The Economic Structure of the NFL

John Vrooman ()
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John Vrooman: Vanderbilt University

Chapter Chapter 2 in The Economics of the National Football League, 2012, pp 7-31 from Springer

Abstract: Abstract Sports leagues are unique in that individual clubs are mutually interdependent in their cooperative production of competitive games. As joint members of natural cartels each sports team is only as strong as its weakest opponent. Over the last half-century the National Football League (NFL) has become the most economically powerful sports league in the world largely because it has also been the most egalitarian. In 2010 NFL clubs pooled and shared two-thirds of over $8 billion in revenues among 32 franchises. The underlying source of NFL economic strength has been a survivalist “league-think” mentality that developed from the outset of the NFL-AFL war 1960–1966. Evenly shared national media money has grown at a compound rate of 12% from $47 million annually at the time of the actual NFL merger in 1970 to $4 billion under 2012–2013 TV contract extensions. Over the last 2 decades, however, a major threat to league-thinking solidarity has emerged from an individualist counterrevolution in unshared venue revenue. During the luxury-seat stadium building frenzy that followed the watershed 1993 Collective Bargaining Agreement (CBA), the proportion of team-specific venue revenue has doubled from 10 to 20% of total revenue. This once-tight syndicate now finds itself split into those teams with new venues and those without.

Keywords: Total Revenue; National Football League; Collective Bargaining Agreement; Sport League; Monopsony Power (search for similar items in EconPapers)
Date: 2012
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DOI: 10.1007/978-1-4419-6290-4_2

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