By Ken Reed
The Huffington Post
January 20, 2016
While watching the recent NFL relocation charade involving the Rams, Chargers and Raiders play out, I was reminded once again that the fundamental problem in professional sports is that each sport is a self-regulated monopoly. Our pro sports leagues — and the franchise owners within — have basically been given free reign in the United States.
As a result, our old friends ego and greed are driving policymaking and decision-making in pro sports. A profit-at-all-costs (PAAC) mentality is at the root of virtually every action taken by pro sports owners. The results are seldom pretty for fans.
Consider that despite the fact the Rams have been playing in a fully functional domed stadium paid for by the taxpayers of St. Louis — one which taxpayers are still paying for — the Rams have apparently decided to move to greener (as in money) pastures in Los Angeles.
The Rams are leaving St. Louis while local citizens still owe more than $100 million in debt on the bonds used to build the sports palace the team has been making huge profits in.
This isn’t uncommon, as sports journalist Dave Zirin points out.
“In the United States, we socialize the debt of sports and privatize the profits,” says Zirin.
NFL owners (and those in our other major professional sports leagues) are unencumbered when it comes to their cartel practices. They do not have to deal with the checks and balances of an open marketplace, or the oversight of public regulation agencies, as do other monopolistic industries in the United States.
It’s a system that needs changing. Our top priority should be the concerns of the millions of fans that have made the NFL so popular, not the greedy concerns of a few billionaire owners.
There is a better way, and there is an example in place.
“The self-regulated monopoly system in pro sports — including anti-trust exemptions — allows owners to pursue a profit-at-all-costs agenda at the expense of fans,” says consumer advocate Ralph Nader.
“This system has resulted in owners playing one city off another in the quest for new taxpayer-funded stadiums and other freeloading. A community ownership model, like the Green Bay Packers’, works. It’s a better way to structure and administer professional sports. It should become an optional mainstay of sports policy in this country.”
The best town in pro sports is also the smallest: Green Bay, Wisconsin, home of the Packers.
The Green Bay Packers are owned by the fans, not a wealthy owner/corporation operating with a PAAC philosophy. The Packers are a publicly-owned non-profit with a unique stock ownership structure.
The team issued stock to the public in 1923 in order to stay afloat as a franchise. Ownership pays no dividends and doesn’t provide any other perks. (Most notably, there aren’t any game ticket privileges!) The Packers have conducted a few additional rounds of stock sales since 1923. Today, the franchise has 112,158 shareholders who own 4.7 million shares. Most shareholders live in the Green Bay area, or at least the state of Wisconsin, although there are no residency requirements. Nevertheless, all profits are invested back into the team, and as a community-owned franchise, the team won’t be leaving Green Bay.
Green Bay’s bylaws state that the Packers are “a community project, intended to promote community welfare.” What a refreshing concept.
“It makes them an example,” according to sports and culture writer Patrick Hruby. “A case study. A working model for a better way to organize and administer pro sports.”
What would the NFL have looked like if every franchise had been owned through a Packers-like model since 1960?
“The upshot?” asks Hruby.
“Had the Baltimore Colts’ ownership structure been similar to Green Bay’s, they never would have left in overnight trucks for Indianapolis. The Cleveland Browns never would have left for Baltimore. The Seattle Sonics never would have jetted to Oklahoma City.”
And today, fans in St. Louis, San Diego and Oakland wouldn’t be worried about losing their teams to other cities.
Yes, the reason St. Louis had the Rams in the first place was because the franchise left Los Angeles to come to St. Louis to play in St. Louis’ new taxpayer-financed stadium. But the reason St. Louis citizens had to build the new stadium was to lure an NFL franchise back to town after the Cardinals packed up and left St. Louis for Arizona.
It’s a crazy system, one that screws football fans and taxpayers and only benefits a handful of billionaire franchise owners.
The Green Bay model is a better way.
“Green Bay is a dangerous example for [sports] owners,” contends Zirin. “Because the franchise proves the argument for public ownership in practice.”
Michael N. Danielson, in his book Home Team: Professional Sports and the American Metropolis, writes:
“Professional team sports in the United States and Canada have always been rooted in places. Major league teams have fostered close identification with the urban areas where they played, and sports fans are primarily interested in the fortunes of their home team…”
Due to the close identification a city’s fans have with their local teams and the prestige and civic self-esteem that pro sports franchises can sometimes bring a community, the stakes are high for cities when they play the “pro sports game.” Cities compete for the limited number of pro sports teams available. They fight to acquire sports franchises and make a concerted effort to protect the ones they currently have.
“Threats to relocate arouse public concern largely because of the emotional and symbolic connections between teams, places and people,” according to Danielson.
As a result, for the last half-century, pro sports’ wealthy owners have taken advantage of the economic and political advantages we’ve given them as a society, along with the loyalty and close identification fans have with pro sports franchises, to secure new sports palaces with little out-of-pocket expense on their part.
The clear answer to this situation is community ownership. However, decades ago, pro sports owners recognized the threat that community ownership represented to their golden goose and took steps against community ownership.
In fact, in the NFL, former commissioner Pete Rozelle changed the NFL constitution in 1960 in order to prevent another Green Bay Packers ownership situation. Article V, Section 4 of the NFL constitution, also known as the “Green Bay Rule,” says that “charitable organizations and/or corporations not organized for profit and not now a member of the league may not hold membership in the National Football League.”
The NFL owners have said no to community ownership because they can. They’re free to establish any policies they like, and they like their “no community ownership” rule because it benefits them financially, local fans be damned. They’re a self-regulated monopoly; blessed by our government with great profits. (Who has a better deal in America than NFL owners?)
It stinks for pro sports fans. Congress needs to step in and rectify the situation. Lord knows the NFL’s self-regulated, greed-driven owners won’t do it on their own.
Ken Reed is Sports Policy Director for League of Fans.
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League of Fans is a sports reform project founded by Ralph Nader to fight for the higher principles of justice, fair play, equal opportunity and civil rights in sports; and to encourage safety and civic responsibility in sports industry and culture.
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