Baseball may still claim the title “America’s Pastime,” but professional football is America’s favorite sport. NFL games draw tens of thousands of fans to stadiums. Millions more watch it on television. Its championship, the Super Bowl, is its showcase event and Super Bowl Sunday has become an unofficial national holiday. Simply put, football is America’s sport and the National Football League is America’s league.
Mark Yost has written a book entitled “Tailgating, Sacks, and Salary Caps: How the NFL became the most Successful Sports League in History” in which he tells the story of how the NFL grew from a collection of mostly Midwestern teams to the glittering jewel on the sports landscape. He describes its roots, its cooperative structure, its growth in marketing, and its labor issues.
The NFL, like any league, is a collection of teams and its primary officials are the team owners. The growth and subsequent success of the NFL, Yost argues, is due to the cooperation, and cartelization really, that team owners have used over the years. From the development of the revenue-sharing system to the abandonment of local television contracts in favor of the national television contract, NFL owners, more often than not, give up some autonomy for the good of the game.
Yost details the collective strategies that have led to the success of the NFL: the successful courting of female fans, in part due to acknowledging players’ sex appeal, and the appeal of fantasy football; the Sports Broadcasting Act, the 1961 federal law that gave owners legal backing to act as a cartel in negotiating national television contracts, and the subsequent development of the NFL on television over the years; the philosophy that drives NFL merchandising gets into the act: the standardized style of the clothes that members of the coaching staffs wear. The clothes only differ in the colors and the logos. Standardization and collectivization: it’s all for the good of all in the league.
An interesting exception to this collective strategy comes, oddly enough, from the NFL’s revenue sharing system. In this system, the most generous of the four major American sports, 60% of locally-generated revenue is put into a kitty and the kitty is then shared equally with all teams. But an exemption exists for “luxury suite” revenues. These revenues are not subject to revenue sharing and team owners give their blessing to their fellow owners to actively search for such revenue streams. Indeed, the NFL’s brand of revenue sharing was actually a driving force in the new stadium boom of the 1990s.
Yost gives ample space to some of the more colorful owners in the NFL – such as the Washington Redskins’ owner Daniel Snyder. Mr. Snyder may be derided by some, but he is a shrewd businessman who realizes that to have a successful business, you need to serve your customers well and to provide them with value. Yost describes Snyder’s implementation of the “Tap and Go” payment system in which the process of buying refreshments is sped up. Instead of paying with cash, check, or credit card, fans pay for concessions by sweeping a keychain fob across a reader. By speeding up the payment process, the use of the Tap and Go system has helped Snyder increase concession sales and has helped drive the value of the Redskins to more than $1 billion. Snyder, like any good businessman, found a way that could serve fans better and he profited from it.
Yost writes from the point of view of a journalist, telling stories based on interviews with NFL officials, fans, and those who study sports. He steers away from formal modeling and hard statistical analyses features that some readers may not prefer but others will embrace. This does not mean that the book is bereft of analysis and data. Indeed, it is a well-researched book. Sports economists will recognize many familiar names mentioned in the book, including TSE’s own King Banaian.
Overall, Yost has produced a well-written and readable book. Yet some passages will undoubtedly cause some to be left wanting for more. For instance, Yost argues that because it makes playing talent more affordable for all teams, the salary cap system has been a driving force in the league’s growth. But the discussion seems incomplete. Salary caps are, in essence, a ceiling on payrolls. If a team wants to sign a player but that player puts the team over the cap, the team has an incentive to find a way around the salary cap. Yost recognizes this but doesn’t fully explain why the type of salary cap used by the NFL has worked nor does he present evidence that it has worked. A similar thing can be said of the discussion of the NFL draft.
The book also contains little about the enforcement mechanisms that keep the cooperation between owners humming along. There seems to be a classic prisoners’ dilemma-type story somewhere to be told: business owners form cartels and choose not to compete against one another, increasing the profitability of the group. This creates an inefficiency that is screaming to be exploited. To stabilize any cartel, there must be an enforcement mechanism in place. Yost does write about the mavericks in the group of owners, Dan Snyder, Jerry Jones, and Oakland Raiders owner Al Davis most notably, and he does a good job of describing the business acumen of the mavericks. Yost also notes the friction between these owners and others in the league. Yost does discuss some of the frictions between the owners that were at the heart of the most recent negotiations over the NFL’s collective bargaining agreement. But there seems to be an untold story about how the rest of the owners have been able to keep the mavericks corralled over time.
The copy I received was an advance review copy and it was a little rough around the edges. My guess is that the typos and other rough edges have been cleaned up by now. Even taking this in mind, Yost has produced a well-researched, well-written, and readable story of how the NFL has been shaped into the power that it is today.
