The NFL People's Democratic Republic (Plc)

(Photo by Jim McIsaac/Getty Images)

Every year at about this time I end up in conversations with mildly confused people who are fans of the NFL but not familiar with its business model.

As coverage and discussion of the upcoming NFL Draft ramps up, onlookers notice that it appears to be a pretty left wing idea (like revenue sharing and the salary cap), and they wonder how such a socialist enterprise can be the most popular sport in the Land of the Free. Look a little further, however, and this apparent socialism is only skin deep.

Fans of other sports are used to teams being separate and competing interests, focused completely on their own (short term) needs.

In most sports, cooperation between franchises is rare—the formation of the Premier League in English soccer being the exception that proves the rule. The NFL works differently, with all 32 owners working together and accepting individual sacrifices like revenue sharing—but why?

Lenin - not a fan

It’s all about perspective—the owners (and the league Commissioner as their advocate) accepted long ago that their true competitors aren’t each other, but rather other sports and different forms of entertainment.

Pat Bowlen and Robert Kraft might be competitors for a week when the Broncos play the Patriots, but the real threat to their teams and profits would be casual NFL fans deciding the league was getting a bit dull and putting their money into watching tennis.

The franchises therefore don’t behave like competing companies who’ll claw each others’ eyes every chance they get, but more like rival sales teams working in the same office—who all get paid out of the same company bonus pool.

This is a pretty farsighted bit of thinking, but that’s how they all ended up being squillionaires in the first place.

The owners believe that making the NFL a larger and more profitable place to be is the best way to grow their own piece of the pie. Each of the league’s supposedly collectivist elements therefore actually serves a highly capitalist purpose, which is to help protect and grow the overall company—NFL Inc.

The Draft

Roll up to see some old guys read out names

On the surface, the NFL Draft is a model of egalitarianism.

Young players looking to enter the league from the college system have to go through the draft, and the 32 teams start off with the same number of choices, taking turns to pick in order from the worst team to the best.

The idea behind this is that if you’re the league’s worst team one year—this year it’s the Detroit Lions—then you’re able to pick the best player in each round and get better quickly, while the year’s best team—Pittsburgh—are handicapped and can’t sit on their laurels.

In reality, of course, the Draft is a capitalist masterstroke.

By creating a high profile media circus out of an activity which is common to all sports—selecting rookies—the league manages to create drama in an otherwise mundane offseason, keeping fans’ interest away from other temptations like college basketball or writing poetry.

Needless to say the broadcast rights and advertising around the draft generate revenue, but draft picks are also a sort of currency within the NFL’s internal marketplace, traded between teams in exchange for other picks, players or even coaches—hardly a victory for the proletariat.

Revenue sharing

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