Billszone: As I See It: Football and Economics

January 28, 2008

Posted at 03:37 PM

As I See It: Football and Economics

by Neil G.L. Masters

As I See It: Super Bowl A Testament to Vision Of Owners like Giants’ Mara, Bills’ Wilson and Others, Not Narrow Economic Self-Interest Of Pats’ Kraft, ‘Boys’ Jones, etc.

With the recent front office and coaching moves by the Bills and news coming out that the Bills are likely to receive permission from the NFL to play at least one regular season game per season in Toronto, where there are at least a couple of billionaires who have made no secret of their desire to purchase the franchise and relocate it to that Canadian city once Ralph Wilson dies, there has been much discussion and speculation about the financial viability of the Bills and the team’s long-term future in the Buffalo area.

Taking their cues from Dallas Cowboys owner Jerry Jones, New England Patriots owner Robert Kraft, and Washington Redskins owner Daniel Snyder, a small, but vocal portion of Bills fans, from WNY and around the nation, have expressed the view that it is inevitable that the Bills will be moved by a new owner and that they should be either folded or moved by Wilson’s successor because the economy and fan-base in WNY are simply not sufficient to allow the team to compete with the big-market teams in places like Dallas, New England, Washington, Houston and New York with deep-pocketed owners.

Reared on the economic theories of Adam Smith and the popular political-economic view that unrestrained, unregulated capitalism will always produce the best results and that it is the “American way”, some have even gone so far as to maintain that Jones and Kraft, et al are right when they maintain that they should not have to share any of the monies that their teams generate, especially in local revenues, with the smaller market teams in the NFL. It is only good business, the argument goes, and, besides which, sharing revenues, aside from being socialistic, only encourages small-market owners to be lazy about marketing their teams and to pass up opportunities to wring every possible cent out of the marketplace (this last charge specifically leveled at Bills owner Ralph Wilson by Jerry Jones for keeping his name on Ralph Wilson Stadium rather than selling the naming rights for whatever he could get for them).

If the Bills can’t make a profit in Western New York and have to be moved; if other small-market franchises can’t compete or go under; so be it, they say. That’s just capitalism at work. And, there is no reason why the big-market owners like Jones, Kraft and Snyder, etc. shouldn’t be rewarded for being good businessmen or should have to share any of the money that their franchises generate. They should be allowed to keep whatever their teams make and spend as much as they want to make their teams as good, on the field, as they wish. It’s all about winning and making money, they argue, the strong survive and the weak simply don’t.

My answer to this is that those who hold this very narrow economic view of professional football simply do not know the economic history of the NFL—or the AFL, the league from which this version of the Buffalo Bills was emerged—let alone their history. Indeed, they need only look at the Super Bowl extravaganza that will lead up to the awarding of the Vince Lombardi Trophy at the end of the game on Sunday night in Arizona and the ownership of the two teams that will be on the field that night and the owner of the Bills to see how very wrong they are.

If Wellington Mara, the managing owner of the New York Giants until his recent death, and, yes, the much-maligned around here, Ralph Wilson Jr., had subscribed to the views expressed by Jerry Jones, Bob Kraft and this misguided minority of fans, the NFL would not be the league or the financial gold-mine that it is now. Indeed, the AFL would never have survived long enough to effect the merger with the NFL that produced the Super Bowl (which, in turn, has produced most of the top 10 highest rated television events and generated billions in business, raising the value of the NFL's franchises significantly) and there probably wouldn’t be a New England Patriots franchise in the NFL for Kraft to own.

In the late 1950s, the NY Giants generated more radio and television revenue than all of the other NFL franchises combined. The Giants also produced more local revenue than a handful of other franchises. Even with a draft and no free agency, the Giants were generating enough money to allow them to dwarf the other team in the league on the field as well as off.

Wellington Mara was not a stupid man. He recognized what the situation was. And, he could have kept all of the money that his franchise was generating and, using just some of it, built a team that would win the NFL title every year. Had he done so, if he had wanted, he could have paid enough to bring Brooklyn-bred Vince Lombardi or Tom Landry, both former Giants' assistants who went on to build legendary teams in Green Bay and Dallas as Hall of Fame Head Coaches, back to be head coach of the team when Jim Lee Howell retired (you don’t think Lombardi would have jumped at the chance to return home to NYC if Mara had come calling with cash in hand?). With the players that the Giants already had and those they could have afforded with all of the money that the Giants were generating in comparison to the rest of the league, they would have been unstoppable with either one of those head coaches leading them.

But, unlike today's "hurray for me and to hell with everyone else"-style capitalists, Mara also recognized that, if he kept all of the money that the Giants were generating and built a dynasty in New York, ultimately, it would kill off the league as teams like the then-nearly defunct Green Bay Packers, Pittsburgh Steelers, Chicago Cardinals, etc. would perish. Instead, Mara gave up his pre-eminent financial position in the league and got the other owners to agree to negotiate a national television deal to replace their local TV deals, with all of the teams in the league sharing those revenues. Doing so not only allowed teams like the Packers, Cardinals and Steelers to survive, but allowed the league to expand to Minnesota and back into Dallas (where the league had failed in the mid-1950s!!!).

