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The NFL: A study in socialism and capitalism

nfllogo040511_optBY EVAN WEINER
NEWJERSEYNEWSROOM.COM
THE BUSINESS AND POLITICS OF SPORTS

National Football League Commissioner Roger Goodell has finally confirmed what this reporter and the host of an HBO "political comedy" show have known for years. There is some socialism being practiced by some of the United States' richest captain of industries. Goodell told CBS presenter Steve Kroft on the show "60 Minutes" that the NFL "combines socialism with capitalism" in the league's business model.

Goodell is wrong, NFL ownership depends on socialism with a little capitalism thrown in for good measure and that is the way it has operated since Pete Rozelle became the NFL's Commissioner in 1960.

While Rozelle is considered a sports marketing genius (all you have to do is look at Arizona Cardinals owner Bill Bidwill and understand just how good Rozelle was at marketing the NFL and making certain owners of his day a lot of money eventually) he "borrowed" a business model playbook from a stillborn baseball league. Rozelle was in the league as a Los Angeles Rams employee in the 1950s when the NFL was a part time mom and pop store type operation and there was no evidence that the league would ever be more than a mom and pop store set up.

The National Football League or the initials NFL of the days prior to 1960 and today have just one thing in common — the name or the initials. The one-time David Letterman frequent guest and Pro Football Hall of Fame defensive tackle Arthur J. Donovan (by way of the Grand Concourse in da Bronx) who played for the original Baltimore Colts in 1950, the New York Yankees in 1951, the Dallas Texans in 1952 and the Colts again from 1953-61 (the original Colts, the Yankees and Texans all folded) pointed this out.

National Football League owners had a 12 team league in the 1950s and none of the 12 owners could figure out what to do with their business. Chicago's George Halas and Pittsburgh's Art Rooney along with Bert Bell have been glorified as football deities over the decades, but the truth is that without Lamar Hunt, the game might have strangled itself financially.

There was no forward thinking from Halas, Rooney, the Giants' Tim Mara or NFL Commissioner Bert Bell in those days. They put a shingle up, "Football on Sunday," six times a year for six home games except in Chicago where there were two teams.

Hunt was unable to buy the Chicago Cardinals from the Bidwill family and move the team to Dallas. Bud Adams was unable to buy the Chicago Cardinals from the Bidwill family and move the team to Houston. Neither Hunt nor Adams could get an NFL expansion franchise in Dallas and Houston even though Halas and Rooney chaired an expansion committee starting in 1956. By 1959, Hunt decided he had enough and asked Adams if he wanted to join him in forming the fourth American Football League.

The AFL started play in 1960 and pushed the stodgy old football men into a different business plan, one they never wanted to explore. The AFL went to new cities and had a better TV plan. There were now two leagues and the older National Football League played follow the leader to the new league when it came to television. The AFL was able to sign a contract with the American Broadcasting Company, ABC, with each team sharing revenue equally. The AFL deal technically violated antitrust laws and was not originally a Hunt idea. Hunt borrowed a concept from Branch Rickey who was out of baseball and trying to form a third major league, the Continental Baseball League, and one of Rickey's ideas was for the 12-team Continental League owners to share national TV revenue equally.

Rickey's idea died but there are three living monuments to his league. The New York Mets, the Houston Colt 45s (now Astros) and the National Football League's "leaguethink" business plan.


In 1960, the AFL signed a network contract with ABC for $2 million per year for the first five years, which amounted to $250,000 per team per year. Television income for the AFL averaged about 15 percent less than for the NFL. But the TV income was shared equally as opposed to the NFL where franchises in New York, Chicago and Los Angeles had significant local deals and made much more money than Green Bay. The NFL opened the Chicago market to Halas' Bears by approving the move of the Bidwill family's Chicago Cardinals to St. Louis. The Bidwill family received a half a million dollars from CBS so that the Bidwill's could "purchase a grandstand" from the team's old Comiskey Park home and move it to St. Louis.

But the reality was that the NFL and CBS wanted to show games in Chicago and under home TV blackout rules Chicago had no games on TV as either the Bears or the Cardinals were always home. Bidwill did take a few games to Minneapolis and Buffalo in the 1950s so that CBS could show some Bears games and some Cardinals games could be on TV.

The Bidwill move could have been the precursor to Rozelle's eventual "leaguethink" policy. Bidwill moved for TV purposes but it was not until 1962 that the NFL really became a socialist business.

The old line NFL owners didn't know what to do with TV as late as 1960 and NFL Commissioner Pete Rozelle had to persuade Giants owner Jack Mara, along with the Chicago Bears Halas and the Los Angeles Rams owner Daniel Reeves, that sharing TV revenues instead of having teams have their own networks was economically better for the league. He did just that and got Congress to approve the Sports Broadcast Act of 1961 which allowed the NFL to sell all 14 teams as one to a TV network.

In those days, it was just CBS and NBC.

