September 21, 2004

Is the NFL Socialist?

Every year, either at the start of the season, or at the Superbowl, the same question gets asked. Is the NFL Socialist? The Wall Street Journal today(sorry, no link) had yet another article about whether or not the NFL is a socialist institution, and how salary caps, revenue sharing, etc. are socialist in nature. The reality, of course, is not whether the NFL is socialist or capitalist, but is each team in the NFL competing with each other, or is the NFL as a whole competing against other sports.

Unlike Baseball, Football has to compete with other sports for viewers all season long. In the early part of the season, NFL competes with baseball. In the late part of the season, NFL competes with basketball and hockey. The NFL also competes indirectly with college football for the entire season. If the Giants and Yankees are playing at the same time, or the BoSox/Patriots are playing, fans may be more likely to watch the baseball game over the football game, especially if the baseball team is in a pennant race. Baseball is the only major sport playing during July and August.

So, if Football has to compete with other sports during its entire season, how does the NFL create a competitive advantage, where all teams can benefit? The answer: create a league where no team is wildly dominant over any other team, and where even last-place teams have the capability to beat first place teams. This is what makes the NFL much different than baseball or the NBA. The NFL figures correctly that all teams will do better if they can configure the league so that every game is a nailbiter, and blowouts are rare. This gives the NFL a unique advantage in terms of viewership. The closer the game, the less likely it is that someone will turn the channel to watch something else.

Anyone who makes the spurious claim that the NFL is socialist is ignoring the fact that the NFL competes with other sports for TV contracts, ticket sales, and merchandise. For example, the Patriots may play against the Jets at the Meadowlands, but the Jets are competing with the Yankees in New York, and the Patriots are competing against the Red Sox in Boston. That makes the NFL a capitalist institution, and people who claim otherwise don't understand the nature of how professional sports make money.

Posted by John Bono at September 21, 2004 01:11 AM| Link Cosmos

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