The NFL is the most popular sport by a wide margin. Do not believe accounts of the demise of its dominance. The lovely MBAs over at Business Insider provide this handy chart to remind us of just how dominant the NFL is in America:
Although it’s true that the gap between the NFL and baseball has narrowed recently, it’s more apt to say that baseball is losing less than gaining ground. Add the natural variance of sports entertainment and we can possibly explain away the dip in 2013 through present as irrelevant. The point here is that the NFL is the biggest sport by a mile without any real competition.
How? What is it about the NFL that led to several decades of market control? Questions like this open the door to philosophical inquiry, such as our biological needs for violence. We can argue that sports provide us with avenues to discriminate against groups of “others” without fear of actually hurting anyone. We can even explore the structure of the game and how it naturally allows for commercial breaks with its frequent pauses between downs.
Whatever the merits of those questions, they may over complicate the issue. Occam’s razor states that the simplest is usually the most correct. The simplest answer to why the NFL continues to outpace the market may rest in two factors: (1) salary caps; and (2) revenue sharing.
The NFL salary cap ensures that no team may pay players disproportionately more money to secure All-Star teams. As a result, each team has to strategize how to do the most within their limited means. Each trade, draft, and acquisition of talent comes with a cost. There are no free lunches in the NFL.
Compare and contrast with baseball. The lack of a salary cap explains a great deal of the inequality in the MLB. Major markets, such as New York, can outspend smaller markets. In fact, the 2014 LO Dodgers spent 5 times as much as the Houston Astros. The financial chasm between baseball teams ensures that a select group of teams routinely compete for division titles and the World Series while the remaining teams struggle to fill their stands during the hot, muggy summer months.
In addition, the NFL’s revenue sharing directive ensures that money generated through television contracts, sponsorships, and NFL licensed apparel is distributed 100% equally amongst all of the teams. So, if you buy an official Falcons jersey then the revenue generated from that purchase is split between each team. The success of one is the success of the many. While popular organizations such as the Cowboys likely groan at this provision, this largely contributes to the ability for smaller market organizations, such as the Tennessee Titans and the Carolina Panthers, to remain competitive.
The effect of salary caps and revenue sharing is to spread talent out more equally amongst the teams. This provides a generally higher quality of entertainment product than competing professional sports leagues. The old “any given Sunday” saying holds true.
Who do we have to thank for these league rules? Pete Rozelle, for the most part. Pete Rozelle may be the most interesting man in the history of sports. Mr. Rozelle orchestrated the merger of the AFL and the NFL, creating our modern football league. He also oversaw the institutionalization of both revenue sharing and salary caps. He was the first NFL commissioner. It is upon his shoulders that the NFL stands.