Rozelle worked out a deal for the 1962 season which brought the 14 NFL owners more than $4 million that year and beyond. In late 1963 Rozelle pitted CBS against NBC in a battle for a long term TV agreement and this is where circumstances came into play. The NFL was in a battle with the AFL for players and control of football and a big money TV deal would give them cash to go after talented players coming out of college. Rozelle signed a big money deal with CBS and William Paley in 1964, and that deal infuriated NBC's David Sarnoff.

Sarnoff wanted revenge.

Sarnoff had worked with Lew Wasserman's MCA where the AFL's New York Jets owner Sonny Werblin was employed. MCA was placing TV shows on Sarnoff's network. Sarnoff and Werblin had a relationship and Werblin became the point guy between the AFL and NBC. Werblin knew TV and entertainment inside out and knew that football was more than just a game play, it was entertainment and it was TV programming. That was not something that was an easy sell to football men who in those days viewed football as a game.

It was easy to understand the football owners’ mentality of the day. Football business operations were open between July and December. In the 1950s, if someone wanted to buy a Chicago Bears season ticket package in April, they would have to hunt down George Halas at his sporting goods store. Nobody protected team logos because no one was thinking of selling t-shirts, underwear and hats with team logos.

Werblin got the deal done with Sarnoff, which brought the AFL $7 million annually that could be split between the eight teams (and eventually nine and 10 teams) between 1965 and 1969. Sarnoff also advanced money to AFL teams so they could sign players out of college, which Sarnoff knew would enhance the AFL on NBC. With some of that money (and revenues Werblin and his fellow Jets owners suddenly got from larger crowds at the new Shea Stadium starting in 1964), Werblin signed Namath to a three-year $427,000 deal, the largest contract ever given to a player at that point.

Namath was going to be the face of the Jets and ultimately the face of the American Football League. The Werblin-Sarnoff connection changed the dynamics of pro football and eventually the two leagues merged with the formation of the Super Bowl as one of the after effects of the June 8, 1966 accord between the warring leagues.


Ironically, Werblin and his partners Leon Hess, Townsend B. Martin, Donald Lillis and Phil Iselin were not interested in joining the NFL because the merger agreement required them to pay the Giants $10 million for "invading" the New York territory. The two leagues became one, their marriage would harden the "leaguethink" socialism mentality but the capitalist NFL owners took $10 million from Werblin's group, another $8 million from the Oakland Raiders ownership for "invading" the San Francisco territory. Rozelle had to buy merger votes in Congress and did so by telling Louisiana Senator Russell Long and Congressman Hale Boggs that New Orleans would get an NFL team if they said yes to the merger.

They did.

The 15 NFL owners pocketed the New Orleans expansion money or fee for entering the league along with expansion payment cut by the owners of the Cincinnati Bengals, a team that joined the American Football League in 1968. The 16 NFL owners split up $7.5 million from a business that was still two years away from joining their league.

Under the merger agreement approved by Congress, the two leagues would combine to form an expanded league with 24 teams, to be increased to 26 in 1968 and to 28 by 1970 or soon thereafter. All existing franchises would be retained, and no franchises would be transferred outside their metropolitan areas.

Under one of the proposals to make sure that the NFL would have monopoly status in each city and to soothe Russell Long and Hale Boggs' feelings, Werblin's Jets franchise would have to be relocated with Namath to Los Angeles. Reeves Rams franchise would move to San Diego with Barron Hilton's Chargers shifting to New Orleans. The Oakland franchise would have ended up in either Seattle or Portland, Oregon.

Werblin never did see his Jets win the Super Bowl as one of the team owners as he was bought out prior to the 1968 season, the year Namath led the Jets to a Super Bowl championship.

Namath's guarantee that the Jets would beat Baltimore in Super Bowl III was the foundation that built the Super Bowl franchise.

Halas last had a real idea in 1925 when he signed Red Grange and put him on tour with the Bears. Grange's appearance before more than 70,000 people at the Polo Grounds in a game against the Giants gave Tim Mara the money he needed to keep the Giants solvent and in business. Rooney was a grand old guy of the game but in the 1950s, his Pittsburgh Steelers franchise was the last stop for a player. If a player was cut by Pittsburgh, his football career probably was at an end. Ironically because of the Werblin-led AFL-NBC TV deal, Pittsburgh eventually was able to spend top dollars on players. Rooney was paid three million dollars to move the Steelers from the NFL to the American Football Conference prior to 1970. Rooney used that money to invest in players and scouting and won four Super Bowls.

The NFL puts the cap on another season on Sunday in Indianapolis, a season that some sports experts thought would never happen because the owners wanted monetary concessions from the players and that an owner lockout would extend into the season. The lockout ended in time for training camp and not only did "leaguethink" survive, Goodell is boasting about the league's "socialism and capitalism" and how the recession may have helped the business of football, a business more aligned with socialism than capitalism.

Evan Weiner, the winner of the United States Sports Academy's 2010 Ronald Reagan Media Award, is an author, radio-TV commentator and speaker on "The Politics of Sports Business." His book, "The Business and Politics of Sports, Second Edition" is available at bickley.com and Amazon.

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