True to form, US President Donald Trump has found a way to try and monetise the war he launched against Iran. Trump is proposing to slap a 20% fee on all cargo that sails through the Strait of Hormuz under US warship protection. The Bloomberg news service has estimated that a 20% charge for a fully loaded oil tanker would come to a total fee of around $US32 million.
If enacted, that US fee would be roughly sixteen times greater than the $2 million per ship that Iran has extracted, a toll previously denounced by the US as being illegal under international law. Leave aside that there is no information on how this US fee-for-service toll would be administered, or how many shipping companies (if any) would pay to run the gauntlet in the Strait etc etc. Keep in mind though, that Trump’s proposed protection racket is being run by the self-same people whose rash actions brought war to a crucial waterway that – previously – was entirely free to transit.
The wider economic logic of the US proposal also seems very, very weird. As with the Trump trade tariffs, those 20%-per-cargo fees would be directly passed onto motorists at the pump, raising fuel prices again and boosting inflation just when Trump has been surging the Federal Reserve to lower US interest rates before the midterm elections. Yet at the exact same time, Trump is giving the Fed new and better reasons to raise them.
Footnote: Meanwhile, ICE agents keep on killing US citizens. Last week, it was an unarmed Mexican construction worker in Houston, Texas. This week, it was a person in Maine – reportedly a Colombian man – who was trying to drive away from a residence where someone else had recently been issued with a deportation order.
Independent Maine Senator Angus King told reporters at the US Capitol that Homeland Security Secretary Markwayne Mullin told him that the person killed was not the intended target of the operation…
Nine US citizens in all, have been by ICE agents so far. Apparently, Americans need to find a way to defend themselves from a government that poses a lethal threat to humanity, at home and abroad.
Professional sport v strong unions
We’re living in the era of professional sport, which is the pinnacle of capitalism, right? Sport is big business, and a virtual religion for hundreds of millions of people. Yet interestingly, the workplaces of professional sport do not follow the neo-liberal model of labour relations that has dominated political life in New Zealand for the past 40 years.
The evidence is quite clear on this point. In those elite sports where (a) management powers are centralised, and (b) players have been able to negotiate collective agreements, the players enjoy higher pay and better playing conditions. In sport as in life, it pays to have a strong union. It does not pay to be an independent contractor.
With the significant exception of tennis, the general rule is one of centralised governing bodies (and subsidiaries) with whom the terms, conditions and prize money packages are negotiated with union groups representing the players. Think of the ICB for cricket, FIFA for football, the NFL for American (gridiron) football, the NBA for US men’s basketball, the WNBA for US women’s basketball, the PGA for golf. (In golf, the US Masters at Augusta is the only owner-operated major tournament. Check out the extensive pattern of player remuneration in the NFL, from top to bottom.
By contrast, the headlines about the prize money up for grabs at the recent Wimbledon tournament only serve to disguise the lopsided nature of the prize money packages, and the archaic fashion in which the sport is managed – not to mention how badly the game’s administrators look after the physical and mental wellbeing of the players.
By my count, there are seven different bodies administering top tennis. For starters, each of the four grand slams are owner-operated events that separately run their tournaments, and negotiate the prize money and broadcast rights. Then there are the two tours (ATP for men and WTA for women) that organise the rest of the tour and calculate the weekly rankings that dictate access to the big tournaments where the big money can be made.
Sitting awkwardly alongside all of this is the International Tennis Federation (ITF) aka World Tennis – which sets and regulates the rules of the game, and runs international tournaments like the Davis Cup, the Billie Jean King Cup, and the Olympics and Paralympic tennis. Supposedly, the ITA also supports the grassroots development of the sport, globally.
Given this seven-headed structure, it is uniquely difficult for the players to get a fair share of the earnings from the tour and the Grand Slams, or to bargain successfully to reduce the endless tennis season. The greed of the organising bodies dictates that players must be available to compete for eleven months of the year. This is taking a heavy toll of the players in recurring injuries and burnouts. The wrist injury that has sidelined Carlos Alcaraz this year is merely one symptom of the structural malaise in Big Tennis.
