Fooch's Note: While some will disagree with the conclusions here, I do think this is a well-worded take on the subject from a slightly different angle. Emotions have run high in this and one often does need to factor in the capitalist nature of things and get a little selfish. Although some may disagree, this is an excellent FanPost.
"Millionaires vs. Billionaires", "The players are greedy", "The owners are crooks", "They’re both killing the game", "I’m selling my season tickets", ……. Maybe these rants explain why tabloids are the NEW media. These statements attract attention but they don’t resolve anything. Remember that movie line? "In a capitalistic society, for lack of a better word, ‘greed’ is GOOD." So, what’s the problem?
I don’t really understand why fans have been choosing "sides" to be on – this dispute isn’t a game, we don’t really have a team playing, there is no championship at stake. This isn’t American Idol, where you vote for who’s personality you like and it counts toward something. The correct answer isn’t in the back of the book. This is just an economic process following its due course. Oh, way to take emotion out of the blog DVC, why would anybody want to talk about economics here? (Because economics has jurisdiction over this issue.)
I know this will cause some of you a great deal of pain and anxiety but for the next few paragraphs, pretend you are an owner. You have accumulated equity of $1B, from having more successes than failures, in various industries and have liquidated it so that you can invest in an NFL team. Your goal is the same as any other business – make a return on your investment, which would be comparable with investments you could have made instead, otherwise, why would anyone own an NFL team? Providing a public service is not your goal. Are you rolling in money? Ummm no, you spent it on the team; you are rolling in equity again.
Demand is good in this industry and for this demand, you will put up with receiving most of the public blame for the unpardonable sin of "not winning", whenever it occurs. With good demand, you can make a better return by lowering costs, raising prices or a combination of the two. In other words, you WILL have the ability to make a comparable return in this industry. Let’s assume that an investor can make 10% per year on the stock market, or by owning a Laundromat. By setting prices, so that revenue exceeds cost by 10% of your investment, you WILL make a comparable return on your equity. Of course, this power is never absolute - If you raise prices too much, demand may drop but otherwise, your goal IS attainable. So, since your 10% is assured, your next step is to lock in player cost, so you’ll know how much to set prices.
The players want you to pull down your pants and bend over. No actually, it’s worse than that – they want to see your books (and so do all the nosy fans)! CRAP!! Everyone would find out about your stadium cost overruns and how your negotiating skills compare to the other teams. Good thing you’re still a private company. When you go public, investor’s money needs to be protected. Otherwise, only the IRS, your independent accounting firm and maybe some creditors need to see your books. Why no others? In a private enterprise, there is no outside investment money to protect. If a consumer doesn’t trust the product, they don’t buy it or could ask for the return policy. If an employee doesn’t like the job, they could work somewhere else. No other party really "needs" to know about your books. There might be the possibility that the tabloids (I mean media) will try to position their nose up the unauthorized sweet spot of some confidential source and leak it out under the pretense "the public’s right to know" but that all depends on their cost/benefit scenario and if they have more desirable priorities. I imagine that Yahoo has an entire department dedicated to finding out, exactly what base that Justin Bieber has gotten to with Selena Gomez, so the secrets in your books are probably at a much lower priority. For most of the world, this is "only" football.
As an owner, you’re probably getting a little tired of hearing about all the billions that you’re "making". The word "making" is properly used with income or profit, not revenue. Since profit is revenue less expenses and nobody knows how much your expenses are, then nobody knows how much your profit is either. Just because you won’t tell anybody (except the IRS, your independent accountant or some banks), does that mean anybody can conclude that you’re making billions or you’re a crook? They don’t "know" diddly squat about your profit. It’s OK if they don’t buy your product or don’t work for you but they’re wrong to make assumptions from a lack of information. That’s called bias.
Ok, you can stop pretending to be an owner now (or resisting it with all your might).
When the league opted out of the CBA, said they weren’t getting enough and wanted to reduce costs, my first thoughts were "better option for me than raising prices". After all, am I going to get a better product if the price goes up? Doubt it – The players are doing the best they can just to remain employees. Would I get a worse product if the price goes down? Doubt it – The players are doing the best they can…… Now if player salary went down near to what they could earn with their degree, maybe we’d see a few defections but we’re not even close to that pay level. I don’t much like the owners either but their solution seems to work better for me. After all, greed is good for me too. So, just what relationship do we bloggers have with a player in this dispute, anyway? Fan? There’s no game and the activity is pretty boring. Agent? No commission or value added for us. Social Worker? No salary either (or poverty to protect against). We shouldn’t be disillusioned that if the players get richer, it could (somehow) help us. Maybe we’re supporting the players out of habit from games. The players are heroes (sometimes). There is also the chance that some of us have nothing better to think about besides football (who, us?) and are impatient enough to assign blame for the uncertainty. Impatient you say? Well, realistically, when has a labor dispute NOT gone down to the last minute? Why would this issue be any different?
This "taking sides" response leads me to believe that we’ve lost our focus. We’ve forgotten what our primary role in this economic dispute is. We’re not associated with the players OR the owners. Neither of them is on OUR team. The owners are acting like capitalists, the players are acting like capitalists but we’re still acting like fans - Some capitalists WE turned out to be. We’re the MARKET. We’re the ones who pay every cent of the revenue, either through ticket and merchandise sales, cable or satellite channel packages or from the influence of sponsor commercials. We pay both the owner’s profit AND the player’s salaries. This dispute isn’t about how to split $9.3B. That was LAST year’s revenue. This is all about determining how much to CHARGE US NEXT YEAR.
Oh, you don’t go to the games, so a price increase won’t affect you? Maybe not now. Over 30 years ago, when there were only three major networks, the idea of "pay TV" was introduced and the public said it would never work. Yeah right, you can’t even get good reception today without paying extra. My nephew in New York City is constantly annoyed that the big games are not on the package he gets, so he has to go to a sports bar to watch them and he doesn’t even drink. Even if you don’t go to the games, you won’t be able to avoid paying for where these escalating costs are headed. Someday, the "influence of sponsor commercials" may not cover the bill. Get ready for HBO, Showtime and the NFL Premium Channel. Oh sure, they’ll air preseason and some regular season games on the major networks, to stimulate interest and suck in some new customers but come playoff time, …..well, you know the routine.
We ARE involved in this dispute and its outcome impacts us economically. Since I do not have an unlimited supply of money, I prefer a "market-friendly" solution. I’ve loved football for a long time but if they screw it up, someday my love could be priced out.