Is the NFL a monopoly?

[Enter Apotheosis]

Yeah, but when I look at the prices whether it's a gallon of gas or the price of a hotel or the cost of a car... there's such similarity in price... now, we can say the market set that price, but did the market really decide that a comic book should be 5 bucks (or whatever it is today) and if Marvel decides that why does DC and all the others price equally. I think there's a heck of a lot more collusion then we care to acknowledge.

You have to be competitive with your pricing to succeed as a business, particularly if you're offering a product or service whose quality is similar to that of your closest competitors. That is more or less a natural part of the free market and is very different from collusion.

To sum it up nicely:

Collusion occurs when you have businesses team up to purposefully screw the consumer and maximize profit.

Competitive pricing is the result of businesses not wanting to be screwed by each other while maximizing profit.

Could DC and/or Marvel decide to drop the price on their comic books by a few bucks? Absolutely. Is it in their best interest to ignite a price war that would undoubtedly damage the bottom line for both companies? Absolutely not.

Yeah, butI recently had to buy some USB cables... they have about 50 cents in materials in them and yet every company chose to charge about 20 bucks for the cable. You would think if there wasn't "collusion" one company would decide to go for less profit and pick it up on the volume.

There isn't collusion in that market, you simply failed to do your due diligence as a consumer. Never buy accessories from major chains, they generally try to sell their bigger ticket items at a lower margin of profit and then make up for that lower margin by nailing you on all the little things you want or need to have to go with your shiny new TV/PC/whatever. The practice is widespread because the practice is successful and businesses do have a tendency to imitate each other's successes.

Next time go to a smaller retail outlet like MicroCenter or order online from Newegg, Amazon, or Monoprice.

[Hubbs]

You can have competition and still be a monopoly. There are two elements of a section 2 violation of the Sherman Act: (1) monopoly power and (2) anticompetitive conduct. Monopoly power is basically your share of the market, so in this case, the NFL has a vastly larger share of the professional football market compared to the UFL and Arena. However, you could also make a legit argument that the NFL competes with college football as well, and in that case, the NFL's market share would be a lot smaller. As for the conduct element, I'm not really sure if they have done anything anticompetitive to either the UFL or the Arena League, but their behavior towards the players in this lock out could be legitimately argued as anticompetitive since the players have pretty much no where else to go to in order to make a living. It should be interesting to watch all of this play out from a legal standpoint.

I'm not sure you can say the NFL competes with college ball when A) players lose college eligibility after declaring for the draft, and the NFL and NCAA seem to cooperate so as to specifically not compete with each other (no NFL games on Saturdays until the college season is over, for example).

[Tulane Skins Fan]

I'm not sure you can say the NFL competes with college ball when A) players lose college eligibility after declaring for the draft, and the NFL and NCAA seem to cooperate so as to specifically not compete with each other (no NFL games on Saturdays until the college season is over, for example).

You are sorta missing out on what the competition is for... its not for more players, its for the money from the fans. The truth is that there is some competition between the NFL and the NCAA for people's money. If you have 2000 to spend on sports entertainment, you can't buy both redskins season tickets and Maryland football season tickets. They are competing for fans to buy their product, i.e. football (college or pro).

So, if you think about it, every person has a certain income allotment for entertainment. Whether that be sports, opera, actually playing sports, movies, etc. etc., every person has some finite amount of money. And each of the leagues are competing with each other for that money, and with college, and in some respects with the opera, etc.

So, again, it really comes down to how you define the market. If the market is "pro football," then yes they have a monopoly. If the market is "entertainment," then no, of course, they don't. If its somewhere in between, then well, the answer is somewhere in between.

[worstSeat]

Were there other telephone service providers when AT&T was split up into the baby bells? Absolutely.

That said, the real issue is that the 32 teams are colluding. It's not a free market. You can't go from playing for Cincinnati to playing for Minnesota because you want to, or for every player on DC's team to make $15 million a year. The owners have colluded -- and admit as much -- to keep salaries down and to limit labor's movement from company to company. They've put a cap on salaries. Imagine that at Google or Exxon.

