Before addressing the unprecedented challenge that the NFL faces with its cherished competitive balance, a word about the actions of NBA players—and others—this week and any applicability, or not, to NFL players.
I was teaching my first sports law/business class of the year, actually lecturing about player rights, when a student let me know that the Milwaukee Bucks players were refusing to play in a display of peaceful protest, four years to the day that Colin Kaepernick first engaged in his peaceful protest. Beyond the timing, however, the symmetry with Kaepernick ends with what happened next. Within two days, NBA players had wrangled action steps from NBA owners, including NBA arenas being transformed into voting centers for the upcoming election. The NBA and its owners not only supported the players but actually instilled themselves as part of the decision, releasing a joint statement with the NBA Players Association about postponing the games. They acted in ways that NFL owners did with Kaepernick’s movement, even to this day.
NFL owners certainly supported their players following the President’s “sons of bitches” remark about Kaepernick, locking arms with players for a week in October 2017. After that brief display of solidarity, however, owners wanted to “stick to sports” and found that mixing politics was not good for business.
NFL players are feeling the same emotions and anger that NBA players are and, so far, their teams and the league have supported open discussion and missed practices. But this is training camp; my strong sense is that the NFL and its owners are not as progressive as NBA owners, and will not be as forgiving going forward. And while impactful NFL players are suggesting possible absence from games when they start soon, those actions that will not be as smooth with the NFL as what just happened with the NBA.
To be fair, the NFL has worked with the Players Coalition in funding social causes and has been supportive to social justice causes throughout this polarizing summer. And there are reports of players being allowed to have names of victims of police brutality on the foam in the back of their helmets. But we are still hearing about “listening” to Colin Kaepernick four years into this, shouldn’t the listening have happened a long time ago?
If history is a guide, the NFL will soon revert to “sticking to sports.” The business of the NFL usually wins.
Foundation: Competitive Balance
Competitive balance is a mantra for all American professional sports leagues, and none more than the NFL. Since inception, the league has operated under the premise that it is only as strong as its weakest link and teams are partners toward the greater good (or the greater gold).
Competitive balance is baked into the league’s operations, with systematic features such as the following:
Drafts allow the selection of college players, favoring unsuccessful teams based on results from the previous season, with a goal of improving competitive balance. And the NFL not only restricts where its rookies play, but also when they can play: They must be three years removed from high school (as many do not know, this is an NFL rule, not an NCAA rule).
Imagine other professions using a draft. What if the top lawyer from, say, Stanford Law School was sent to the worst community of lawyers in the country or the top engineer from, say, MIT was sent to the worst community of engineers in the country? It sounds preposterous, but in the NFL it is accepted and promoted, all in the name of competitive balance.
Salary caps set artificial limits—both floors and ceilings—on collective pay for players in order to level the financial playing field toward greater competitive balance. The cap has proven to regulate team spending, with the gap between the highest- and lowest-spending NFL teams at roughly $50 million. To put that in perspective, in Major League Baseball, a league without a cap, that disparity is roughly $200 million.
Free agency restraints
A “normal” person is a free agent when they are no longer contractually committed to their prior employer. In the NFL, a player who gets drafted must wait four seasons to become a free agent, after their rookie contract expires. Why? Again, to try to level the talent pool in the name of—you guessed it—competitive balance.
This separates the NFL from other leagues more than anything else. All NFL teams receive a league distribution of almost $300 million of national revenue, primarily media, before earning one penny of local revenue. With this feature, a team like the Packers in tiny Green Bay, Wisc., where I worked for a decade, could not compete with exceedingly larger markets. Revenue sharing is integral to the competitive balance of the league.
As the NFL prepares to play through a pandemic, COVID-19 is posing a formidable challenge to its competitive balance in one important area: fan attendance.
Most teams have announced that they will have no fans for the early part of the season, with a couple already announcing no fans for the entire season. That is understandable as again, we are smack dab in the middle of a pandemic that has claimed 175,000 lives. Everything is fluid at this point but, according to reports from ESPN and the Boston Globe, here is where things stand as of this writing:
Teams having fans (3):
• Cowboys (potentially up to 50% of capacity)
• Chiefs (22% of capacity)
• Dolphins (20% of capacity)
Teams hopeful of having fans for the opening game, depending on government restrictions (5):
Teams that have ruled out fans for the entire 2020 season (2):
Teams that will have no fans until further notice:
• The 22 other teams
No matter the fact that no team will have even close to a full stadium, there is some level of advantage to “some fans” compared to no fans. The teams with fans will benefit from real people (not cut-outs) and real noise and energy (not piped in) brought to the competition. And the imbalance is not going unnoticed; NFL coaches such as the Bills’ Sean McDermott have angrily pointed out the inequities.
I find it a bit curious that the NFL is allowing its owners to let this to happen without intervention. The league regulates minutiae such as how high players’ socks are worn and whether their jerseys are tucked in. The commissioner has intervened, in the name of integrity and competitive balance, on issues involving personal conduct, steroid use and, of course, PSI for footballs. But not for attendance uniformity? Teams have understood that, while there are multiple challenges of playing through a pandemic, every other team is facing those same obstacles. Until now.
Perhaps the reason that Commissioner Goodell is abstaining is simply deference to his true constituents, the owners, who are looking under every rock for revenue sources in this challenging season. And perhaps that is why the union is not making any noise about this competitive imbalance, as they know any revenue from tickets is a good thing for the 2021 cap.
Readers of this space know that as much as the commissioner is the face of the league, the owners are the decision makers. If the owners collectively wanted Goodwill to issue an edict that no team should have fans, he would have done so already. Absent that, Goodell is not going to tell Jerry Jones or other owners that they cannot have fans if their municipality allows it. If Goodell were to try to do so, well, good luck with that.
Which, of course, leads to the real mantra about the NFL: The business of sports always wins.