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Business & Economics

November 28, 2008

The NFL Should Be More Like NASCAR

In a manifesto for sports fans, two professors call for more merit and less monopoly.


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When I was growing up in the San Francisco Bay Area in the 1980s, you could go to an Oakland A’s game for next to nothing. And though the Oakland Coliseum at that time was not Ebbets Field, I can, to a limit, understand the nostalgia with which people remember the Brooklyn Dodgers. It was a time and place where the admission was cheap and the players were more or less accessible.

It doesn’t take much to see that sport spectatorship and sports stars have changed dramatically in the past two decades: Phil Mickelson wants to play more in Europe next year because the dollar is “stagnant”; The New York Knicks still have some of the highest ticket prices in basketball, even though they haven’t had a winning season their 2000-01 campaign; and ESPN — part news source, part broadcaster of games and one long sports advertisement where athletes and sportscasters make commercials together — has completely destroyed the illusion that there is a line that separates sport and commerce.

Rooting for the small-market, low-payroll Tampa Bay Rays in the recent World Series seemed like a bit of resistance, even though rooting for the Rays was rooting for the pup among the same breed of big dogs.

Never before has the act of supporting a sports team, or even watching a game on TV, felt more like lining someone’s pocket. Most of us realize that nostalgia is blood sport. We don’t want to go back to Brooklyn in the ’40s and ’50s or Oakland in the ’80s. After all, Mark McGwire and Jose Canseco, who have come to represent everything that has recently gone wrong in baseball, were Oakland rookies in the mid-80s. We want a way forward.

In Fans of the World, Unite!: A (Capitalist) Manifesto for Sports Consumers, Stephen Ross and Stefan Szymanski provide a cogent, well-argued way ahead for fixing some of the woes experienced by the everyday sports fan.

As the title suggests, the authors’ primary concern is with the health of the American sports consumer, whom they feel is exploited in a number of ways by the four major sports leagues in America: Major League Baseball, the National Basketball Association, the National Football League and the National Hockey League. Taxpayers often end up footing a large part of the bill in building new stadiums; television blackouts and high-priced league-wide TV packages force consumers to pay to watch games; the leagues tolerate mismanagement by allowing teams lifelong membership into the league; and the centralized structure of the leagues leads to mishandling of licensing and overall mismanagement.

To remedy some of these ills, Ross and Syzmanski suggest a two-part solution. “Sports leagues should be restructured to vest control in a for-profit commercial enterprise that is separate and distinct from the owners of clubs participating in the competition, and participation in each sport’s major league should be based on merit, demonstrated best by performance in the prior season.”

The first solution is best understood through an example. In 2001, the Committee of Management at the Wimbledon Championship offered a wild-card spot to Goran Ivanisevic, who in previous years had three second-place finishes on the grass courts. The tournament is open to players based on world rankings, and in 2001, Ivanisevic had fallen far down the ranks due to injuries. Based on his previous finishes, Ivanisevic was given the wild-card spot. He took great advantage of the gift, and beat Patrick Rafter in the final.

“Now imagine if the players themselves decided on the entry by majority vote,” Ross and Syzmanski write. “Would they ever offer a wild-card place? Maybe they would, but only if the majority felt confident that it had a better chance of beating the wild-card player then the alternative. With his strong record at Wimbledon, Ivanisevic would have been unlikely to command such a majority.”

But this “entry by majority vote” is precisely what is happening with the major sports leagues in America. The governing bodies that set policies and rules are composed of team owners. This allows them to make decisions about what is best for on-field competition and their own financial gains. This creates a conflict of interest that is ultimately bad for both the game and the consumer.

The authors are well aware of their location in the academy (Ross teaches at Penn State and directs its Institute for Sports Law, Policy, and Research, while Syzmanski is at London’s Cass Business School), and thus go to great lengths to demonstrate that theirs are real-world solutions. They use the case of NASCAR as an example of how a governing, for-profit body that is separate from the owners doesn’t mean that either profits or competitiveness will suffer. On the contrary, NASCAR has thrived and become America’s fastest-growing sport.

In many ways, their second solution is even more beneficial to the consumer. The importance of entry into a major league based on past performance will be evident to anyone who has seen or attended a game late in a season where the outcome has no baring. The play is lackluster and the fans are uninterested. There is, in other words, no competitive heat in the game. The system as it works now rewards the poor performing team by placing them that much closer to drafting the big prize the following year.

European soccer provides an example of an alternate model. A team’s presence in the English Premier League from one year to the next is based on performance. A last place in the standings means that even a powerhouse like Manchester United could conceivably be demoted to a second-tier league. With entry by merit, the teams are forced to manage at a high level, lest they lose great financial gains. And the games played at the bottom of the rankings have the same competitive spirit as teams fighting for a championship. There is nothing like elimination to get the hearts of players and spectators pumping.

Ross and Syzmanski are well aware that these changes would mean a wholesale restructuring of the major leagues, which will not happen immediately. And so in the interim, they suggest some “half-loaf” ideas for change that involve giving more power to the commissioner of a league, following the model of Bill France in NASCAR and the late Pete Rozelle of the NFL, to make long-term decisions based on the needs of the league and the needs of the consumer and less so on the needs of an individual team.

Ross and Syzmanski’s solutions are not going to make certain athletes less smug, make ticket prices significantly lower or slow down the ESPN juggernaut. But what it will do is shake up the major leagues’ monopoly power and force teams to work harder at earning the consumer’s rapidly stagnating and elusive dollar.

 

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