Ending soft socialism in NFL would make teams better-Tamny

• The league should be able to remove inept owners after giving them a few years' notice.

11/7, "At present the National Football League (NFL) towers over all U.S. sports leagues in terms of profits, television ratings, team valuations, and just about any other measure of popularity and success.

• In that case, for an outsider to question the league’s business model is surely the height of hubris.

Still, in a number of areas the NFL practices a modern version of Karl Marx’s well known communistic principle, “From each according to his ability, to each according to his needs.” This works to the league’s detriment. Ultimately the weak prey off of the strong in the NFL, and this, at least on the margin, softly tarnishes what remains a brilliant product.

Consider the NFL Draft, which on its own speaks to the league’s immense popularity. Not only is it a prime time event, but so great is the interest in it among fans that the draft now occurs over three days. The problem with the draft is one of incentives when it comes to the order of teams selecting players.

• The NFL seeks parity, and as such, each year the team with the worst record gets to pick first.

At first glance this seems like a good idea for obvious reasons related to the league’s stated objective to make each team competitive, but given a second pass it becomes apparent that such a

• system rewards a team for failing.

To fix this, the NFL should copy the NBA’s lottery system, but with one substantial alteration. At present the weakest NBA team has the greatest odds of drawing the number one pick. The NFL should reverse this, stage a lottery among the 10 worst teams, but give the greatest odds to the least weak of the ten teams.

If so, fans paying enormous sums of money to attend the games will no longer have to question the effort of teams and coaches at season’s end. Knowing that they’ll be rewarded for not being the worst team, players and coaches will more likely give maximum effort.

Also, as evidenced by the stupendous failure of recent #1 picks – think JaMarcus Russell, Alex Smith, David Carr and Tim Couch – the benefit of selecting first is really more of gamble that often places the team in question in salary cap hell for years on end.

• If parity is the league’s goal, the weakest teams should be relieved of the burden of the first pick; one that forces them to pay through the nose for unproven talent.

Regarding ownership, it truly matters. For evidence, all one need do is compare Bill Belichick’s record with the Cleveland Browns under the hapless Art Modell versus his winning ways under Bob Kraft.

We can’t do counterfactuals, but if Joe Montana is the best quarterback ever by virtue of his years with the ‘49ers, does anyone think he would have achieved even a fraction of his brilliance if he’d been drafted by Bill Bidwill’s (then) St. Louis Cardinals? Considering the ‘49ers implosion ever since the York family (owner John York famously pulled Hall of Fame coach Bill Walsh aside to “explain” leadership to him) took over from the De Bartolos, does anyone think Montana would be remotely the ‘49er he once was if playing for them today?

• If ownership’s importance is then agreed on, why doesn’t the NFL as a private business reserve the right to relieve unfortunate owners of their teams?

Maybe after five years of playoff-free seasons the owner could be put on watch, and then, if ten years pass without the team making it to the postseason, the league would put future ownership of the persistently failing team up to a vote.

• The likely response to the above would be that giving the league or the league’s owners this right would drive down the value of all teams. Maybe so in the near-term, but this assumption seems shortsighted.

• Not considered are the longer-term benefits wrought by basic incentives.

If owners know that their futility will force a sale, it’s fair to assume that they’ll do everything possible to avoid being forced to sell what for most has been a very profitable investment; one that pays exponentially more in psychic income when we consider the prestige that attaches itself to all NFL owners.

Lastly, revenue sharing in terms of television and licensing contracts needs to be revisited. Oddly, this form of socialism is always the one that establishment NFL commentators rave about. To hear them say it, revenue sharing has made the league what it is today thanks to revenue equality driving team parity.

• Really? When’s the last time the ‘49ers, Bills and Lions contended for anything, let alone proved consistently worthy opponents to the rest of the league?

What’s not discussed enough when it comes to equal access to revenues is how this props up the weakest owners at the expense of the strong ones. And the league surely suffers as a result.

• Indeed, does anyone think the Fords (Lions), Bidwills (Cardinals), and Browns (Bengals) would still be owners today if the financial success of their teams over the years had solely been a function of their individual abilities? Not by a long shot.

At present, the innovative owners in the league (think Jerry Jones and Bob Kraft to name but two) are forced to prop up the failures.

• Worse, ownership failure in the NFL means major profits and rising team valuations no matter the ineptitude of each individual lucky enough to own a team.

If revenues earned by the league were instead apportioned based on individual team success on the field, television ratings and apparel sales it’s not a reach to suggest that the economics of owning a team would suddenly become more of a challenge.

• If so, failed owners would be forced to sell to entrepreneurs actually interested in achieving success with regularity.

If it were to abolish revenue sharing, the NFL would in one fell swoop rid itself of its free riders on the way to attracting wealthier, and more ambitious owners. Team valuations would soon go skyward thanks to the league erasing a success penalty that funnels hard earned profits to the laggards.

So while logic says not to mess with success, it seems worthwhile to consider the NFL’s amazing success through the prism of seen versus unseen. The seen in this case is the success of a league that grows more profitable each year, but the unseen is how much more profitable and popular the NFL would be if it ceased propping up the weak at the expense of the successful. "

• "To be truly great, the NFL must end its soft socialism," John Tamny Forbes.com, Real Clear Markets

via John Batchelor Show

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