The kicker is that labor was in on the colluding and gave away their rights to go to court. Once the union was gone, calling the NFL an, at best, oligarchy is pretty easy to do.

---------- Post added March-30th-2011 at 06:54 PM ----------

Could DC and/or Marvel decide to drop the price on their comic books by a few bucks? Absolutely. Is it in their best interest to ignite a price war that would undoubtedly damage the bottom line for both companies? Absolutely not.

...

There isn't collusion in that market, you simply failed to do your due diligence as a consumer. Never buy accessories from major chains, they generally try to sell their bigger ticket items at a lower margin of profit and then make up for that lower margin by nailing you on all the little things you want or need to have to go with your shiny new TV/PC/whatever. The practice is widespread because the practice is successful and businesses do have a tendency to imitate each other's successes.

Can you have it both ways? Best Buy, Wal-Mart, and HH Gregg all keep cable costs high. Are there really enough players not to argue the same sort of implicit collusion? Not quite the same as DC/Marvel, but close enough to keep the point.

I guess the difference is substitution value, right? That is, a Monoprice cable is often as good as if not better than the Monster cable or whatever you're paying 10x the price for. Dark Horse ain't exactly got Spider-Man.

Next time go to a smaller retail outlet like MicroCenter or order online from Newegg, Amazon, or Monoprice.

Monoprice FTW.

---------- Post added March-30th-2011 at 06:55 PM ----------

So, again, it really comes down to how you define the market. If the market is "pro football," then yes they have a monopoly. If the market is "entertainment," then no, of course, they don't. If its somewhere in between, then well, the answer is somewhere in between.

Huh? It's not a company-customer monopoly with the NFL. It's a company-labor force monopoly. Where else can I be a pro football player and get anything close to fair value?

[Darth Tater]

Monopoly MUST either have coercive power (only governments or those they delegate to have this) or be the only game in town given no practical alternative and the product or service provided is a necessity (like food and water).

[allannis]

In many NFL-monopoly articles I've read over the years, the anti-trust exemption is also needed to restrict team movement. In the eyes of the courts, if the NFL are 32 businesses, they cannot restrict one another from relocating to another location if they choose to do so.

They are frachises, therefore there are franchise agreements. Same as for a fast food restaurant or other type franchise, the franchiser has a say where the franchisee can locate.

[MarkB452]

I don't think so. I've been all over FedEx field and I can't find any place that says "Free Parking".

[worstSeat]

Monopoly MUST either have coercive power (only governments or those they delegate to have this) or be the only game in town given no practical alternative and the product or service provided is a necessity (like food and water).

I may be missing your being tongue in cheek, but if not, somebody needs to forward your post to Hasbro, because man, they've been doing it wrong for 75 years.

---------- Post added March-31st-2011 at 01:21 AM ----------

I'll acknowledge it, but seeing we are in the stadium I'll leave it at that.

But that's the whole point, isn't it? The owners and the players' association acknowledged the collusion. That's why it wasn't collusion.

[LD0506]

Not to nitpick but this ought to be whether or not they are a cartel instead of a monopoly. The end result is the same in many ways but it allows teams to preserve the fiction of separate entities better. There is collusion between the owners vs players, price fixing on merchandise, etc., but football is deemed a "special case" by a lot of guys that are fans of the game and even bigger fans of the really rich guys that own them. The same way that stars distort spacetime with their gravity, enough money and media attention distort economic realities and the rules governing them.

[worstSeat]

Not to nitpick but this ought to be whether or not they are a cartel instead of a monopoly. The end result is the same in many ways but it allows teams to preserve the fiction of separate entities better. There is collusion between the owners vs players, price fixing on merchandise, etc., but football is deemed a "special case" by a lot of guys that are fans of the game and even bigger fans of the really rich guys that own them. The same way that stars distort spacetime with their gravity, enough money and media attention distort economic realities and the rules governing them.

