the most talented Cuban players. However, team members are sometimes selected for political reasons rather than athletic performance, as players with outstanding records are not always guaranteed a place on the team (Rohter, 1997a; Jamail, 2000; Fainaru and Sánchez, 2001). Since international play outside Cuba gives players an opportunity to defect, players with “questionable” political loyalty may not be selected. With an eye on future Olympic competition, it is also frequently claimed that older players may be overlooked in favor of younger players with longer term prospects (Jamail, 2000). Commissioner Rodrίquez confirms that political factors figure into the government’s selection of the national team:
An athlete is selected to defend our country….If he doesn’t have an attitude where we…can have confidence in him, then he will never have the right to represent Cuba in an international event….On top of everything he must be patriotic, dignified, and participate like the athlete he is (Price, 2000: 109).

In evaluating the Cuban League, three issues central to the evaluation of any sports league are examined below. These are 1) the institutions governing labor markets; 2) the distribution of financial gain (if any) from the sport; and 3) the distribution of talent (competitive balance) among teams in the league.



1. Player Markets and Defections

As is true of talented athletes in many present and past socialist countries, baseball players in Cuba are developed through an extensive and highly organized player-development system run by the Sports Ministry. Talented players are identified as early as age 10, and move into one of the regional sports boarding academies that are found throughout the country.8 Here they have access to specialized trainers, facilities, and coaches. The best players eventually earn a spot on their province’s team, or in rare cases are assigned to another province’s team.9 As is true of all state workers in Cuba, changing jobs or location (team) is very difficult, and involves state approval. All players receive a salary from the state, which today generally ranges from about 250-350 pesos/month (currently $10-$15/month) (González, 2003). This pay is equivalent to that earned by the vast majority of the workforce that is likewise employed by the Cuban government. Officially, there is no difference in pay between the best and worst players, nor is there additional pay for outstanding performance. Informally, as is true throughout much of the government-controlled labor market, players (workers) identified by the government as deserving may receive additional gifts. This might include a vacation, a car, a washing machine, or smaller items like movie tickets, a restaurant meal, or a spare part for a broken television set. Renowned third baseman Omar Linares reportedly receives certain "fringe benefits" such as a Mercedes, an unlimited expense account at restaurants and hotels, plus the freedom to travel (Continental Baseball Association, 2002). However, such gifts are unpredictable, and players occasionally complain about their size (PBS, 2000; Fainaru and Sánchez, 2001).


