The NFL has long ago found the right formula in approaching the sport entertainment business. The late Pete Rozelle’s theory believed the strength of the NFL coincided with the weakest of NFL franchises and thus the goal of revenue sharing between teams was to ensure the survival of all franchises. Without revenue sharing, there would be no Green Bay Packers and the importance of Green Bay is as much historical as anything since Green Bay represents a connection between the old NFL of pre-World War II and modern times. While many critics considered this a form of socialism, they miss the point but Rozelle did not, for the NFL competes for entertainment dollars with other sports and other forms of entertainment. The Washington Redskins may compete with the Dallas Cowboys on the field, however, they don’t compete for market share against each other, they compete for market share against other sports entities just as Major League Baseball’s Texas Rangers and NBA’s Washington Wizards. When the NFL begins their season, baseball is marching toward the World Series with playoff runs by teams and starting in November, the NBA begins their season.
Other sports are starting to understand that to survive, the whole league must be stronger and they are adopting their own version of revenue sharing to strengthen their leagues, but the NBA or MLB have not matched the NFL when it comes to developing strong teams from top to bottom. In the NFL, every team has a chance to succeed every year and fans of even the weakest franchises know they at least have a chance. In MLB, there are teams that essentially out of the running by July and while teams like the Oakland A’s had successes by using unorthodox methods to stay near the top this ended when teams like the Boston Red Sox adopted the Oakland A’s method with a higher budget. Moneyball combined with big salaries equals championship runs every year. The Red Sox’s adoption of Billy Beane’s methods produced their first World Series since the days of Babe Ruth. In the past, MLB had to take over the management of Montreal; before moving the franchise to Washington and the NBA is now running the New Orleans Hornets. The latter has produced its own conflict of interest when David Stern vetoed Chris Paul to the Lakers before allowing Paul to go to Lakers’ rival, the Clippers. The NFL is the only league in which every team actually makes money and there are no weak franchises when it comes to revenues, only poorly managed franchises.
Another difference between the NFL and other sports is that the NFL promotes the NFL. While there are superstars, the league takes precedence whereas in other sports, superstars often take precedence over the league.
Individual sports like golf, tennis and NASCAR have also learned that they must face the new economics. The reality about sports is that there is no monopoly of media to determine what gets watched. Over the last thirty years, television networks and stations have multiplied and the networks have ceded much of the sports broadcasting to cable with the exception of the NFL, which still has the majority of its games on networks. Sports not only competes for entertainment dollars but entertainment viewership and many sports have even adopted their own networks to increase interest among their fans. Tennis, golf, MLB and the NFL have their own networks in which selected sporting events and a variety of shows about their sports can be broadcast.
Boxing, the sport I cover the most, is way behind the curve when it comes to developing a business plan to compete in the 21st century. What is missing from boxing is a central authority that can negotiate contracts and set up consistent rules or even figure out who are the champions. Golf, tennis and NASCAR have their own central authority that sets up events and rules for everyone and it allows them to capture niche market share. When superstars arise, it increases viewership. Tennis has a working relationship with ESPN as well as the networks to cover their crown jewels, the majors. Golf has their own relationship with the networks along with NASCAR, who had added coverage on ESPN and Showtime.
MMA through the leadership of Dane White now has a working relationship with Fox and its various cable networks while the NHL has managed to work out deals with NBC and its cable outlets. While boxing has its own working relationship with ESPN and both Showtime and HBO, it would even be better with one central authority.
Here is the take home message, sports compete with other sports and other form of entertainment and the NFL domination of the sport world began with the genius of Pete Rozelle, who realized his league was not individual franchises but one league, with 32 franchises or divisions located in key markets to attract a fan base. The strength of the league has allowed it to negotiate great deals for the league with the networks and cable. Football means fans and fans means ratings, ratings means increase ad revenues for the networks and cable. And it also means many fans are perfectly willing to spend their Sundays at home or at bars on a Sunday afternoon watching football instead of going to the movies.