Somebody really needs to explain whether this thread is about labor or about licensing.

Which does make me wonder if EA Sports' Madden license, granted at least in part by the NFLPA, is still good, or if 2ksports (for example) could get back into the game during a lock-out.

[JoeKnowsBest]

I took Micro Economics 101 last semester and according to my Professor, yes. All Professional Sports teams are considered a Monopoly unless there are more than 1 team in a single city. The Monopoly status comes from having a single product in one city, which if you are a Football fan living in Washington D.C. is exactly the case. Same with the Orioles in Baltimore. The Orioles are a Monopoly in Baltimore. And so on and so forth.

[Conn]

I took Micro Economics 101 last semester and according to my Professor, yes. All Professional Sports teams are considered a Monopoly unless there are more than 1 team in a single city. The Monopoly status comes from having a single product in one city, which if you are a Football fan living in Washington D.C. is exactly the case. Same with the Orioles in Baltimore. The Orioles are a Monopoly in Baltimore. And so on and so forth.

This doesn't even make sense. Just because the Washington Redskins are the only professional team in D.C. doesn't make them a monopoly. If you don't like the product, you can root for, and spend money on, the Ravens, or the Eagles, or even the Browns. That is not a monopoly. It doesn't work on a team-by-team basis like you're saying. So while some may argue that the NFL is indeed a sort of monopoly as a whole, what you're saying doesn't fit at all.

Not to put down your Micro 101 prof. Who is probably just an adjunct

[grantarchy]

This doesn't even make sense. Just because the Washington Redskins are the only professional team in D.C. doesn't make them a monopoly. If you don't like the product, you can root for the Ravens, or the Eagles, or even the Browns. That is not a monopoly. It doesn't work on a team-by-team basis like you're saying. So while some may argue that the NFL is indeed a sort of monopoly as a whole, what you're saying doesn't fit at all.

Not to put down your Micro 101 prof. Who is probably just an adjunct

Actually, I don't think your argument makes much sense either. You're equating being able to root for a team in another city to having purchasing options.

[Conn]

Actually, I don't think your argument makes much sense either. You're equating being able to root for a team in another city to having purchasing options.

There are season ticket holders for different teams all over the U.S., living outside of the "home" area. You don't need to live in D.C. to be a Redskins season ticket holder, or buy any other type of merchandise. Its nothing close to a monopoly in that manner.

I'll clarify my original post on the topic.

[Burgold]

I took Micro Economics 101 last semester and according to my Professor, yes. All Professional Sports teams are considered a Monopoly unless there are more than 1 team in a single city. The Monopoly status comes from having a single product in one city, which if you are a Football fan living in Washington D.C. is exactly the case. Same with the Orioles in Baltimore. The Orioles are a Monopoly in Baltimore. And so on and so forth.

Well, technically there are the DC Divas which is a professional football female football team that's been in operation in the Nation's capital for about a decade. So, there is more than one pro team here.

[JoeKnowsBest]

Well, technically there are the DC Divas which is a professional football female football team that's been in operation in the Nation's capital for about a decade. So, there is more than one pro team here.

But they aren't a MALE pro sports team, and they are the only Male Pro Football team in the city, thus that means they have a monopoly on that specific product market in Washington D.C. (This is also why the NFL wouldn't award Baltimore a franchise when they awarded them to Carolina and Jacksonville. They were afraid Baltimore would be too close to the D.C.market and that the NFL would be competing against itself in Maryland.)

Consider those points and thus, from what I was taught, that's what makes the Redskins a monopoly because if NFL fans living in Washington D.C. want to go see and NFL game, they only have one option to go to unless they leave that particular city and travel somewhere much farther away. Thus, 1 option for that product in the city makes them a Monopoly. Now compare that to the resturaunt business and there are many options in every city and you'll see the difference.

