Submitted by: Mike Spindell, guest blogger
I’m a fan of professional football and I’ve followed it for almost 60 years. Many of those who come to this site, especially our Proprietor, are football fans as well. The game is exciting to watch lending itself perfectly to television viewing, as compared to the other professional sports. However, this is not a post about the sport, the players, its violence or its merits. This is a critical look with the overarching corporate structure of the National Football League. The NFL has become the most lucrative sports business organization in the United States, receiving approximately $8 or $9 Billion a year from TV networks and its revenue from all other sources, including licensing, radio and satellite TV. On average each of the NFL’s 32 teams earns an average of $175 million per year which includes ticket sales. Under the collective bargaining agreement, won after a threatened “player lockout” in 2011, each team has what is known as a “hard salary cap”, which means that the total each team pays to its players is capped at a fixed amount which cannot be exceeded. Currently the cap per each team is about $130 Million per year. Therefore the average NFL team probably makes a profit of at least $30 Million per year after other expenses. Given the state of business, any corporation of medium size that would receive a guaranteed net profit of $30 Million yearly must be considered very fortunate.
The NFL has a rule barring corporations from team ownership:
“Ownership groups must contain twenty-four or fewer individuals, and at least one partner must hold a thirty percent or greater share of the team. The Green Bay Packers are an exemption to the current policy, since they have been a publicly owned stock corporation since before the rule was in place.”
At first glance this may seem a salutary policy, but in operation the League’s ownership consists mainly of billionaires, who are either football fans, publicity seekers and/or both. In fairness I must admit that some of the current owners are descendants of their teams’ founders, such as the Rooney’s in Pittsburgh, the Mara’s in New York and the Halas family owners of Professor Turley’s beloved Bears. Mainly the teams are run by people who made their money in other professions and decided that a football team would make a great hobby. The problem is that the “hobbyists” have and are exhibiting the type of business philosophy that seems to have taken hold in America, which is a ruthless model, in which their employees and even their customers, the fans, are merely pawns to be run over roughshod as they satisfy their egos and their greed. After the break I’ll explain my thinking on this and show why I see the NFL as a metaphor of what’s wrong with our country.
What brought this to mind for me was the “lockout” of NFL Officials and Referees, which ended this week after a debacle on Monday Night Football: http://jonathanturley.org/2012/09/25/foul-ruling-replacement-refs-blow-call-and-given-seahawks-unjustified-win-over-the-packers/ By Thursday a contract had been signed and the regular Officials were on hand to referee the Thursday Night Football Game. The sticking point in the negotiations had been over the NFL’s insistence that the official’s pension plans be converted into less lucrative 401k’s. This would have saved the NFL about $3. 5 million. With the $8 or $9 billion yearly that the league generates, this at first would seem silly. However, Roger Goodell, the NFL Commissioner admitted that this wasn’t about money:
“From the owners’ standpoint, right now they’re funding a pension program that is a defined benefit program,” said Goodell, who was in Washington on Wednesday attending a luncheon hosted by Politico’s Playbook. “About ten percent of the country has that. Yours truly doesn’t have that. It’s something that doesn’t really exist anymore and that I think is going away steadily.” What we agreed to do and offer as ownership,” he added, “is that they would have a defined contribution plan, in the form of 401(k), so they’ll still have a pension plan but the risk, like {for} most of us, would be on individuals.” http://www.huffingtonpost.com/2012/09/13/nfl-referee-lockout-pensions_n_1879049.html
So this “lockout” by the NFL was over principle? This struck me as very strange. Since only about 10% of the country has pensions (according to Goodell) and they are becoming “a thing of the past”, the NFL sought to take away the pension plan that their officials had had for many years. This struck me as a political viewpoint that has become all too common among America’s elite. While most sports columnists and broadcasters were careful not to be too disparaging in their comments, lest the run afoul of the all-powerful (in their field) NFL, there were some who did analyze what was happening correctly. One was Roger L. Martin, the Dean of the Rotman School of Management at the University of Toronto, the author of “Fixing the Game: Bubbles, Crashes and What Capitalism Can Learn from the NFL.” In an OpEd piece for the NY Times he wrote:
“But why the lockout, and why did the N.F.L. fight so hard? Because the league was fighting a bigger fight, one that is representative of a war beneath the surface of the modern economy — the war between capital and talent. Since the Industrial Revolution, two groups have fought for the spoils of their joint production. On one side is capital — the owners and investors who provide the means of production. On the other side is labor — the workers who turn invested capital into profits. Traditionally, capital wielded disproportionate power.
