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I Don’t Understand the NFL’s Business Decision

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The NFL has made a business decision to alienate a large number of it’s customers. These leaders in the sports entertainment business have suddenly decided that instead of being entertainers they want to be social commentators.

The ongoing protests for and against the NFL are very emotional and because of that folks are reluctant or unable to discern the truth.

At the end of the day the bottom line is that the NFL is a business. A business that has chosen to alienate a significant number of its customers.

I don’t understand it.

This isn’t an argument over the validity of the protests. Never has been, and thinking people shouldn’t believe it. This is about an entertainment business deciding how best to please its customers. Period.

The fact that anyone would value the opinion of an entertainer boggles the mind. We see it in the sports world, movie business, tv stars and talk radio announcers, but it makes no sense. These are entertainers.
Back in the very olden days, they were the so called “court jesters.” Providing entertainment and relief for a hard day. I can’t for the life of me picture the King of England asking, “well jester, should I invade France” or things like that. We all need to get off the “we value entertainer’s opinions” band wagon.

The NFL team owners are virtually all billionaires. Successful businessmen in their own right, somewhere along the line they learned how to create a product that customers wanted, liked and were willing to pay for. Of course this only applies to the 50% of the owners who bought their teams – half of the teams are inherited!

Now it seems that they have fallen into a trap of thinking that football is a game versus it being the business that it is.

Why would the owners of these teams allow their employees to take actions as representatives of the team that would offend people? Every employer has rules of acceptable conduct that its employees must adhere to while at work or when representing the organization. Can you imagine the Republicans or Democrats hiring someone who advocated for the other party? A church hiring a spokesman who advocated for atheism? Why the NFL and why now?

Playing the National Anthem at sporting events is nothing new. It started in 1862 in Brooklyn. It was sporadic at the time due to having to hire an actual band to play it and that was expensive. During WWII, it became a regular occurrence due to the invention of loud speakers and recordings.

In the 1950s and 1960s playing the anthem wasn’t universal, with some teams deciding not to do it at all. They thought that the frequency of playing it diminished its impact. When the Vietnam War started, it became universal again.

The NFL has never required players to stand for the anthem, but does recommend it. In fact until 2009, the anthem was played before the players came out on the field.

What happened to these businessmen in 2009 to make the business decision that the players come out and stand for the playing of the anthem? None of us will ever know for sure, but starting in 2009 the Department of Defense starting funding “paid patriotism” with direct funding to teams to promote patriotic events. A joint oversight report in 2015 revealed that the Department of Defense had paid more than $5.4 million to 14 NFL teams to promote patriotism between 2011 and 2014.

The NFL returned $723,734 to the Federal Government.

How does the NFL make it’s billions of dollars annually? TV revenue makes up the majority of their income. CBS, Fox, NBC, ABC, ESPN, you name it, pay for the rights to televise the games. ESPN alone pays $1.8 Billion a year just for Monday Night Football! The second largest amount of revenue comes from league marketing. Finally, they sell a lot of gear and equipment. Ticket sales oddly enough don’t go to the teams (regular season tickets). The sales amounts go to the NFL and are divided equally.

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The ongoing protests for and against the NFL are very emotional and because of that folks are reluctant or unable to discern the truth.

At the end of the day the bottom line is that the NFL is a business. A business that has chosen to alienate a significant number of its customers.

I don’t understand it.

This isn’t an argument over the validity of the protests. Never has been, and thinking people shouldn’t believe it. This is about an entertainment business deciding how best to please its customers. Period.

The fact that anyone would value the opinion of an entertainer boggles the mind. We see it in the sports world, movie business, tv stars and talk radio announcers, but it makes no sense. These are entertainers.
Back in the very olden days, they were the so called “court jesters.” Providing entertainment and relief for a hard day. I can’t for the life of me picture the King of England asking, “well jester, should I invade France” or things like that. We all need to get off the “we value entertainer’s opinions” band wagon.

The NFL team owners are virtually all billionaires. Successful businessmen in their own right, somewhere along the line they learned how to create a product that customers wanted, liked and were willing to pay for. Of course this only applies to the 50% of the owners who bought their teams – half of the teams are inherited!
Now it seems that they have fallen into a trap of thinking that football is a game versus it being the business that it is.

Why would the owners of these teams allow their employees to take actions as representatives of the team that would offend people? Every employer has rules of acceptable conduct that its employees must adhere to while at work or when representing the organization. Can you imagine the Republicans or Democrats hiring someone who advocated for the other party? A church hiring a spokesman who advocated for atheism? Why the NFL and why now?

Playing the National Anthem at sporting events is nothing new. It started in 1862 in Brooklyn. It was sporadic at the time due to having to hire an actual band to play it and that was expensive. During WWII, it became a regular occurrence due to the invention of loud speakers and recordings.

In the 1950s and 1960s playing the anthem wasn’t universal, with some teams deciding not to do it at all. They thought that the frequency of playing it diminished its impact. When the Vietnam War started, it became universal again.

The NFL has never required players to stand for the anthem, but does recommend it. In fact until 2009, the anthem was played before the players came out on the field.

What happened to these businessmen in 2009 to make the business decision that the players come out and stand for the playing of the anthem? None of us will ever know for sure, but starting in 2009 the Department of Defense starting funding “paid patriotism” with direct funding to teams to promote patriotic events. A joint oversight report in 2015 revealed that the Department of Defense had paid more than $5.4 million to 14 NFL teams to promote patriotism between 2011 and 2014.

The NFL returned $723,734 to the Federal Government.

How does the NFL make it’s billions of dollars annually? TV revenue makes up the majority of their income. CBS, Fox, NBC, ABC, ESPN, you name it, pay for the rights to televise the games. ESPN alone pays $1.8 Billion a year just for Monday Night Football! The second largest amount of revenue comes from league marketing. Finally, they sell a lot of gear and equipment. Ticket sales oddly enough don’t go to the teams (regular season tickets). The sales amounts go to the NFL and are divided equally.
In 2016 teams received their share of the NFL takings and it was about $250 million. The salary cap for 2016 was $155 million. Teams make almost $100 million if no one ever came to a game or watched it on tv.

Individual teams make more money from parking fees, concessions, rental on the VIP booths, brochures, etc.

So, why have these billionaire owners made this business decision at this time?

Well, in the short term it won’t hurt them financially very much. TV deals and advertising deals are long term contracts. As we’ve seen with ESPN losing viewership and advertising income, in the short term it only hurts the stock holder (Disney), not ESPN. We could all stop watching it tomorrow and the networks would still be paying the NFL.

The NFL players union contract runs out in 2020. The players union get’s a percentage of the income that the NFL takes in, and the salary cap is predicated on income. If the owners wanted to improve their negotiating position, they may be trying to lower the income in the short term to increase their profits in the long term.

Of course there is always one more option. They might just be making a very stupid and arrogant mistake.

Comments (1)

  • The NFL is a large corporate business, the US has a lot of large corporate businesses. All these corporations have lobbyist that influence the government, it doesn’t matter which side is in the drivers seat as the system is set up to influence both parties.
    The current Executive branch leader/group is not (really) part of either of the normal two party systems.

    It looks to me that Corporate America (the one that the Supreme Court gave civil rights to) does not want someone sitting in the White House who is not part of the game.

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