If Dan Snyder wants to raise ticket prices, what are you gonna do if you want to see the Redskins or any of their oponnents play in D.C? There aren't exactly any glaring options to go to another NFL Stadium in D.C. to purchase cheaper tickets to watch another NFL game. For that you would have to travel to Baltimore at the very closest, and Baltimore is a different market. It is not Washington D.C. If Dan Snyder wants to raise ticket prices, you're going to have to pay more for tickets and your only other option is to not go to the game. So then your NFL experience would be dictated by the NFL in which games it allows you to actually view in your viewing aread. I can't even watch Redskins games on TV because I live in Northern Maryland and the NFL has blocked all the stations that show them. They've made it so that the only way for me to watch a Redskins game is to either purchase the Direct Sunday Ticket (which is another monopolistic feature about the NFL since they only do that with Direct TV) or to travel to some other county where they've chosen to actually make the Redskins game the viewable game on the network. That means if I want to watch the Redskins it's either pay high ticket prices determined by a single organization, or buy the NFL Sunday Ticket on Direct TV otherwise move to the appropriate market so I can actually watch the Redkins on TV.

The Redskins are a Monopoly, and so are most other teams in the NFL because the NFL and it's individual team owners determine ticket prices and any other costs to access it's product. They do, not the competition because there really is no competition. If there were competition from other male Professional Football Leagues in the city and they were actually very competative as Pro franchise (economically speaking), this would drive ticket prices and other costs to access the teams down because a real competition for the market would ensue, and competition in a specific market is always best for the consumer.

Hopefully that explanation makes it clearer what she was saying.

If you had a good argument that the NFL was an Oligopoly, I might see potential in that debate.... but I can promise you that the NFL is not a perfect competition.

[TD_washingtonredskins]

The more I've considered this, the more I believe it's ridiculous to try to treat a professional sports team/league like a typical business.

[grantarchy]

There are season ticket holders for different teams all over the U.S., living outside of the "home" area. You don't need to live in D.C. to be a Redskins season ticket holder, or buy any other type of merchandise. Its nothing close to a monopoly in that manner.

I'll clarify my original post on the topic.

"In economics, a monopoly exists when a specific individual or an enterprise has sufficient control over a particular product or service to determine significantly the terms on which other individuals shall have access to it." -- From Wikipedia (I realize that Wikipedia might not be considered academic level source material, but I think we can agree that this is more or less the definition of a monopoly).

Does Dan Snyder have sufficient control over a particular product (the Redskins) to determine significantly the terms on which other individuals have access to it? I'm not sure how the answer could be anything other than yes. If he decides to raise ticket prices, fans have no alternative but to pay those fees. If he decides to raise prices on merchandise, fans have no alternative but to pay those fees. You could argue that fans have alternatives in other markets, and indeed they do, but that (in my non-expert opinion) doesn't diminish the monopoly that Dan Snyder has with the Redskins.

[Hitman21ST]

Yes. Yes it is.

On a side note, how are the Bucs the "most valuable" property?

And with the "rivalries"?

[grantarchy]

I also think it's an interesting question to consider whether having the option of access to another NFL team is the same thing as having access to other common products. For example, is having the option between Burger King and McDonalds for a burger the same as having access to the Redskins and Dallas (or even Baltimore). To me, other teams are almost separate products, although I realize that conceptually it's the same. Or is it? There is no giant burger corporation that has both a McDonalds and a BK as subsidiaries. A comparison might be that if there were a NBL (National Burger League) which put access to the actual product in different markets (i.e. McDonalds in DC and BK in Baltimore) and if you lived in DC and could purchase T-Shirts proclaiming your love of The Whopper, but could only go order an actual Big Mac to satisfy your burger craving, doesn't McDonalds have a local monopoly?

[CaliforniaSkin]

You are sorta missing out on what the competition is for... its not for more players, its for the money from the fans. The truth is that there is some competition between the NFL and the NCAA for people's money. If you have 2000 to spend on sports entertainment, you can't buy both redskins season tickets and Maryland football season tickets. They are competing for fans to buy their product, i.e. football (college or pro).