As late as the early 20th century, capital brutally suppressed labor and ground down wages to subsistence levels. But labor fought back, aided by Congress, which passed the National Labor Relations Act in 1935. The act paved the way for big increases in unionized labor wages, and union participation tripled. Inevitably, capital fought back. Through the 1970s, owners moved jobs to Sun Belt right-to-work states. They automated, outsourced and worked to diminish the power of unions. When Ronald Reagan crushed the air traffic controllers’ union in 1981, it was a clear signal: labor had finally been forced to capitulate entirely.
But around this time, a dangerous new adversary to capital emerged: talent. Talent, in contrast to the more generic labor, is highly skilled and portable. And in the 1970s, talent began to flex its muscles. In Hollywood, artists demanded “percentage deals” rather than straight compensation (see George Lucas’s profit share on the “Star Wars” films). On Wall Street, investment managers demanded 20 percent of the upside on top of the traditional 2 percent of assets under management. In executive suites, C.E.O.’s accrued stock-based compensation so that they could share the upside with the capitalists. And, in 1975, baseball players won free agency, which led to the explosion of athlete salaries across professional sports.
Generally, capital was not amused. Yet capital capitulated because this was a different kind of labor, with unique, specialized skills that consumers want and need. Replacement air traffic controllers were O.K.; but not replacement N.F.L. players, or a replacement Harrison Ford. The war between capital and labor became a three-way battle, with talent wedging its way onto the proverbial playing field. The biggest loser has been labor. Capital has given so much to talent — because it has no choice — that capital is even less inclined to give any quarter to labor. Capital is outraged because it is being beaten up by talent — whether C.E.O.’s, investment bankers, consultants, movie stars, players — and it takes out its anger on the easiest target: labor.”http://www.nytimes.com/2012/09/29/opinion/the-nfl-strike-and-modern-economy.html?_r=0
I included, rather than paraphrase that really long quote because I think Dean Martin brilliantly sums up the schematics of what has become the attitude of many of America’s Corporate Class. However, while I agree that Dean Martin has gotten the schematics of what is going on correctly, I feel he is lacking in detailing the psychology and the mindset of our corporate elite. The NFL as an organization is a member of the corporate elite, as are most of their team owners. They vie for Corporate wealth to buy luxury boxes at their stadiums and they mostly share an educational and social background with those plutocrats. What I think the Dean misses in analysis is that “Capital”, (i.e. the 1%) doesn’t really hold “Talent” in high regard either. “Capital” loathes talent because “Talent” has skills that allow them to treat “Capital” without the deference “Capital” thinks is due them. How dare these “upstarts” try to get the better of me and my money they think?
Think about it. Why do billionaires like Bob Kraft (New England Patriots) and Woody Johnson (NY Jets) buy these teams? Sure they probably love football, but I believe there is also a psychological factor at play. To put it into somewhat gross terms human males have spent eons obsessed with whose penis is larger. We all know that this is mostly a metaphor for who has power over other males, or who is the Alpha? When you own a football team you are the boss to at least fifty male behemoths, who wouldn’t be there if they hadn’t been exceptionally Alpha males. When you’re the “Boss” that means that all your employees are subordinate to you. After awhile or maybe even initially, given the egos at play, the “Boss” begins to see himself as the central figure on his team. Players and Coaches come and go, but the “Boss” remains in control. Players and Coaches are seen as just as “disposable” as the “Labor” Dean Martin talks about. The demands of this “Talent” strike the “Boss” as effrontery and the “Boss” begins to believe that these “ingrates” to his munificence should be taught a lesson. This was really what the threatened “lockout” in the NFL last year was about. The leagues income kept rising, even terribly managed teams are being well rewarded and yet the NFL demanded “givebacks” from its players and to some extent got them. This was more than greed. This was a demonstration of penis size and a reminder to “Talent” of their place in the hierarchy.
A second area in this, that I think Dean Martin himself is guilty of, is the notion that mere “Labor” is ultimately replaceable and interchangeable cogs in the corporate wheel. This has been a dominant Business School theory for a long time and even goes back to when I was a business major in college.
What is behind it is the view of the working class as being merely dumb bodies to be manipulated to meet the needs of the Plutocrats. Thus has it ever been, this disparagement of Labor (the working class) by the Elite and by those with elite pretensions, who grovel at their feet hoping to be given some elite attention. “Labor” is hardly as interchangeable as many of the elite and the business schools think them. In the past few years we have seen a company like Circuit City, fire its most experienced and higher paid sales people to increase its profit margin, only to go into bankruptcy and close months later as sales fell.