Because of the lure of higher salaries from playing with teams abroad, such as in Japan, Italy, or other Latin American countries, government rules prohibit players from earning money by playing baseball overseas. Unless they defect, players are expected to play Cuban baseball until they are too old to play well, at which point the government reemploys them elsewhere. Within Cuba, all defectors are officially regarded as traitors, although among the general population, defecting ballplayers remain very popular and their careers are closely watched (Rohter, 1997b; Jamail, 2000; Price, 2000; Fainaru and Sánchez, 2001).
Since 1990, economic hardship has brought many changes to Cuba, including to the rules prohibiting Cubans from playing overseas. Before 1990, the Soviet Union provided Cuba with about $6 billion/year in aid (Mesa-Lago, 1998), as well as favorable commercial arrangements. Moreover, eighty percent of Cuba’s trade was with the former Soviet Block. The fall of the former Soviet Union brought tough times to Cuba. As an indication, between 1989-1993, Cuban exports fell from $5.4 billion to $1.7 billion, and GDP fell by 40 percent (Jatar-Hausmann, 1996). Exacerbating this, in 1992 the U.S. Congress passed the Cuban Democracy Act, an Act ostensibly intended to hasten Castro’s demise. The Act prohibited subsidiaries of U.S. companies from conducting business with Cuba; U.S. citizens from traveling to Cuba; and made it more difficult for Cubans in the U.S. to send remittances home. In 1996, the U.S.’s grip on Cuba tightened further with the Helms-Burton Act. This Act placed additional restrictions on foreign subsidiaries doing business in Cuba, allowed U.S. citizens to sue foreigners who make use of Cuban property supposedly still owned by U.S. citizens, and denied entry into the U.S. to such foreigners.10 For baseball, the economic difficulties wrought by these changes worked to undermine rules proscribing players from playing overseas, as discussed below.11
In 1991, René Arocha, a pitcher on Cuba’s national team, shocked Cuba by defecting to the U.S. while returning from an exhibition game in Tennessee. One prominent Cuban, baseball journalist Gilberto Dihigo, went so far as to call the first defection by Arocha a “dagger in the heart [of] the regime” (quoted in Jamail, 2000: 77). While clearly an exaggeration, this defection did publically reveal that not all players shared the official view of Cuban baseball. Two years after defecting, Arocha (playing for the St Louis Cardinals) compiled an 11-8 record with a 3.78 ERA, and earned $109,000.12 This experience confirmed to Cubans that their players could compete with the best professional baseball players in the world, could do so without retribution, and could also earn unimaginably large salaries. This knowledge, along with Cuba’s worsening economy and fervent efforts by baseball scouts to facilitate defections (Fainaru and Sánchez, 2001), led to over 80 Cuban baseball players defecting between 1991 and 2000 (PBS, 2000).
These defections during the 1990s created a political problem for the Cuban government in that visible and popular representatives of the revolution were leaving the island, often for a political system (the United States) long portrayed as vastly inferior to the Cuban system. These defections threatened to undermine the national ideology surrounding athletes, patriotism, and the status of the socialist revolution in Cuba.
In 1995, the government responded to this crisis by making a number of changes. First, it reassigned or demoted many baseball officials; second, and most significantly, it established Cubadeportes, a marketing arm of the government’s Sports Ministry. Among other things, Cubadeportes began actively seeking contracts abroad for Cuban athletes, as Cuba’s best athletes would now be allowed to “retire” early, before the natural end of their careers. These early-retired athletes (and coaches) were then allowed to play, perform, or coach overseas – with the caveat that about 80 percent of their earnings would go to the Cuban government (Jamail, 2000; Price, 2000; PBS, 2000).
The response in baseball to this new rule was immediate: during 1995, over 50 baseball players took early retirement from Cuban baseball (Rohter, 1997a), and went to play for teams throughout the world. Thirty six of these players went to Colombia’s semi-pro league, where all the league’s teams were soon managed by Cubans (Jamail, 2000). Over a three year period, about 85 baseball players retired to play abroad (Jamail, 2000: 70), and more than 1000 athletes and coaches in total left Cuba (Price, 2000: 18). The Cuban government drew significant revenue from these contracts (Baxter, 2002); although official figures are not available, Price (2000: 65) estimates the amount to be $40 million.
The ability to make more money playing baseball relieved the pressure on players to defect. But this also created another political problem: dissatisfaction from Cuban baseball fans. After winning every official international tournament in which it had played over the previous 10 years, and compiling a 152 game winning streak in the process, the Cuban national team lost the Intercontinental Cup to Japan in 1997. Moreover, fans perceived that the quality of play in the Cuban League had declined. According to Jamail (2000: 70), rightly or not fans believed that players were playing poorly so they could be allowed to retire; and they bemoaned the loss of their best players to foreign teams. In an extreme example of these losses, between 1996-98, the Havana Province team lost the first five players in its lineup to early retirement (Jamail, 2000: 70). Interest in baseball plummeted, and fans became increasingly dissatisfied with the political management of baseball. In a Cuban sports radio talkshow, the retirement controversy at times became the main topic of conversation (Jamail, 2000: 57). In 1997, attendance during the usually wildly popular championship series was very low, sometimes no more than a couple thousand fans per game (Jamail, 2000).
In 1998, after a three-year experiment, the Cuban government decided to end its “early retirement” plan. Predictably, many Cuban athletes were unhappy with this decision: early retirement “was the only way to get money, the one window of opportunity, and if they take Japan away there’s nothing. That’s the reason we felt betrayed”, complained a star Cuban pitcher who had been allowed to play in Japan (Price, 2000: 161). With the option of playing overseas gone, the pressure to defect increased, and within months Cuba’s star pitcher Adrían Hernández defected and signed a $4.4 million dollar contract with the New York Yankees (PBS, 2000). During the 2000 season alone, Cuba lost 11 more of its baseball players to defections (PBS, 2000). According to Pettavino (2004: 31), in the late 1990s defections of athletes had become so common that a Canadian newspaper held a “count the defectors” contest where readers competed by guessing how many Cubans would defect during the 1999 Pan American Games in Winnipeg.13