So, if you think about it, every person has a certain income allotment for entertainment. Whether that be sports, opera, actually playing sports, movies, etc. etc., every person has some finite amount of money. And each of the leagues are competing with each other for that money, and with college, and in some respects with the opera, etc.

So, again, it really comes down to how you define the market. If the market is "pro football," then yes they have a monopoly. If the market is "entertainment," then no, of course, they don't. If its somewhere in between, then well, the answer is somewhere in between.

Actually in the case the players are bringing the only thing that matters is the competition for the players. It doesn't matter in the slightest who or what are competing with the NFL for entertainment dollars, it matters only who are competing for the services of the players.

For the players, the market is pro football. There are 32 separately owned businesses that together make up about 99% of the market for professional football players (in terms of revenue). The Supreme Court has stated explicitly that the teams are separate entities. So if/when the players bring antitrust action against the NFL what they will be attempting to show is collusion, not a monopoly. This is important - the legal remedy for a monopoly is to break up the company (think AT&T). The legal remedy for collusion would be a court order forcing the end to the collusion and monetary damages.

The players are attempting to show anti-competitive behavior, not that the NFL is a monopoly. The NFL, in American Needle, was attempting to avoid these issues by having the court declare that they were a 'single entity' and thus could not collude with themselves. The court ruled against them. The Court did explicitly allow for some joint action but stated that any such joint action would be governed by Section 1 of the Sherman Act. Thus the NFL's defense, if it gets that far, would have to be under the "Rule of Reason." The Rule of Reason is how the Court interprets the Sherman Act saying, essentially possessing monopoly power is not inherently illegal unless the actor unreasonably restrains trade. Unfortunately for the NFL, the Court has determined that price fixing (including of wages) and group boycotts (possibly the lockout) are illegal per se. So a salary cap, in absence of a CBA, is almost certainly illegal. The NFL is likely on much better ground with the draft, but limitations on free agency are also pretty shaky.

Of course, a CBA pretty much overrides all other labor law so when the union recertifies it won't be an issue. The question is whether the owners can wait the players out.

[panel]

Well, I would say that they are the monopoly employers of Major League Football talent. You really have no where else to go to get close to comparable reimbursement. However, if the league slightly tweaked it's rules, and had no cap, and eliminated other hiring restrictions, then each team would be an employer, and they would be competing against themselves. But since there is an agreed upon salary cap, the owners are colluding as one entity, so yes, they are a monopoly for hiring major league football talent.

[wildbill1952]

From Dictionary.com (my preferred source to Wikipedia.com)

mo·nop·o·ly   /məˈnɒpəli/[muh-nop-uh-lee]

–noun, plural -lies.

1. exclusive control of a commodity or service in a particular market, or a control that makes possible the manipulation of prices. Compare duopoly, oligopoly.

2. an exclusive privilege to carry on a business, traffic, or service, granted by a government.

3. the exclusive possession or control of something.

4. something that is the subject of such control, as a commodity or service.

5. a company or group that has such control.

6. the market condition that exists when there is only one seller.

7. ( initial capital letter ) a board game in which a player attempts to gain a monopoly of real estate by advancing around the board and purchasing property, acquiring capital by collecting rent from other players whose pieces land on that property.

I would suggest, for argument's sake, that the discussion go beyond the current management/labor dispute and center instead on potential competition. Can anyone go out, hire 53 football players and a coaching staff, and then propose to play other members of the NFL franchise/cartel /monopoly? No. Even if my team is better, more loved by the fans in my home town, better financially and better as a football team, I am not allowed to allow my team to compete even though my product is as good or better than what the existing teams have.

I would say that the NFL is therefore a monopoly.

It would be very interseting if 32 rich guys who are not currently NFL owners decided to get together, for, say $200 million apiece, and hold a draft of all NFL players and formed a different monopoly. It's not going to happen, but, it would be interesting. I would love to see the owners sweat. Wonder what Snyder would sell the Redskin name for?