Chapter 2 The Economic Structure of the NFL John Vrooman We are a bunch of fat cat Republicans who vote socialist on football. Art Modell, former owner of the Cleveland Browns/ Baltimore Ravens Asserting that a single team could produce a game is like a Zen riddle: Who wins when a football team plays itself? American Needle, Inc. v. NFL, et al. 538 F.3d 736 (7th Cir.2009). 2.1 Introduction 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 egali- tarian. In 2010 NFL clubs pooled and shared two-thirds of over $8 billion in reve- nues 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. J. Vrooman (*) Vanderbilt University , Nashville , TN , USA e-mail:
[email protected] K.G. Quinn (ed.), The Economics of the National Football League: The State of the Art, 7 Sports Economics, Management and Policy 3, DOI 10.1007/978-1-4419-6290-4_2, © Springer Science+Business Media, LLC 2012 8 J.