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Pragmatic Capitalism

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When the Egos of Capitalists Ruin a Good Thing….

If you’re American you almost certainly know or have heard about the replacement referee debacle in the USA.  For those who don’t know – well, this is a good old fashioned money problem.  Really, it’s a dispute as old as capitalism.  And the capitalists are bitterly holding out so the labor class doesn’t get more than its supposed “fair share”.  You see, the regular refs are part of a labor union and they think they deserve higher pay and better benefits.  But the NFL’s owners don’t want to be bullied by the labor union because they think the refs are part-time employees who don’t deserve what is essentially amounting to treatment as full-time employees.  I get both sides of the argument.  Most of these refs have full-time jobs.  And the owners don’t feel they deserve full-time treatment.  But the refs obviously disagree and feel that their commitment is worthy of full-time treatment.

But that’s not what this is really about.  This is really about a bunch of egomaniacs.  You see, Roger Goodell, the NFL Commissioner, has become public enemy #1 here.  But he’s just a representative of the real bad guys – the owners.  It’s ultimately the owners who make the decision as to whether or not the refs get what they want.  And these are guys (mostly billionaires) who have done nothing but succeed and win their whole lives.  And they don’t like to get pushed around when it comes to sitting at a negotiating table.  But they’re being foolish here.

The NFL reportedly made $9.3B in revenues last year.  According to various sources that translates into a net profit of about $1.25B (a 13.5% net profit margin).  The refs are asking for about a $10MM per year package according to ESPN.  That’s about $83,000 per referee per year.  Not a bad pay raise.  The average American household who earns a little over $50,000 isn’t shedding a tear for the referees.  But it’s remarkably foolish to see the owners drawing a line in the sand over what amounts to less than 1% of their annual profits.  Unfortunately, they know the position they’re in and they know the power of the NFL.  They know people won’t stop watching or loving the NFL.  So there’s no sense of urgency to get this labor dispute resolved.  And that’s the saddest thing about this whole mess.  As a non-profit the NFL is not really designed to be a competition crushing profit driven machine.  Even though it is.  And by not serving the best interests of their customers (the fans) the owners are confusing their past lives as rampaging capitalists with what the NFL really is – an non-profit entertainment company.  And in forgetting this, they’re explicitly neglecting the league’s mission statement which says:

“To present the National Football League and its teams at a level that attracts the broadest audience and makes NFL football the best sports entertainment in the world.”

The product on the field is suboptimal.  The owners know it.  The refs know it.  The players know it.  And the fans know it. And in allowing that to happen the product is certainly not “the best sports entertainment in the world.”  These owners might be great capitalists in their past lives.  But this league is not the place for your ego and your misguided belief that you need to impose that ego over the NFL’s operations in a way that directly conflicts with its stated goals.  They’re acting like the kinds of capitalists who give the rest of us a bad name.

 

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