What the NFL Can Teach America

The worst recession since 1929 shattered American confidence in our economy and in our government. Global stock exchanges crashed, and the whole world lost its savings in the wreckage. Wall Street and Detroit teetered on the edge of insolvency, and Washington, when it finally realized the scale of a problem that had been brewing for years, reacted in panic.

As we attempt to reshape our politics and our badly sputtering economy, a good place to start looking for models would be a business most Americans—Tea Partiers and Marxists alike—consider a crucial part of our national identity: football. Despite the poor corporate climate, the National Football League continues to attract fans, rake in profits, and dominate the television market. Why? Because the NFL puts out a good product—entertaining games between well-matched teams—that people will pay to watch. Perhaps economists and policy-makers should take notice.  After all, if there’s anything more American than football, then by golly, it’s got to be capitalism. But the methods behind the success of the NFL might surprise many of its most loyal fans, given how loudly we proclaim our collective love of free markets and our corresponding disdain for their ever-encroaching enemy: European-style socialism.

By American standards, our football league is Red to the core: The league office sets a limit on how much each team can spend on its players and fines them heavily if they fail to comply. It divvies up the revenue from its gigantic television contracts equally between every team. It allows the visiting team to collect forty percent of the ticket sales at away games. All these regulations are explicitly designed to help teams from small-markets, like the Green Bay Packers, win Super Bowls alongside big-city rivals like New York and Dallas.

What’s going on here? Doesn’t it seem deeply un-American that the richest teams are forced to cap their spending? It’s their money; they earned it. Let them do what they want with it, not force them to give it away to less successful teams! How can Budweiser and General Motors, companies whose marketing departments make explicit the connection between owning their products and being a patriot, use this competition to hawk their beer and trucks? Why do we cheer wildly when our favorite team wins a league run like a European welfare state but lose our tempers about common-sense regulations on healthcare, pollution, and Wall Street? It seems like a glaring contradiction in our national psyche: We love our football league but hate the sensible policies that have made it so profitable.

Well, maybe it’s possible that the NFL isn’t so far to the left. I mean, imagine: If our favorite sport is run by little Lenins and imitation Trotskies, what must European football be like? Most likely every player, regardless of talent, is paid exactly the same salary, one mandated by some faceless bureaucrat in a tiny office in Brussels or Geneva, and the teams line up in alphabetical order to take turns winning the league title.

The reality is far different: In Europe, teams are allowed to spend whatever they want. There are no salary caps and revenues are not shared equally. And so, unlike the NFL and even Major League Baseball, where all but the most poorly-run teams have a shot at the championship each season, in Europe, the same three or four soccer clubs win the league trophy year after year. In England, for example, just three teams—Manchester United, Arsenal and Chelsea—have lifted seventeen of the last eighteen English Premier League titles. Pretty boring compared to America. In the same time span, twelve teams have won the Super Bowl, and eleven have captured the World Series.

But European soccer isn’t in danger of boring people or losing fans. Instead, it faces a financial catastrophe much like the one that took down so many of our banks and corporations, one caused by a boom of cheap credit, poor risk management, and a complete absence of effective regulation. With no financial watchdog, the European clubs borrowed heavily and sold themselves hastily to corporate raiders. With no spending limits, they used their inexhaustible lines of credit to spend obscene amounts on players who flopped or got injured and coaches whom they were forced to fire.

With their cheap credit and revenue streams drying up and interest rates sky-rocketing, all these teams are now in danger of collapse. Their irresponsible behavior demonstrates the superiority of the NFL’s insistence on limiting spending and economic disparity. And while the clubs’ global brands most likely will allow them to stay afloat, their days of wild spending appear to be over. Michel F. Platini, the president of European soccer’s governing body, seems to mean business. He has threatened any team that does not meet a salary cap and strict accounting rules with expulsion from the fabled European Champions League, an absolute cash cow for every club involved.

For the sake of soccer’s long-term health, let’s wish Mr. Platini luck as he attempts to turn his sport into Europe’s version of the NFL, in the process regulating one of his continent’s last Wild West markets. Let’s also hope that our own politicians and business leaders here in America turn more to the National Football League and less to Goldman Sachs as they attempt to restore civic and financial responsibility to America. Even if they have to use a little NFL-style socialism to do it.

Nicholas A. Nehamas ’11, a Classics concentrator, lives in Mather House.