The particular section that got me thinking about this was when he talked about the NFL’s antitrust exemption. He noted that MLB’s antitrust exemption was gained from the Supreme Court, so it would work differently to get it repealed or altered.* The NFL’s exemption, which is much narrower, was gained directly from Congressional action in 1966 during the NFL-AFL merger. Easterbrook’s point is that Congress essentially gave away that exemption for nothing when it could be used as a very nice bargaining chip. His idea was to see the exemption auctioned off. If the NFL wanted to control it itself, they would have to put up the money to do it. Otherwise the highest bidder would control it and have the option to lease it back to the NFL. Do this auction every five years or so, and instant money to pay down the debt or whatever. Cha ching!
*Although I’m not all that convinced this is right. Gregg Easterbrook is a very smart man, but he is still just a man. This ESPN story from 2001 (when contraction was still a thing) would seem to indicate that the Courts put it back on Congress to change and manage this exemption. Easterbrook does say Congress can change the law but not directly overturn it. And maybe he’s right, but the ESPN story would seem to suggest that Congress was on the verge of repealing the exemption in 2001.
Or, well, something like that. I have a hard time really believing that scenario is even halfway plausible on a number of levels. But it did get me thinking. As a society, we have decided that monopolies are horrible things that led to the Gilded Age and may be leading us there again. But when it comes to entertainment, and sports in particular, we not only tolerate it, but actively encourage it. Why is that?
It comes down to competition, I think. Like those older Lending Tree commercials used to say, when banks compete, you win. That generally holds true for businesses as a whole competing for business. Sports, while still a business, are a different animal. Sport, at its base, is selling competition. For this to work and draw interest, you have to know that you are seeing the top of the line, the cream of the crop, the best in the world. To ensure that, it really doesn’t work if your top leagues (MLB, NFL, etc.) don’t have a monopoly on the top talent. Now, the reserve clause was always wrong, there’s no reason free agency couldn’t have existed forever, but as far as launching true rival leagues? It won’t work, and it shouldn’t work. You can have as many minor leagues as you want, but there needs to be one true pinnacle league.
Baseball provides a pretty great example of this, actually. It started with the National League, and eventually the American League came to town. After much bickering and bitterness and false starts, these leagues did finally agree to a World Series. While they may have maintained separate offices and legal identities until 2000, in a competitive sense, they were forever joined as one true league in 1905 in the sense all their teams were playing for the same championship. There were other major leagues over the years. The Federal League gets the most attention, and the Pacific Coast League threatened to become one before settling into AAA status. But they were never invited to the World Series, so they were never looked at in the same light.
Same goes for football and basketball. The AFL and ABA were launched as competitor leagues, but they, too, were eventually brought into the main fold once they were good enough.* The NHL had a messy history of competitor leagues and teams in their beginning before coalescing. And after that, there was the WHA situation which mirrors football and basketball’s histories. It’s the nature of sport. We as fans, and the competitors themselves, really want to know who is the best of the best. If there weren’t monopolies at the top, it would be chaos. You would think, on a philosophical level, that chaos would be more interesting than order. Turns out it’s the order that makes it worthwhile.
*One a little more successfully than the other, as I’ve written here before.
There are some exceptions in sport, though. And those exceptions are minor leagues and colleges. Those levels have different appeals. Both college and minor leagues’ biggest appeal is the chance to see up and comers. You can claim a little bit of ownership in a player or team when you get a chance to see what’s coming down the pipeline before anybody else. I’m a great example of that. I probably would be pulling for the Pirates right now no matter where I lived (except St. Louis). But because I’m in Indiana and spent a lot of time watching the Indians (especially at the time this current core of Pirates were coming through AAA), I feel extremely invested in them. It’s not just a preference, it’s out and out rooting. Same deal with colleges. Is there any reason there would be so many Saints jerseys in Tippecanoe County if not for Drew Brees?
Colleges also have the added bonus of true personal connection. To use the above example, not everybody can take the floor at Mackey or the field at Ross-Ade. But an awful lot of people can be Boilermakers.* When you invest that much time and effort into a school (and they put that much time and effort into you), you’re going to be connected, whether that be from student days or staff. Now, clearly, bigger schools are going to draw more interest, both from having bigger networks to pull from and from having a much bigger pipeline to the pros. You get a few more people going to Purdue games than Wabash games. But that doesn’t mean there aren’t rabid Little Giant fans. There just aren’t as many.
*Not trying to say just anybody can get into Purdue. I’m just saying there are nowhere near 40,000 NCAA athletes on campus.
That’s not even getting into the whole business of broadcasting sports and the negotiations there. Did you know that the NFL is prohibited by law from playing on Fridays and Saturdays to protect high school and college football? They sure are! And that is how we get stuck with awful-for-everybody* Thursday night games. And, boy, how quickly the politics of sports TV has changed, especially for the NFL.
*Except the NFL Network, I guess.
It seems you can’t turn around without hearing about how much better off you are watching an NFL game from home than at the stadium. Sports Illustrated just posted a story about it yesterday. The traffic is lousy, the fans are a mess,* and you just miss so many things at the stadium that you take for granted at home.** And that’s not even getting into the cost. DirecTV makes a big deal about how NFL Sunday Ticket (and all their sport packages, really) are pretty much as cheap as they’ve ever been. You don’t have to spend a fortune to get a good HDTV any more. Related to this, we’ve been hearing for years now that DirecTV is not going to be the sole provider for these types of packages in the very near future. All of this leads to massively, unimaginable-a-decade-ago huge TV deals for leagues. You might remember during the last NFL lock out it was pointed out that owners would still do just fine not even playing games thanks to the TV contracts that paid them whether there were games to actually show or not.
*Thankfully fans have been nothing but great at every professional event I’ve been to, including the Colts. But I do understand that experience is far from universal.
**I got to see that one demonstrated first hand at last week’s Colts-Seahawks game. At a pivotal point in the game, Reggie Wayne scampered for what looked to be a first down from where I was sitting, but the officials did not give him the spot. The challenge flag was eventually thrown, leading to a somewhat lengthy review. A family friend, Kelly, immediately started texting her son to ask if Reggie made the first based on TV replays, which include the first down marker. He immediately and emphatically says yes, he got it by a yard or more, and the TV broadcasters agreed. Eventually the refs came around, too. At home? You look at a replay or two, make your decision, and then go get something out of the fridge or go pee or something. At the stadium? Everybody sits awkwardly and tries to make it out on the Jumbotron, because you’re pretty much at the refs mercy.
Which also leads to some outdated laws (as some would say the antitrust exemptions are). Blackout rules. Once upon a time, those were there specifically to protect the team and drive attendance up, because owners made money off the butts in the seats. Now, while that money certainly isn’t bad, the fans at the stadium are almost living props to give the broadcast good atmosphere. The real money is made off TV deals and sponsorships that come along with that. The Marlins are pretty good proof that you can be insanely profitable without the benefit of more than a thousand or two fans at your games. Now teams scramble and do everything possible to avoid blackouts. I mean, Jacksonville was offering to get you drunk on their dollar to make sure they were on TV.* Discounts on tickets, or even just giving away tickets, so that teams can hit their mark and stay on TV are not uncommon. I would expect that the blackout is going to become a thing of the past as soon as it comes up for negotiation again.
*Even if TV stations were awfully sorry to have to show you the Jaguars.
Sports is a business, don’t get me wrong. But what makes it work, both for the teams and for consumers, is so far outside the normal realm of business and economics, it doesn’t make sense for them to operate on that same level. Do these leagues have a monopoly? Sure. But you wouldn’t have it any other way.