2. Profits: Are Cuban Players Exploited?

With a single employer, Cuban baseball players have no bargaining power in the setting of player salaries. The government is free to pay all players (and citizens since it has a virtual monopoly on the labor market) a reservation wage -- which is approximately what it does by paying everyone about $15/month.14


Are players exploited, though? Exploitation typically means that someone other than the laborer receives the value gained from work performed. In this case, the exploiter would be the government since it is the residual claimant on any revenue generated by government workers (players). Are Cuban baseball player salaries low relative to the value they generate? Jamail, a critic of the Cuban government’s restrictions on baseball players, thinks so. Commenting on why the government bans from baseball any player who it thinks is considering defecting, he writes: “…bannings were a reminder that making money off baseball was still an activity reserved for the state” (2000: 89).
The main way that Cuban baseball generates money is through ticket sales. In MLB, ticket sales are only one of many sources of revenue: significant revenue is also generated through advertising, TV and radio contracts, stadium sales (food, parking, etc), and merchandise sales. In Cuba, there is no advertising in stadia (with the exception of political advertising), nor is there any advertising on TV or radio. Very little food is sold at the stadium, and for those who drive (few do), parking is free. Items like baseball caps, jerseys, and baseball cards are almost non-existent. In short, very little money is made on baseball other than through ticket sales.
Before 1994, baseball games in Cuba were free. In 1994, economic hardship led the government to start charging admission. The price charged in 1994 is the same price charged throughout the country today: one peso (about 4 cents), or three pesos for box seats behind home plate. However, complimentary seats are frequently distributed in large quantities to select groups. If, in the most generous approximation of ticket revenue, 10,000 people pay 1 peso for each game played, ticket sales in the Cuban League would raise about 7.2 million pesos/year.
An equally rough approximation can be made of the Cuban League’s expenses. If each player makes 300 pesos/month and there are 24 players on each team, than player salaries in the Cuban League would be approximately 1.4 million pesos/year. Assume all other expenses -- staff, travel, equipment, stadia upkeep -- roughly equals the players’ salary (which is true in MLB, Fort, 2003: 275). Then in the best-case scenario of baseball revenue, players receive only about 24 percent of the net revenue (revenue net of expenses) that they generate, with the balance going to the government.15 If on the other hand, revenue estimates were reduced by 50 percent and non-salary expenses doubled – both of which may be more reasonable approximations -- then the government loses money on baseball. Certainly it lost money before it began selling tickets in 1994.
In sum, it is possible that Cuban baseball players are exploited by their government for financial gain, but if so, probably not by much – at least in terms of what a free internal market would provide them. The exception to this is in foreign contracts, where the government’s share of 80 percent (or more) of player pay is a clear case of exploitation. Indeed, the profits generated by Cuba’s elite group of athletes and coaches are in large part what now keeps Cuba’s entire sporting structure afloat (Pettavino, 2004). There is an analogy here with college football and basketball: in many universities, several dozen athletes in these two potentially lucrative sports can generate the resources for the entire athletic department. In both of these cases (Cuban baseball and college athletics), the athletes generating the resources used for building sports programs are clearly exploited.
Many baseball players in Cuba can also be seen as exploited in a different sense. The government’s prohibition against playing in foreign leagues is an instance where the government restricts players from generating their value. These rules exist not so that the government can gain some financial advantage, but rather for the government’s political gain. In this sense, many players can be thought of as exploited by their government for political rather than economic gain.
The government’s response to this characterization of its policy is twofold. First, any narrow estimate of the revenue and expenses associated with the Cuban League leaves out the entire period of player development. As previously stated, the government begins investing in players when they are as young as ten. Commenting on U.S. scouts’ continual efforts to acquire Cuban talent, Cuba’s baseball commissioner Rodrίguez says: “It’s pillaging. They come to see what they can take. But you didn’t train them. You didn’t develop them. You didn’t spend one single cent on them. Now you want to come take them? I also want them for my team” (PBS, 2000). However, for highly paid athletes, the government’s share from a foreign contract gives it many times over its investment in the athlete. Second, the government would argue that baseball in Cuba is not based, as it is the U.S., on a market ideology. The sport is managed for the good of the people, not for the individual, and player’s participation is part of the social contract Cubans have with one another. Again quoting Commissioner Rodrίquez: “Our sports is [sic] not an individual thing. It’s not a matter of winning medals. We defend values – patriotic, human” (Price, 2000: 65). The question this raises is whether the values of the government are the same as those of the governed. That many players seek to defect suggests that for some at least, the answer is no.