In the early 1960s, the AFL owners, seeing what Mara's arrangement had done for the NFL, adopted a similar arrangement when they negotiated their first national television deal. Bud Adams, Lamar Hunt and Barron Conrad—all of whom were flush with cash at the time and owned franchises in areas capable of generating a lot more than the other teams in the league—could have used the initial success of their teams, which had won the AFL's first championships, to push for inclusion in the NFL without the acceptance of the rest of the franchises in the league—that was what had happened with the old All-America Football Conference in 1950 (and led to the original Buffalo Bills). But, they chose to share league revenues early on to keep teams like Denver and Oakland afloat.

As we now know, when the Oakland Raiders were about to go bankrupt in the mid-1960s, which would have killed the AFL and ended any chance of the league coming to an agreement with the NFL to have all of its teams absorbed into the NFL, Ralph Wilson Jr. helped Al Davis take over the team and gave it an infusion of cash and talent that allowed the Raiders to go on to become the iconic franchise that it became in the early 1970s and 1980s, something that further helped to increase the popularity of the NFL. The Bills were AFL champions at the time and doing quite well financially, despite playing their games at the old "Rockpile". There was a pretty good chance that, if any AFL teams were absorbed into the NFL if the AFL folded, the Bills would have been one of them. Wilson could have could have let the Raiders fold and taken his chances with getting the Bills into the NFL. But, instead, seeing farther than the immediate benefits to his own pocketbook, Wilson put up the cash and players that saved the Raiders and led to the AFL-NFL merger. And, without the merger, there is no Super Bowl.

Now, think about that for a moment.

Without sharing the revenues from a national television deal, professional football probably does not survive as a major sport. If it does, it doesn't generate enough national interest to surpass the popularity of college football because it is limited to a handful of big cities and the networks are not interested in promoting it.

If the AFL does not survive, there is no Super Bowl, just a NFL Championship Game. With the NFL having virtually the same structure that it had in the 1960s, pro football continues to run a distant second to major league baseball as the national sport and has to struggle to compete with baseball because it doesn't have a premier television event to broadcast like the World Series.

If the owners in the NFL and AFL in the late 1950s and 1960s, like Wellington Mara and Ralph Wilson, were the kind of "pure" capitalists that Jerry Jones and Robert Kraft are and think that NFL owners should be allowed to be, there would be no Dallas Cowboys or New England Patriots for them to own—because those franchises wouldn't even exist in the NFL. The AFL would have died—and with it the Patriots—and there would have been no reason for the NFL’s owners to risk expanding back into the Dallas market—where the Colts had failed—with the Cowboys if it hadn’t been for the presence of the AFL Texans there. And, Jerry Jones and Bob Kraft would just be two billionaires walking around with too much cash to spend and no NFL team to spend it on or make money with.

So, enough with this Adam Smith capitalism argument! (Those who believe in Adam Smith capitalism should go and read some of Charles Dickens' works to find out just what kind of society that kind of capitalism produces.) The NFL is what it is today because it was not a purely capitalist institution/industry—it survived because the owners who doing the best at the time realized that the survival of the weakest franchises was important to the viability and long-term success of the league as a whole and its profitability.

Owners like Jerry Jones and Bob Kraft (and a lot of other successful businessmen today) are too young and/or too arrogant to recognize that they owe something to the people whose shoulders they stand on (especially those who sacrificed to build their industry) and that they are but one small slip from losing everything that they have or care about most.

I have no problems with Jerry Jones and Bob Kraft being wealthier than others or their other fellow NFL owners, or with them wanting teams around the league to try to maximize their revenues. But, I do have a problem with those who think that "he who dies with the most toys wins" and forget that everyone ultimately ends up in the same place and "you can't take it with you”. Andrew Carnegie, Leland Stanford, Cornelius Vanderbilt, Henry Ford, etc. were smart enough to ultimately recognize this--even John D. Rockefeller finally came to see it as well. Who will care if they win and win and win, if, ultimately, they kill off the competition or the competition is so weak that their victory is hollow?

So, as you watch the extravaganza of the “Most Lucrative Show on Turf” at this weekend’s Super Bowl to see if Robert Kraft’s New England Patriots team can complete its quest for a historic undefeated season by winning the Vince Lombardi Trophy, keep in mind that it was the economic vision and sacrifice of the family that has owned and still owns the other team there, the New York Giants—and others like them around the league, including Bills owner Ralph Wilson, Jr.—that have made that spectacle and financial bonanza possible. And, without the small-market teams like the Bills, Cincinnati, Jacksonville, Green Bay, etc. around the league being healthy enough financially to compete well enough to create enthusiasm in those markets, winning a Super Bowl would not be nearly as satisfying or important as it is for the victors.