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Will fight over revenue undo NFL's grand success?

MIAMI — Down here in South Florida's tropical capital, where the gap is so stark between what the haves have and what the have-nots don't, the NFL today puts on its Super Bowl at the peak of its power as the undisputed king of all American sports. The people who run this league have gotten it to this heady point because they've done so well doing what this city and this country often have not. They've spread the wealth.

Over the last half a century, the system based on sharing revenues has made it possible for teams from smaller cities, far away from Wall Street, to have a fair and fighting chance.

It has catapulted the NFL from a popular sports league to a sought-after entertainment property to a full-fledged cultural phenomenon. More people watch the NFL than any other sport. More people watch the NFL than any other anything.

The NFL, heading into today's game between the Indianapolis Colts and the New Orleans Saints, is the most successful sports league in this country's history, at its most successful point.

This past season raked in record ratings and roughly $8 billion in revenue — all in spite of the biggest recession since the Great Depression.

Here is the NFL in 2010: millionaire players and billionaire owners who financially never have had it better watched by millions of people who statistically seldom have had it worse.

Tense, looming labor issues, though, could lead to a mess next fall, and potentially no football at all the fall after that.


People who are already rich want to be even richer.

The Super Bowl has been played here more than anywhere else. Fitting. Because it's here, in a sense, where the sharing started, almost exactly 50 years ago, when the league's owners picked Pete Rozelle as the new commissioner in the winter of 1960 in a hotel on Miami Beach.

Rozelle, acknowledged by now as a visionary and perhaps the most important commissioner in the history of sports, saw the coming importance of TV. He wanted a national contract for the league, and he wanted all of its teams, 12 at the time, to split the profits.

The richest owner, of course, had the most to lose in that deal, at least in the short term, and so he was the one who had to be convinced. Wellington Mara owned the New York Giants.

By 1961, he agreed.

"We should all share, I guess," he said at the annual league meeting that year.

This makes the NFL, Chuck Klosterman wrote in his most recent book of essays, "arguably the most successful form of socialism in U.S. history." The Chicago Tribune once called the NFL "socialism with cheerleaders." Added the league's chief marketing officer in a story last month on the BBC: "We have a sort of socialist capitalism."

Socialism, Michael MacCambridge wrote in his history of the NFL, America's Game, "was how the sport ensured it was closer to operating as a pure meritocracy than any other realm in American society."

It's not really socialism, but its revenue sharing is more extensive and more egalitarian than any of the country's other sports, and is loyal to the heart of the ideology.

It's a model where those with more share with those with less for the sake of a greater good, and where the rich don't keep getting richer and the poor don't keep getting poorer.

Sports talk uses buzzwords to describe the results — "parity," "competitive balance" — but what it is, really, is this:

Everybody has a chance.

Including even Saints from a city that not that long ago was underwater and half-abandoned, where people stood on the tops of their homes, waving signs that said HELP.

• • •

The sharing of revenue isn't the only reason for the league's immense appeal. The sport is great on TV. The breaks in play are perfect for ads. Games happen just once a week. People like violence. Still, though, on the contribution of the somewhat socialist setup there is consensus.

"Instrumental," said Andrew Zimbalist, a sports economist from Smith College in Massachusetts.

The harvest of that level playing field looks like this:

Overall TV ratings for the league this season were higher than they've been in 20 years.

This past fall, TV deals with CBS, Fox, NBC and ESPN paid each team almost $100 million. Fourteen of the 15 most-watched shows on network TV were NFL games. Fourteen of the 15 most-watched shows on cable TV were NFL games. Only nine shows on TV were watched by 25 million or more people. They were all NFL games. The game in October between the Minnesota Vikings and the Green Bay Packers was the most-watched show on cable TV ever.

Forbes magazine says 25 sports franchises on the planet are worth $1 billion or more — the New York Yankees, five European soccer clubs, and 19 NFL franchises.

Even the lowest-valued of the 32 NFL teams, the Oakland Raiders, worth approximately $800 million, is worth more than all but three Major League Baseball teams and all the teams in the National Basketball Association and the National Hockey League.

The values of franchises in the NFL over the last 15 years have gone up 500 percent.

Who loves the NFL? People with white skin, black skin, brown skin. People who buy jerseys. People who play fantasy. The young and old, the rich and poor, the gamers and gamblers.

"America's Choice," the league called itself in a pamphlet distributed in the drumbeat buildup to the Super Bowl.

The pamphlet even listed reasons for such success. One of them: "extensive revenue sharing."

And yet both sides of the labor negotiations over exactly how to share all that money — the league and the players union — seem to be preparing for a football-less 2011 as if it's inevitable.

In the last generation or so, as the NFL with its wealth spreading has done nothing but get richer and richer, the discrepancy in the incomes between the rich and poor has done nothing but get more and more wide. That was true before the recession. The recession only made it worse.

The NFL has flourished using one philosophy. The nation has atrophied using another.

"You'd think the NFL owners would take a look around and see what's happened to our economic system," said Brian Moore, the Socialist Party's 2008 presidential candidate, who lives in Hernando County.

"Ultimately capitalism fails," he said, "because ultimately a small group of people get too greedy."

• • •

The director of the players union was asked here on Thursday to gauge the seriousness of the possibility of no football come 2011.

"On a scale of 1 to 10," said DeMaurice Smith, "it's a 14."

The commissioner of the league was asked here on Friday to respond to that.

"I sure hope he's wrong," Roger Goodell said. "And I sure hope it doesn't become a self-fulfilling prophecy."

The crux of this struggle can get lost in testy words, Monopoly-money numbers and the complex specifics of labor negotiations involving a multibillion-dollar corporation.

The union says the league wants the players to take an 18 percent pay cut. The league says that too high a percentage of the soaring revenues goes to the players and that some of that money is necessary to do things like build new stadiums.

Basically, though, some of the richer owners have come to think that they're sharing too much with the slightly less rich owners, so all the owners have turned to the players to get back some of the money, and the players have looked at all the money the league is making and have told the owners: You're crazy.

If the two sides don't reach an agreement by next month, next season won't have a salary cap, which means the owners can spend as much on players, or as little, as they want.

And if the two sides don't reach an agreement by March 2011? No more football.

Worst-case scenario?

"Potential devastation brought about by a lockout," said David Carter, a sports business expert at the University of Southern California. is doing a webinar this month on the league's labor issues. The title: "The end of the NFL as we know it."

"It's a complicated question," veteran Pro Football Weekly editor Hub Arkush wrote in last week's issue, "no different from whether the wealthy should pay a higher percentage of tax on their incomes than the poor, which is at the heart of concerns over the future of America."

• • •

On South Beach's Ocean Drive on Friday night, across from the $19 mojitos and the techno beat and the pastel glitz, an uncle and a nephew stood on the sidewalk by the start of the sand, wearing their black and gold Saints jerseys and their Mardi Gras beads, celebrating the party for now.

They'd paid $1,500 apiece for tickets that were $800 face value.

"I had a dream about this game," David Giveans said, looking toward the sky, "and the Saints are going to play magically."

"I'm going to be eating Ramen noodles," Randy Giveans said, "for the next four months."

Michael Kruse can be reached at [email protected] or (727) 893-8751.

Will fight over revenue undo NFL's grand success? 02/06/10 [Last modified: Tuesday, February 9, 2010 10:34am]
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