3. The Distribution of Talent and Competitive Balance: Does Cuba Get It Right?
A third issue in the evaluation of an organized sports league is competitive balance: how evenly is talent distributed among teams? Uneven distribution leads to less interesting match-ups and fan dissatisfaction over a perceived unfairness in competition. In MLB, a widespread belief exists that persistent competitive imbalance is undermining the sport. This issue concerned MLB enough that the owners recently commissioned a study which documented the problem of imbalance, and proposed ways to improve it (Levin et al., 2000).
In a market-driven league such as MLB’s, talent goes to the team that is most willing to pay for it; imbalance is largely a result of differences among the teams in their willingness to pay for talent – which is usually determined by market size. In Cuba, talent is distributed (with some caveats, discussed below) according to the players’ origin. Thus, one might reasonably expect that teams drawing from a larger population would have better players and compile better records. This proposition is examined below.
There are a number of ways to measure competitive balance within a sports league. A simple and common method is to calculate the standard deviation – a measure of spread—in team records. One can then compare this with the expected standard deviation if all teams were equally talented so that the results of any matchup were equivalent to the flip of a coin. This is called the “ideal” standard deviation. The ratio (actual standard deviation)/(ideal standard deviation) provides a measure of competitive balance. For example, if the actual measured standard deviation of winning percentages in a league is .09 while the ideal standard deviation is .06, then the ratio of the two is 1.5.16 This ratio indicates that the spread in league winning records is 50 percent higher than predicted if all teams in the league were equally talented. A higher ratio thus implies greater imbalance (wins are more concentrated with certain teams), a lower ratio better balance (wins more evenly spread across all teams).
Quirk and Fort (1997) use this measure to compare competitive balance across time and across professional sports in the US. Based on annual winning percentages, they find that in MLB this measure of balance has averaged around 2 over the last 50 years, although over the last 25 years this indicator of balance has declined to approximately 1.7. Other professional sports leagues in the US show a similar level of competitive imbalance (Quirk and Fort, 1997).
Table 1 Here
Table 1 shows this competitive balance indicator for the Cuban League over the period 1978-2002. The first column is the indicator based on teams’ annual winning percentage. This indicator has averaged 2.08 over the 25 year period, revealing that play in the Cuban League is historically more imbalanced than MLB. Figure 1 compares competitive balance between the Cuban League, the American League, and the National League over the same 25 years (1978-2002), and reveals that in most years, the Cuban League was more imbalanced than either of MLB’s leagues.
Figure 1 Here
Column 2 in Table 1 presents competitive balance indicators based on the previous 5-year accumulated winning record of each team. By this measure, league play in Cuba is much more imbalanced, as the spread in team winning percentages is almost four times larger than expected if the league had been comprised of teams with an equal chance of winning. This shows that in the Cuban League, teams that win (lose) in one year tend to also win (lose) is subsequent years – something characteristic of professional leagues in the US as well (Quirk and Fort, 1997).
Figure 2 Here
