Based upon the current data analysis, it appears that some NFL owners choose to free ride while others do not, with some spending more on players than maximizing profits would warrant.
A second possible explanation relates to each owner’s motivation. Certainly, each owner desires to experience on-field success and most owners would like to spend more on team quality in order to own a competitive sport team. In fact, many owners are able to spend more because they have significant wealth beyond their ownership of an NFL team. For example, Jim Irsay, owner of the Indianapolis Colts, sold personal stock and real estate holdings to pay $100 million in signing bonuses from 1999 through 2008 (Burke, 2008). However, some owners may not have the desire or the ability to utilize outside funding sources. A number of owners have a large portion of their wealth invested in their NFL franchise and are more likely to treat their team as a profit-maximizing business. These owners might find it more profitable to free ride than to spend for a high performance team.
The Tampa Bay Buccaneers were, perhaps, the most egregious of all free riders. The Buccaneers were owned by Hugh Culverhouse until 1995, when Malcolm Glazer purchased the framchise. Clearly, Malcolm Glazer does not fit the mold of an owner whose primary financial investment is an NFL club as he is the 462nd wealthiest individual in the world.Though it appears that some owners of “family-operated” teams appear to free ride for economic “necessity,” some wealthier owners may free ride for profit maximization.
Ultimately, the decision to potentially free ride is idiosyncratic and depends on the motivation of each owner. From the perspective of the league, however, having incentives to reduce payroll and on-field quality to the detriment of the rest of the league is problematic. A problem exists when some teams are primarily carrying the burden of maintaining and growing the league’s brand (e.g., the Dallas Cowboys), while others are harming, or free riding on, the brand (e.g., the Cincinnati Bengals). From a league’s perspective, creating incentives to save costs is good, but allowing teams to reduce on-field quality to do so can be detrimental.
With the elimination of the salary floor, additional teams may now be inclined to free ride. Ultimately, this may harm the league’s brand reducing the value of the league as a whole and the value of its member franchises as well.
Ultimately the NFL has been extremely successful since its decision to equally share its national television revenues in 1960. John Mara, New York Giants co-owner, stated, “you could argue that we deserve a bigger piece of the pie, but it’s the reason that the NFL is the strongest professional league on the planet.”
The new revenue-sharing model that will be negotiated beginning in 2010 or 2011 may become even more important to the league as average team operating income was reduced 24% since its peak during the 2002 season as a result of changes to the model under the 2006-2010 CBA (collective bargaining agreement)
Att mäta tävlingsbalansen kan istället användas med syfte att ge oss kunskapen om hur olika regleringar historiskt har slagit igenom samt hur stora inträdesbarriärer som finns inom respektive marknad. Jag har tidigare identifierat de olika regimskiftena i den spanska ligan och försökt att koppla dessa till förändringarna i tävlingsbalansen.
Lyckas man inte med att utveckla matchdagen och attrahera tillräckligt med åskådare ska man rimligtvis inte klara av att finansiera sin allsvenska existens. Det borde egentligen vara lika självklart som att degraderas på sportsliga meriter. För bara då slipper vi stå och frysa häcken av oss på arenorna under första halvan av mars samt lida av sparkboll på mediokra planer. Och först då kommer klubbarna till insikt och börjar agera efter de preferenser som publiken har. En kamp om varje åskådare som om det gällde liv eller död.
** Demand for Sport, Jeffery Borland and Robert McDonald, 2003