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The Super Bowl: America's Pinnacle of Socialism

By Dan Weil

Updated on: February 4, 2011 / 4:34 PM EST / MoneyWatch

America is getting ready for its annual celebration of the Super Bowl, but behind the scenes the National Football League is at a financial impasse. League owners and players can't agree on how to split up the $9 billion in revenue the league takes in each year.

The league's current collective bargaining agreement expires March 4. If the two sides can't reach an accord before next season, owners may decide to lock out the players -- or the players may go on strike. And we'll all have the league's fascinating experiment in socialism to blame.

Football: America's most socialist sport
Pro football is by far the most socialist of U.S. team sports. The NFL shares about 70 percent of its revenue equally among the league's 32 teams. (By contrast, Major League Baseball, the NBA and the NHL share less than 30 percent of revenue that way.) But that doesn't mean all the owners are happy with that arrangement.

Andrew Zimbalist of Smith College, the dean of sports economists, has a fascinating take on the conflict in Sports Business Journal (subscription only) in which he details the ways the NFL works to equalize outcomes among its teams:

In addition to extensive revenue sharing, the NFL employs a hard salary cap, a reverse-order draft, a jiggered schedule and free agency signing rules to promote parity across the teams.... No other professional sports league in the world comes close.

The Soviets should have been so lucky. And unlike the Soviet Union's socialism, this economic policy really does promote equality. In the last 10 years, the NFC sent a different team to the Super Bowl every year.

Unwelcome calls for perestroika
But owners of large-market teams think they're giving away too much to their smaller brethren. So they're calling for the generous socialism to be cut back (perestroika, anyone?). Not surprisingly the small-market owners disagree. Which has led both groups to look for savings elsewhere.

"When sports team owners can't agree on dealing with one another, it is not uncommon for them to seek concessions from the players," Zimbalist notes. And so the NFL owners have asked for an 18 percent decrease in the revenue base upon which the salary cap is determined -- in effect, of course, lowering the cap.

Solving corporate problems on the backs of labor is the American way, of course. But it gets better. "The 18 percent salary shave is to come principally in the form of greater player contributions to the owners' increasing stadium costs," Zimbalist writes. Perhaps that's insurance against the possibility that municipalities will become less generous in subsidizing the costs of new stadiums. Far be it for the owners to be responsible for their own costs of capital.

Football is in many ways the country's most conservative sport. If you asked team owners, surely all would call themselves free-market capitalists. Yet they have been the beneficiaries of an industry perhaps more socialist than any other in the country. Forbes estimates that the average NFL team is worth $1.02 billion and garnered operating income of $33 million last year. Citigroup (C) and General Motors (GM) must be jealous.

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Image via Flickr user Sister72, CC 2.0