Home > Uncategorized > My rebuttal to NKS

My rebuttal to NKS

My friend Neil wrote an interesting post at HufPo. (He got a tweet from Around the Horn!)

I vehemently disagreed, so in typical BDK fashion I wrote a verbose and dickish response. It’s fun because its about football and economics, two areas we usually agree on but occasionally scuffle rhetorically.

So my two readers! Here’s my response verbatim (I promise you I have really have nothing better to do):

Nice Neil, unfortunately I will have to disagree wholeheartedly that the NFL needs the government to help them with anything. If you look at the programs government has helped to run or actually managed (DMV, Post Office, Bailout plan), you see a pattern of bureaucratic ineptitude similarly found in a certain Buffalo Bills football team.

To keep it simple I will address your contentions in the order you gave them:
1) Why monopoly in sports?
-You are correct in that its necessary to maintain a competitive landscape. The NFL needs to have monopolistic power in order to “increase competition”. Now this sounds inherently contradictory but this is the reason why government permits this action. The NFL provides organizational substance (common rules, regulations, refs, schedules) Simple, but there’s more

By collectivizing its 32 teams, the NFL increases the competitive product on the field. If we expose the NFL to more open markets, the very issue you described with the Skins/Boys would erupt. Roger Goodell isn’t dumb though, he knows his sport is the most successful in America because of this competitive balance. Although the case you describe might occur, the last thing Goodell wants is another MLB where low-cap teams have no shot of the world win. You notice this with the myriad and unique rules the NFL does to ensure this (salary cap, revenue sharing, unguaranteed contracts etc.) Perhaps Roger will say screw it and allow the NFL to go the way of the MLB. At the end of the day, it is his choice and I would argue there would be deep disincentives for him to go such a route. The late great Wellington Mara (owner of the esteemed NY Giants, a team in the largest NFL market) saw this and knew for the betterment of the sport as w2) Monopsony power
Again, I agree with your facts but don’t find your conclusions accurate. You write:

Monopsony power gives the NFL ownership an unfair institutional advantage when negotiating with the players union. The government can correct this imbalance.

Besides the fact that the only thing the government seems to do well is double-charge me for my DC speeding tickets (Who the hell put those cameras up there?!) lets keep it simple. You are indeed correct that the NFL holds increased power as the unique seller of goods. But you contradict yourself when you mention players unions; which by definition are a form of a cartel. If you wiki cartel, you’ll notice that they hold similar economic powers to monopolistic firms (hence anti-trust). The union although not a perfect force, offers a countervailing force to the otherwise juggernaut-like power of the NFL. Thus this tit-for-tat, rhetorical game the NFL and its union are playing is actually the best way to resolve this dispute. Sure it might suck in the short-run (lockouts) but I find government intervention infinitely more frightening. As for an example, I would point to the NCAA and the fact that its players don’t have a union as a better example of ACTUAL inequity. Talented players and athletes, literally exploited by schools to run and perform in front of paying audiences, who don’t get a dime for doing so. Perhaps a clever writer can attack that injustice someday =)

-Lets take a look at what happens if you don’t allow monopolies in sports: Boxing. While you could attribute some of the equity loss in boxing to UFC (the demand for watching savage beatdowns in one form or another could be considered relatively elastic) I will also argue its because there is no head organization (WBA, WBC, IBO, WBO, IBF?) that fully controls the reins. That is why you sometimes have 4 “championship” boxers, boxers who have no incentive to fight each other (Klitschko brothers etc.) and where only the biggest brand names win tons of cash and lot of others are left to toil in a fading sport.

2) Monopsony power
Again, I agree with your facts but don’t find your conclusions accurate. You write:

Monopsony power gives the NFL ownership an unfair institutional advantage when negotiating with the players union. The government can correct this imbalance.

Besides the fact that the only thing the government seems to do well is double-charge me for my DC speeding tickets (Who the hell put those cameras up there?!) lets keep it simple. You are indeed correct that the NFL holds increased power as the unique seller of goods. But you contradict yourself when you mention players unions; which by definition are a form of a cartel. If you wiki cartel, you’ll notice that they hold similar economic powers to monopolistic firms (hence anti-trust). The union although not a perfect force, offers a countervailing force to the otherwise juggernaut-like power of the NFL. Thus this tit-for-tat, rhetorical game the NFL and its union are playing is actually the best way to resolve this dispute. Sure it might suck in the short-run (lockouts) but I find government intervention infinitely more frightening. As for an example, I would point to the NCAA and the fact that its players don’t have a union as a better example of ACTUAL inequity. Talented players and athletes, literally exploited by schools to run and perform in front of paying audiences, who don’t get a dime for doing so. Perhaps a clever writer can attack that injustice someday =)

3) Taxpayer involvement
If taxpayer subsidization is your real concern, the way you address that is not to give owners tax breaks and then punish him for using them (much like this bailout/tax). Only a psychotic pet owner would leave a treat on the ground for his dog and then consequently punish it for not expressing temperance. What’s my solution? Simple. Attack the problem at its source. Don’t subsidize the stadiums.

As for the interesting rhetoric about the NFL enjoying “an expansive educational system” providing a pool of talent for players; perhaps I could complain about the same benefits blog organizations like HP enjoy from higher-ed institutions (who provide the majority of these inputs in the form of know-it-all college students). Maybe we should tax these blogs and their writers heavily for said “exploitation” of inputs?

In conclusion, I am deeply concerned at your increased proclivity to look to help from the government. I think that sort of desire misses “Wide Right” and would inevitably set off a a bad political precedent at least for the next three super bowls, i mean years.

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