4 Possible Solutions to Owners-Players Dispute

(Very) far removed from the NFL owners vs. players tussle essentially over revenue-sharing, at first blush it seems like there are only three possible outcomes:

1.  The owners get a larger slice of the pie;

2. The players do; or

3. The owners and players conspire to increase the overall size of the pie — and split that.

Guess which outcome this observer thinks is more likely?

“Win-Win” (Lose)

So, how does a professional sports league like the NFL increase revenues?

By jacking up ticket prices, advertising rates, licensing fees, etc.

In fact, it already has:  the price of an average NFL ticket has jumped from $40 to over $80 in less than a decade — well above the rate of inflation.

Raising prices — and increasing profits — is easy when so many of your costs are already “shared” (subsidized) by taxpayers.

Subsidized Costs

Such as:

Capital Outlays and Rent.  By and large, NFL team owners don’t build and own the stadiums their teams play in, their host cities and states do.

The latter typically use a combination of sales taxes and bond sales to cover the “public” share of the arcane public-private partnerships that perpetually seem to underwrite the cost of new stadiums around the country.

Considering the strength of their relative balance sheets these days, it seems like taxpayers should be hitting up NFL owners for financial support, not the other way around.

Media Coverage.  When was the last time you read an article or watched a TV program promoting the products and services sold by Pepco Holdings, First Data, or XTO Energy?

You probably haven’t even heard of these companies, let alone have a clue what business(es) they’re in.

Yet each of these companies has almost exactly the same projected 2011 revenues, $9.4 billion, that the NFL does.

Now consider how much it would cost the NFL to buy the media exposure it now gets gratis, from every manner of print and online media, practically on a daily basis.

Farm teams.  How come the NFL doesn’t have to pay for and support a minor league system, like baseball does?

Because it already has one, for free:  it consists of what used to be called NCAA Division 1-A teams (think, USC, Ohio State, Texas, etc.), which recruit and train the NFL’s future talent at a sum cost of $0 to the NFL.

So who does support these institutions?

Considering that the majority of them are state schools, that would be . . . taxpayers.

All of which suggests a fourth possible solution to the NFL owner – player stalemate (cue this post’s headline):  the NFL owners and players each take a 10% cut — and pass the reduction along to recession-beleaguered fans in the form of cheaper tickets.

About the author

Ross Kaplan has 19+ years experience selling real estate all over the Twin Cities. He is also a 12-time consecutive "Super Real Estate Agent," as determined by Mpls. - St. Paul Magazine and Twin Cities Business Magazine. Prior to becoming a Realtor, Ross was an attorney (corporate law), CPA, and entrepreneur. He holds an economics degree from Stanford.

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