Figure 2 graphically shows trends in competitive balance in the Cuban League, based on both annual and 5 year records. Annual measures of competitive balance reveal no obvious trend, but balance based on the past 5 years of play reveals that balance worsened during the 1980s, but has steadily improved over the last decade, dropping from a high of 4.6 in 1992 to 3.6 in 2002. It may be that defections and early retirements over the last decade have improved balance in the Cuban League. Anecdotally, baseball powerhouses -- notably the Havana Industriales – have lost their best stars over the last decade. In the case of the Industriales, during the 1990s they lost Rey Ordóñez (New York Mets), Livan Hernández (Florida Marlins), and Orlando Hernández (New York Yankees) to defection, and several others to retirement overseas. During the first half of the 1990s, the Industriales compiled a winning record of .678; during the second half its winning record was .566. The opposite trend is evident in a number of the weaker teams; for example, Guantanamo improved its record from .330 in the first half of the 1990s, to .444 during the second half. While likely of little consolation to fans, it appears that defections and early retirements at least have improved the prospects of the weaker league teams.
Table 2 Here
Finally, Table 2 shows the cumulative W/L record over the past 25 years of the 16 teams currently playing in the Cuban League. Pinar del Rίo has been a perpetual winner, winning 67 percent of its 1559 games, while Las Tunas has won just 35 percent of its 1561 games. Examining cumulative winning records in the Cuban League reveals a league more imbalanced than MLB’s leagues. For example, between 1978-2002, in the American League the Yankees have compiled the most wins (.557) and Minnesota the fewest (.471). In the National League, Atlanta has won the most games (.525) while the Chicago Cubs have won the fewest (.471). As suggested by evidence in Table 2, the spread in cumulative winning records over the last 25 years is significantly smaller in MLB than it is in the Cuban League.
The last column in Table 2 indicates the percent of the Cuban population in 1990 living in the region that each team represents. This can be used to approximate the relative size of the pool from which each team’s players are drawn. The correlation between teams’ accumulated winning percent and its region’s population is .65; this means that 65 percent of the differences among team’s winning records can be explained by the size of the region’s population. Thus, market size in Cuba seems to even more important determinant of team quality in Cuba than it is in the United States.17
While players for the most part play for their province, the government does occasionally reallocate players according to its own criteria. According to one baseball official, this criterion is the need for talent (González, 2003). However, this explanation is at odds with the example of the two teams from the city of Havana. Havana’s two teams are the Metropolitanos and the Industriales. Players on the former team are presumably drawn from the city center, while Industriales players come from the more industrial areas on the outskirts of the city. According to Price (2000), it is widely perceived that the real purpose of the Metropolitanos is to serve as a staging ground for players, where those who prove themselves are transferred over to the extremely popular Industriales team.18 Before the 1997 season, for example, five players and the manager transferred from the Metropolitanos to the Industriales team (Price, 2000), despite the fact that the Industriales had a better winning record. Since 1978, the Industriales have compiled a winning record in each season they have played but one; yet the Metropolitanos typically play around .500 (see Table 2). If one excludes the Metropolitanos, the correlation between population size and cumulative winning percent discussed above increases from .65 to .72.
In sum, competitive balance in the Cuban League appears to be no better, and probably worse, than competitive balance in MLB. Imbalance in MLB is largely a result of differences in the market size that teams operate in. Ironically, Cuban baseball confronts the same problem. In the case of MLB, differences in market size means that some teams are willing to pay to obtain the best talent, while teams in small markets are not. In the case of Cuba, market size does not influence the amount of revenue that top talent generates, but rather influences the size of the labor pool from which the talent is drawn. Yet in both cases, the resulting distribution of talent is unbalanced – and is more so in the case of Cuba. To the extent that the Cuban government allows some mobility of players, it does not appear to be the case that these decisions are made so as to improve the distribution of talent. The evidence also suggests that defections may be improving competitive balance.


