The NFL’s Parity

The playoffs and the march to the Super Bowl has begun. Fame and glory awaits the winners. In terms of finances, it is amazing to learn a strong playoff run has a minimal impact on a team’s bottom line because the NFL’s business model is based on socialist principles.

Collective Security

No lie. This is not a story for the Onion.  As the players sacrifice their short-term and long-term health for their contracts and the Lombardi Trophy, the billionaire owners have crafted a business model like central planners. Their plan regulates the distribution of income to guarantee them riches regardless of their teams’ performance on the field.  

The fix is in. Years ago, the owners agreed the league couldn’t survive unless every team shared equally in the spoils. They determined the fans didn’t want to watch lopsided games or cheer for a team going 3-11. They didn’t want a few super teams trouncing the competition year in year out. Parity is what they wanted even though parity is a bad word to capitalists.

It seems once one is RichAF capitalism doesn’t matter. It’s time to work together. So, the collective strength of the NFL props up the lesser franchises. The team with the worst record, not the best record, receives the first pick in the college draft. The weak teams are not scorned. They remain members of their gentlemen’s club.

How Much Is Enough

How is this done? All the “national” revenues generated by the league are placed into one pot that is equally distributed to each club. This not only includes the TV contract which is a monstrous ten year deal worth $321B but also licensing fees along with a portion of each teams’ ticket sales, merchandising, concessions and parking revenues. 

Riches must await the teams that make the playoffs. Nope. Every team shares equally in all the revenues generated in the playoffs. The home teams of playoff games do, however, keep their concession and parking receipts. Clearly an extra million or two dollars is meaningless if one already has a billion.

Open Secret

Forbes, The Atlantic and other reputable magazines periodically report this story. Deft marketing that wraps the league around the flag keeps the fans from digesting the truth.

The game day pageantry which includes honor guards and the singing of the national anthem links the game to patriotism. In turn, the symbolism connects the game to support of the troops. Militaristic jargon like blitz, bomb, pistol, air attack, shotgun, ground game and formation peppers the broadcast and reinforces the patriotic sensations.

Religion even seeps into the messaging with “Hail Mary” taking on a new meaning thanks to Dallas Cowboys Hall of Famer/Navy graduate Roger Staubach. The leap from patriotism to capitalism is not a stretch. Subsequently, the league’s socialistic roots are obfuscated. Thank you for your service Aaron Rodgers. 

Tell a fan that the NFL operates on a socialist business model and the reply is, “You are misinformed. Come on, the players are the strongest, swiftest and most courageous in the land. They’re paid really, really well for their performance. That’s not socialism.” 

Worker Solidarity

Such thinking misses the point. The players are the workers. Of course, they have to fight to get their money. Subsequently, they are represented by the NFLPA, one of the strongest unions (socialistic) in the country. The unity of the players and their commitment to fight for the rights of everyone is why 48% of the NFL’s revenues are allocated to the them.

Moreover, as stated earlier, the owners call the shots. Their interests are protected. The worst team in the league will always get their 1/32nd cut of all the league’s revenues. This is why the Washington Football Team (WFT), one of the most dysfunctional franchises in the league, is still the NFL’s 5th most valuable franchise. In spite of a 142-191 record over the past twenty-one years and lowest attendance of all the league, the WFT is worth $4.2B.

Capitalistic Spain?

Spain, Italy and France are generally labeled as socialistic but their futbol (soccer) is capitalistic. For example, La Liga, Spain’s top soccer division, gives each of the twenty teams an equal allocation of 50% of the television money. The remaining half is divided in two equal parts and distributed based on sporting results over the past five seasons and “social influence”, which includes the number of fans. To the victor goes more spoils.

As with any capitalistic system, the higher the risks, the greater the rewards. In La Liga, the three worst teams are relegated to the Segunda Division. The top two teams in the Segunda Division and the winner of a playoff are promoted to La Liga. This makes for gut wrenching season ending drama for the fans of teams on the verge of relegation or promotion. No tanking or load management for these teams. Every game counts so the integrity of the games is never called into question.

Super Teams

The distribution of TV revenues in La Liga ranges from €158M for La Liga Champion and €48.5M for the bottom dweller.  This revenue chasm has made for super teams just as the precinct NFL owners feared. In the past twenty-two years, only five teams have won the La Liga Championship: Barcelona has won ten while Real Madrid has won seven. The success of these Super teams comes at the expense of the rest of the league. Conversely, thirteen different teams have won Super Bowls during the same time span and the league’s profitability and fan interest has never been better. 

This picture makes it easy to conclude maybe Socialism isn’t such a bad word. 

Perhaps, the cooperation among the NFL owners should be more clearly articulated to the public. Could America’s game become a new symbol for America’s capitalism? The point of the matter is capitalism needs a reboot. A look at the NFL could help open conversations to speak more civilly about fiscal policies.