Life as an “independent” contractor
Imagine for a moment that the All Blacks were independent contractors, in the same way as they are in tennis. Each player in the squad would be responsible for paying for their own coach, their own physio, their own dietitian etc. In addition, they would each have to arrange and pay for the travel, accommodation, meals etc for themselves and their backup team over the course of the tournaments, and whilst in training. An All Black has none of those costly responsibilities.
This explains why – once you get to the spots 50 on downwards in the rankings, top tennis players are barely breaking even. The difference is not because tennis is played by individuals. Golf is not a team game either. Good caddies may be expensive, but Big Golf is far more centrally organised than Big Tennis, on both sides of the bargaining table.
True, no one needs to be shedding tears for the earnings of the Top Ten tennis players. Jannik Sinner, Carlos Alcaraz, Novak Djokovic etc have been estimated to be each making circa $80-100 million a year, with the bulk of that income coming from their product sponsorship deals. Reportedly, Roger Federer has made more money in retirement from product endorsements than he ever did as a player. Via the same sort of sponsorship deals, the highest earning female player – Coco Gauff – is estimated to be taking home about $30 million a year.
During the past year, a coalition of top tennis players – Sinner, Alcaraz, Gauff, Aryna Sabalenka, Iga Swiatek etc – has been pushing back and seeking (for rank and file players as well) a bigger share of the earnings generated by the sport. They have also been calling for a less punishing annual schedule.
So far, these calls for change have mainly been directed at each of the owner-operators of the Grand Slams. This year, player pressure meant that the pool of prize money for the Australian Open was increased, especially for the winners. Even so, it is estimated – and there’s a useful breakdown here – that the players share (overall) only 20% of the gross revenues generated by the Australian Open.
This is par for the course. The average player share of each of the four Slams revenues is reportedly between 15-20%. Again it was only after player pressure that Wimbledon increased its prize money this year. At the French Open this year, it took a threat by Sinner and Sabalenka to curtail their media obligations to get the French tennis federation to enter into negotiations on pay, and on issues to do with player well-being.
At home
The All Blacks share of overall revenue is low, compared to the top US sports. As the American Prospect magazine reported last year:
Thanks to their collective-bargaining agreements, major league baseball players make roughly 47 percent of total league revenues [My emphasis] NFL players make approximately 48 percent, and NHL and NBA players make 50 percent.
Again, effective unionisation seems to be the lever for achieving a fairer pay outcome. Not that effective unionisation has been easy to achieve. “Independent” contractors can be readily pressured into compliance, and/or replaced. Given the turnover rate of star players, it has been hard for sports unions to win (especially for rank-and-file players) a fairer share of the massive profits that these sports generate, annually.
Not surprisingly, gender also plays a part. In the last two years, US women’s basketball has had to take industrial action to lift its share of the game’s gross revenues above a paltry 9%. In the last pay round, the WNBA governing body was offering 15%. It took the threat of strike action by the players to push the final pay agreement up to 20%.
So how do the All Blacks fare by comparison? Not particularly well. The All Blacks collective agreement for the three year period between 2026 and the end of 2028 offers them 36.56% of a stream of “ player-generated revenue” (i.e. broadcasting and sponsorship income) for the years 2026-2028. This narrowly construed share is not calculated against the gross revenues amassed by New Zealand Rugby, as it is in the NBA and NFL. Meaning: when compared to the collective bargaining position of their male counterparts in US professional sports, the All Blacks have solid grounds for demanding a more comprehensive, more rewarding pay deal the next time around.
To repeat: the template for labour relations in professional sport is the opposite to the one being pursued across the wider economy by the coalition government. (The ACT Party in particular, strongly supports the power imbalance that’s enshrined in the individual contractor model.) However, professional sport and the outcomes for its players/workers serve to illustrate the personal costs and the heightened risks of independent contracting, and the benefits of collective bargaining power.
So…if we really want to treat our sporting heroes as role models, the message should be loud and clear: join the union, and make it strong!
Footnote: Taxpayers and ratepayers deserve a better deal, too. All around the Western world, cities spend hundreds of millions to subsidise the building of sports stadiums for what are supposed to be “professional” sporting codes, while many people in the streets adjacent to these temples of sport go begging. Literally.