C. Discussion and Concluding Remarks


In many respects, Cuban baseball (and athletics in general) under Castro can be seen as a great success, as its achievements in international competition are remarkable. These successes have come about through extensive government regulation, most notably through public investments in player development, in strict control over both the labor markets and the gains generated therein. This is in stark contrast with baseball in the U.S. and elsewhere, where market forces play a central role in determining the development of talent, the allocation of talent, and the distribution of baseball’s gains.19


The rules governing the organization and finances of baseball in Cuba are clearly quite different from those governing organized baseball most anywhere else. Just as in the U.S., however, an understanding of these rules helps explain the observed outcomes on the field. Cuba’s high level of talent and consistency of team composition is ensured through, on the one hand, stifling individual freedom, and on the other, a loss of political legitimacy as too strict of control over the labor market fosters defections. The conflict between Cuba’s ideology and the quality of its baseball has led the Cuban government to attempt striking a balance between the official egalitarian rhetoric and the easing of restrictions on player compensation so as to reduce defections. The dilemma is that the regulation of baseball for ideological purposes places a very high cost on those from whom the government most wants support.
For the time being, defections, the fear of continued defections, and the government’s continuing need for hard currency has led the government to once again compromise its commitment to egalitarian ideals and a sports ideology that exalts amateur athletes. After bringing the practice to a halt in 1998, the Cuban government has once again begun negotiating contracts with foreign teams. In 2002, it negotiated contracts with Japanese teams for Cuba’s five top baseball players (Associated Press, 2002)– the most famous of the five being Omar Linares and Germán Mesa.20 In his first year in Japan, Omar Linares’ contract provided him with $12,000 (Continental Baseball Association, 2002). The Cuban government’s share of the contract was not made public, but top stars in Japanese baseball – and the expectation was that Linares would become one -- easily make over $1 million/year.21 One source reports that baseball salaries in Japan currently average $270,000.22 In all likelihood, the Cuban government received significantly more than 80 percent of Linares’ earnings. While it is less clear if the average Cuban player is exploited, those who are able to play overseas are clearly exploited by the Cuban government.
Ironically, in terms of competitive balance on the field, the government’s control over player mobility does little to help smaller provinces compete with larger provinces. In fact, it may do just the opposite as unlike in the U.S., smaller regions in Cuba have little ability to field a winning team, no matter how much they might want one. What sounds ideal – player immobility – in fact may be bad for fairness on the field. This is a lesson that many have also drawn from MLB’s old reserve system that tied players to teams (Butler,1995; Fort, 2003; Maxcy, 2002; Rottenberg, 1956).
In Cuban baseball today, government policy continues the pursuit of an organization structure based on egalitarian and amateur values. This pursuit is increasingly in conflict with both the economic incentives facing players, and the economic incentives facing the government to capture the value players can generate abroad. How the government manages these three competing forces – ideology, the threat of defection, and economic expediency – will likely be determined by the government’s assessment of the importance of each to maintaining its power. The dilemma facing the Cuban government in its management of these forces in baseball is in many ways also emblematic of its larger problem of maintaining political control in the face of adverse economic changes.23
With respect to the applicability of the Cuban case to the optimal way to organize a sports league, the Cuban case points out that markets fail to perform for the public interest insofar as an alternative system would do better. A case study of Cuba does not offer a definitive answer – yes or no – to the question of whether government regulation can improve on market outcomes. Rather, it is illustrative of the often unintended results that are associated with government regulation of any market. That government regulation of sports markets is superior to the use of market forces, as suggested by (among others) Richards (2003), is an argument that still needs to be made.