What’s wrong with America, which I think the NFL as a corporate entity represents, is that a psychology of entitlement has taken hold in those who would rules us, or manage our affairs. While it is true that this has always been the case throughout human history, America emerged as a powerful nation because there was at least a pretense that it was the nation of the “common man”. Our Plutocracy has rediscovered the false notion that it is really all about themselves and their needs. We are hearing the “common folk” talked about in a way that hasn’t been socially acceptable since the 19th Century. We are seeing the Corporatocracy try to deprive most of us of good wages, good benefits and a security net. They are doing this not out of economic necessity because their lot has never been better. They are also projecting their own sense of entitlement onto us to justify their actions. Their fault, and the wrong they are trying to do to America, is their need to dominate us all. Its not about power or money so much as it is about the psychological pleasure of seeing oneself as the “Boss” and therefore possessing the bigger penis.
Submitted by: Mike Spindell, guest blogger.
Right, Right. It’s a distillation of Heterosexual Male Dominance Units.
And, I forgot to mention what some believe to be as important as unrestricted free agency, that being binding salary arbitration.
Mike, My wife and I are stockholders. My brother-in-law bought us a share for Christmas. Her family has had 4 season tix since the Lombardi era.
Miller was villified by a syncophatic press, but not anymore. We must be patient and let history takes its course. The baseball palyers knew you need a smart, Jew, lawyer on your side. Just a good natured quip, channeling Archie Bunker.
Mike,
“Collective bargaining” has also become an ugly term.
“Marvin Miller showed the way that TRUE free agency is the key to levelling the playing field between between management and players.”
Nick,
Marvin Miller is a personal hero of mine and his efforts were always misunderstood by the mainstream media.
“My pet peeve, in all sports, is citizens paying for stadiums”
.
It is mine also Nick. As for the Packers they’re a good team to root for because they really represent the model of what a pro sports team should be. They are predominately owned by the citizens of Green Bay, who’ve bought stock in the team. Thus this relatively tiny city ca maintain a franchise that is among the oldest in football, without the fear of losing it to the lure of a major city.
“This attack on pensions is a ploy for the elite to make more money from the selling of 401k products and services. America is well on its way to becoming a 3rd world country with the haves and the have nots! The have nots will never see retirement and work until they die.”
Deborah S.,
Bingo! I’m glad you added that to the discussion because it was a sub text of the points I was trying to make. After working 32 years for NYC, with great responsibilities and relatively low pay for my executive positions, my pension finally made retirement possible. That pension plus social security is all that keeps me from poverty. In the private sector I would have received much more money, so the pension and the benefits are just compensation for the work I did. However, in a climate where the Elite consider all but themselves
irreplaceable, pension has been turned into an ugly word.
“The collusion between business and government at the expense of labor, which renders a significant number of citizens superfluous, can’t continue without doing irreparable harm to the nation and her citizens.”
LK,
“North Dallas Forty” was a great movie for exposing the inner workings of football and the disregard for its players by management. The original book was even grittier and gave a clearer picture. Considering how the NFL has grown financially and iconic-ally since then, one could only think things have gotten worse. Although very well-paid, the players seem to have an earlier mortality rate than the average population and the effects of multiple injuries leaves many disabled at a young age.
“The collusion between business and government at the expense of labor, which renders a significant number of citizens superfluous, can’t continue without doing irreparable harm to the nation and her citizens.”
However, as illustrated by your coda above, you rightly delineate that the NFL is merely symbolic of a dynamic that is playing out country-wide. This “collusion” is the real villain behind our economic distress as you point out so well.
There is a simple fix for the NFL, quit going to the games and watching them on TV, quit buying NFL paraphernalia and video games.
We want what we want and all of Dean Martin’s protestations wont make it any different.
Wal Mart only exists and puts mom and pops out of business because people shop there, repeatedly.
More government isnt going to fix the cabal of business and government, government is what created it in the first place.
Deborah,
“This attack on pensions is a ploy for the elite to make more money from the selling of 401k products and services.”
I couldn’t agree more.
*****
They will have to work until they die…IF they can find jobs.
The few in America who still have pensions are under attack. I live in Texas and work in a school district. All school employees pay into the teachers retirement system and not into social security. In fact if you paid into social security in a previous or future job your social security is reduced because of the pension. The Texas legislature is once again attempting to change our pension into a 401k plan even though studies have shown that we are well funded. This attack on pensions is a ploy for the elite to make more money from the selling of 401k products and services. America is well on its way to becoming a 3rd world country with the haves and the have nots! The have nots will never see retirement and work until they die.
“We’re not the team, we’re the equipment.”. (lotta quoting movie line)
Classic and a very apt description of many organizations be they commercial, religious, or political.
