NFL v Premier League: Socialism v Capitalism in sport format

by Roger Domeneghetti

Whisper it (just so you don’t upset Sarah Palin and her Tea Party chums) but there’s a small corner of good ol’ America that’s looks a bit, well; socialist and that would be the NFL.

With the ‘S’ word being so divisive over the other side of the pond, the debate about the NFL rears its ugly head every six months or so with right wing political pundits desperate to protect the sport’s good name (let’s face it, nothing could be more American than Gridiron) and their opponents (sneeringly derided as ‘liberals’) predictably taking the opposite viewpoint.

Certainly at first glance American football couldn’t be more socialist, particularly when compared to the Premier League, which by contrast is rampantly capitalist.

In general terms socialism is defined as a political or economic system, based on the belief that all people are equal and so should share in the wealth of the country equally. In short it is based on co-operation whereas capitalism advocates competition – companies succeed or fail dependent on the quality of the product they produce and the price they can sell it at.

NFL v Premier League

OK, the NFL and the Premier League aren’t true economies; they’re businesses which exist within and draw upon much larger economies but that aside the metaphor holds up pretty well.

The business practices of the NFL introduced by Commissioner Pete Rozelle in the Sixties clearly contradict the tenets of free market capitalism. After his persuasion, the clubs’ owners agreed to split TV revenue equally, something enshrined by a bill passed through congress (I think the Daily Mail would refer to that as the ‘nanny state meddling’).

The draft system was also introduced, which sees the worst performing teams getting to choose the best young players ahead of the following season and in 1994 when it seemed that those measures weren’t enough to guarantee equality and competition, the league introduced a strictly-enforced salary cap with harsh penalties for any breach.

By introducing these rules, the NFL has created an environment of both greater on-field competition than in the Premier League and one in which franchises are financially far healthier than English clubs. In the 18 seasons from the start of the Premier League in 1992/93 only four clubs have won the title and just six of the 14 teams to have contested an FA Cup final have lifted the trophy. By contrast in the same period the NFL has seen 21 of its 32 teams appear in the Super Bowl with 12 of them running out winners.

Despite being the wealthiest football league in the world, clubs at all levels of the Premier League regularly post losses. Earlier this year, Manchester United’s parent company announced a loss of £109m and Newcastle recently announced a £33.5m loss for 2009/10 (down from £37.7m the season before). Even Arsenal, arguably the most financially well-run Premier League club, posted a loss of £2.5m between May and November 2010.

Again, by contrast, in August last year figures for the previous season revealed just two of the NFL’s 32 teams made a loss – Detroit Lions (who lost $2.9m) and the Miami Dolphins (who lost $7.7m) and the average value of a franchise was $1.02bn. Golly, maybe there’s something to be said for this socialism thing after all.

However, it’s only fair to acknowledge that the Premier League does a couple of socialist things itself. The league does collectively negotiate over TV revenue and while it’s not evenly distributed this is a much more equitable process than in say, La Liga, where the clubs sell rights individually and, predictably, Real Madrid and Barcelona hoover up most of the available cash. Furthermore, the Premier League gives handouts in the form of parachute payments to relegated teams – £16m for the first two seasons after the drop and £8m for the two after that. Blimey, that’s almost like a welfare state and income support, although this in itself creates a competitive imbalance within the Championship.

Across the pond cracks are appearing in the socialist utopia of NFL where a dispute between the teams and players is in danger of scrambling the golden egg. NFL owners are complaining that the salary floor and ceiling (based on the players receiving no less than 56% of revenue and no more than 60%) is too high. This led, ironically, to last season being uncapped and next season possibly starting with a player lock-out.

Perhaps the NFL bosses should take a look at football where UEFA recommend a wage-to-turnover ration of 70%. Of course, English clubs aren’t going to let a bunch of foreigners tell them what to do and regularly go over this. Last season Newcastle posted a ratio of 90.6% (up from 82.6% the previous season) and according to their 2009 accounts, Burnley had an arse-clenching wage-to-turnover ratio of 119.9%.

With Premier League clubs creaking under the weight of huge debts and the NFL in danger of messing up a system that has worked so well for so long, there are surely lessons to be learned on both sides of the Atlantic. As that great sports fan, Vladimir Lenin once said: “you’re only as strong as your weakest link”.

Roger Domeneghetti is a contributor to Just Football and editor of the blog Who ate all the goals.

English Premier League, Football and Finance, Politics and Society, USA