1ENDNOTES
Referring to the period after the defection of Liván Hernández, Fainaru and Sánchez (2001: 224) write: “the words Cuban ballplayer….were enough to cause sober-minded baseball scouts to travel to the ends of the earth on a moment’s notice”. Since its revolution, Cuba’s phenomenal success in sports has included many more sports than just baseball. For a superb discussion of the Cuban sports system, see Pettavino and Pye (1994).

2For a popular account of the woes facing MLB, and proposals to remedy them, see Costas (2000). For a similar analysis (financed by MLB), see Levin et. al. (2000).

3See “Havana Cubans and Cuban Sugar Kings” at http://www.cubanball.com/minorlg.html.

4In a 1962 speech to Cuban athletes, PBS’s (2000) transcript of that speech reports Castro as saying about socialist baseball in Cuba: "ballplayers are no longer bought and sold; there are no longer any enterprises which monopolize athletes and which can buy and sell an athlete as if he were a race horse. An athlete is no longer bet on as if he were a pedigreed rooster, a horse, or a dog."

5In contrast, see Guillermoprieto’s (2004) personal account of Cuba’s attempt around 1970 to develop modern dance.

6Castro has long been keen on organizing a matchup between a Cuban and MLB team (Pettavino and Pye, 1994: 184). This finally occurred in 1999 when the Baltimore Orioles played two games against Cuba’s national team. They split the series.

7In the 2000 Sydney Olympics, Cuba placed a remarkable ninth overall in terms of total medals earned (Pettavino, 2004).

8The system currently includes 15 schools for sports instruction, 14 schools for superior athletic refinement, 162 sports academies, and two Centers for High Performance located in Havana (Pettavino, 2004).

9In 2003, for example, the Cienfuegos team included three players from other provinces (González, 2003).

10These two acts strengthened policy (commonly referred to as The Embargo) dating to
1962 that prohibited the sale of all goods to Cuba originating in the U.S.. In 2001, Cuban wages remained about 40 percent (and GDP about 20 percent) below their 1989 levels (Mesa-Lago, 2001).

11In fact, the economic hardship of the 1990s brought many instances of market liberalization, as discussed in Jater-Hausmann (1996).

12See http://www.baseballlibrary.com/baseballlibrary/teams/1993cardinals.stm.

13The exodus during the 1990s has not been limited to ballplayers. According to Pedraza (2002), about 25,000 Cubans are year are leaving the islands.

14A reservation wage is the lowest wage for which a worker will accept work.

151.4 million/(7.2million-1.4 million)=24 percent.

16An actual standard deviation of .09 approximately means that the winning record of about 2/3 of the teams in the league is between .410 and .590 (.500 +/- .09).

17Here, the term “market size” is used differently for MLB and the Cuban League, although both can be approximated by the size of population within the vicinity of each team. In Cuba, the market that differs for each team and that determines the distribution of player talent is the player market; in the US, each MLB team faces the same player market, since it is a national market. What market matters for the acquisition of talent in MLB is the consumer market, and it is this that differs for each team.

18The Metropolitanos in fact seem to be a team without a fan base: whereas Industriales games are well attended and broadcast on the radio, neither is true for Metropolitanos games (Price, 2000).

19The government’s role in U.S. baseball (the financing of stadia and the inapplicability of antitrust laws in particular) is certainly crucial in understanding baseball outcomes in the U.S.. With this important caveat, market forces do explain most of what happens in MLB.

20Long considered the best baseball player in Cuba -- and perhaps one of the best in the world --Lineras reportedly was once offered $40 million by MLB to defect (CBA, 2002). Mesa is one of numerous star players who have at one time or another been banned from Cuban baseball for allegedly considering defection; he is currently coach ing baseball in Japan (Associated Press, 2002).

21See http://japanesebaseball.com/players/index.jsp.

22See http://www.baseballguru.com/ggarland/analysisggarlandpreviousmay132002.html.

23See Corrales (2002) for greater discussion on the government’s responses since 1990 to conflicting state interests.


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