Mike, Much of the inequity between football players and baseball players has to do w/ union leadership in past decades past. As you know, Marvin Miller was tough as hell and brought baseball players from servitude to wealth..some may say too much wealth. When you look @ football players contracts, compared to baseball players contracts, it’s sinful. Marvin Miller showed the way that TRUE free agency is the key to levelling the playing field between between management and players. In the mid 70’s, when Miller was fighting antitrust w/ baseball owners, Ed Garvey was doing the same in his role as head of the NFLPA. Both baseball players and football players held strikes during that critical decade. Miller would settle for NOTHING less than unrestricted free agency and guaranteed contracts. Garvey, being way in over his head, got rolled by football owners. He gave up unrestricted free agency and guaranteed contracts for a pittance of a better benefits package. Miller is a saint to baseball players. Garvey is Quisling to football players. We must choose our leaders wisely.
To a great degree, I agree w/ you about the corporate structure. My pet peeve, in all sports, is citizens paying for stadiums, one of the most blatant examples of corporate wellfare. However, business is hardball, not tiddly winks. The football owners won big time back in the 70’s and they’re just building on that victory. Baseball players won in the 70’s and they are doing likewise. That’s not to say baseball owners aren’t getting wealthy, but the players get very well compensated. To the victor goes the spoils. You may not like that. However, that’s the way it works. This referee situation was just letting everyone know who’s better hung..it’s not more complicated than that.
I like when you write about sports, even though this is about more than sports. Having coached baseball for decades, we both know sports can be a great metaphor. Thanks for your well though out piece. The Packers got robbed. I go to a couple games a year and have attended NFL games regularly since the 60’s. Giants in my youth, Chiefs in the 70’s, Bears in the early 80’s and Packers from then to the present. It is by far the game best suited for tv. But, I still love being there in person.
This is exactly why I like baseball better . . . oh . . . wait . . . nevermind.
Well, the refs got pretty much what they wanted…. That’s the thing…with highly trained individuals….. They get the job done right…. If defined benefit vs contribution is an issue….. Just wait for the government to implement it on its soldiers….. Then all hell will break loose…..
Mike S: “Players and Coaches are seen as just as “disposable” as the “Labor” Dean Martin talks about.”
________
An old movie about football, I think it was “North Dallas Forty” from the 70’s had a great line that encapsulates what you are saying about the labor management dynamic in both football and the nation: two players talking in a training room about how bad management treats them and one says (motioning to some hydro-therapy equipment that is broken) that management should treat them better, they are after all the team, and the older and wiser of the two replies that his friend just doesn’t get it, “We’re not the team, we’re the equipment.”. That can well serve as the motto of labor-management relations for the past 30 years and who knows how long into the future.
I don’t know that it can be reversed. You are correct that it started with corporate flight to the south, and then offshore. The reorganization of the labor-management dynamic would require a realignment in the the fundamental way the country does business and much of that would require government to play a very active and wide ranging regulatory role. “Made in America” (by American labor) would have to be constructed and enforced as a fundamental policy across the entire spectrum of tax law, tariffs, trade agreements, immigration and education.
The only leverage labor has is a tight labor market and that does not exist and can not exist in the current hybrid relationship between business and country: laissez-faire regarding taxes, regulation and, for those companies moving operations overseas, no punishing tariffs to import their products back on shore. Simultaneously there are massive subsidies for some industries and encouragement and protection for consolidation such as oil, farm (corn and meat), pharmaceuticals and the entertainment media.
The collusion between business and government at the expense of labor, which renders a significant number of citizens superfluous, can’t continue without doing irreparable harm to the nation and her citizens.
There is nothing new here. It’s all part of human nature.Has always been and always will.
“I feel he is lacking in detailing the psychology and the mindset of our corporate elite.” – Mike S
I noticed that you didn’t leave psychology out though Mike: “… it is about the psychological pleasure of seeing oneself as the “Boss” and therefore possessing the bigger penis.” – Mike S
Ok, to put it in street talk, they are “dicks.”
It gets a bit more scary when, instead of football teams, they play with their toy soldiers, suicidally forgetting that they are also endangering themselves and their own elite families:
(The Teapot In A Tempest). There is a deeper psychosis animating some of these subconscious mysteries too:
(When You Are Governed By Psychopaths). While I was reading Mike’s piece I was reminded that Bush II was a sports team owner, and that Mittster Rmoney said he had a lot of friends who owned football teams.
This nonsense was brought about bu guys like Woody Johnson and Jerry Jones who are going to show these unions they can be pushed around…Both of these morons are, of course, big contributors to Romney and they are not happy that Romney is going to lose big…
Mike
As always, very well written and spot on.
Thank you for writing this article. I will recommend it to many. I wish it had been longer.
break the unions, end the pensions, let th peons get their crumbs as long as we make money off them – seems to be the way the country is going for sure. This election cycle has made that more pronounced then any other that I recall.