NFL lockout 2011: Why are Gov. Christie and other politicians strangely silent?
THURSDAY, 21 APRIL 2011 12:03
BY EVAN WEINER
THE BUSINESS AND POLITICS OF SPORTS
The National Football League Draft is on the horizon and there has been a deafening silence from a group of people who actually have some power to exert some influence on what appears to be stagnating talks between the owners, who have locked out their employees — the players — and the players representatives.
People like New Jersey Governor Chris Christie who has no problem yelling at his employers in public settings — New Jersey voters — has gone mute on the issue. Christie is no better than Texas Congressman Lamar Smith who doesn't think Congress ought to be involved in the dispute or President Barack Obama. Christie is in a governor's league that includes both Democrats (Andrew Cuomo of New York, Jerry Brown of California, Mark Dayton of Minnesota among others) and Republicans (Rick Scott of Florida, John Kasich of Ohio, Scott Walker of Wisconsin, Rick Snyder of Michigan, Rick Perry of Texas, Jan Brewer of Arizona, Bobby Jindal of Louisiana) who should be out there jawboning NFL owners to get a deal done with the players.
All the governors are cutting costs so you figure the potential of losing money because there will be no business conducted because of the lockout would stoke their combative fires.
But it hasn’t.
You see taxpayers are on the dole for stadiums that NFL owners use. In Christie's case he inherited a $300 million commitment for infrastructure at the New Meadowlands Stadium and New Jersey is still paying off the debt on the defunct Giants Stadium. Jindal signed off on a deal that calls for cash strapped Louisiana to contribute up to six million annually in public subsidizes for Tom Benson's New Orleans Saints. New York is giving Ralph Wilson some three million dollars annually for upgrades at Wilson's Buffalo Bills facility.
You go from state to state and you will see just how much government money has been invested in the National Football League through stadium building or renovation with the old adage that stadiums are economic engines.
Stadiums are not economic engines and that has been documented time and time again.
The governors are not the only ones who have lost their usually loud voices. There are mayors and city councils that have been strangely silent. The noise machine on AM radio is also strangely quiet on this issue (although given the very nature of talk radio whose content will never be confused with any serious discussion on anything of importance, it might be a blessing in disguise).
Congress too is not touching this issue but there is a big role here that can be played. Congress knows how to apply pressure on sports. But for some reason, Congress even during the days of steroids hearing up on the hill has treated the NFL with kid gloves. Congress praised the NFL's drug testing polices a few years ago.
Here is another reason Congress needs to get involved. Discarded NFL players cannot get health insurance because of pre-existing conditions. No one knows just how many of the former players are now on the public dole on social security insurance or Medicare. As the debate on the future of those programs continues, someone in Congress should be asking why football players who suffered disabling injuries in a sport that brings in a reported $9 billion annually are on the public dole.
National Football League owners, of course, are highly political creatures. San Diego's Alex Spanos gave a speech at the 2000 Republican Convention in Philadelphia when George W. Bush accepted the party's nomination as the GOP's candidate. Spanos also spent a lot of money on 527 attack ads against John Kerry in 2004 when he ran as the Democrat's candidate against George W. Bush. Yet Spanos did know this, you can be a good Republican soldier but sometimes you need a Democratic operative to help you get a new stadium. Spanos hired Mark Fabiani who was deputy campaign manager for communication and strategy for Al Gore during his 2000 run against George W. Bush.
If National Football League teams contribute so much to local economies as the former National Football League Players Association (the group no longer exists) claims, why have the elected officials suddenly becoming like Harpo Marx and Marcel Marceau?
Doesn't the NFL create jobs in a community?
Then there is the TV issue. The NFL Network and ESPN continue to collect subscriber fees from viewers and some of those dollars have been put into a war chest by NFL owners. The use of 2011 TV monies is a another bone of contention between the NFL owners and the now decertified National Football League Players Association with the disbanded association complaining that Rupert Murdoch's News Corp (FOX), Comcast/GE's NBC, Sumner Redstone's CBS, the Walt Disney Company's ESPN and DirecTV money should be frozen and the owners should not have access to those funds.
The NFLPA brought the issue to court and a judge will eventually rule if the NFL owners can use that money.
The money issue is a big deal. Why should non football fans who never watch the NFL on ESPN or ESPN for that matter pay for a service that never use. Because of the 1984 Cable TV Act, anyone who gets basic expanded cable is paying for ESPN. That is another reason that Texas Republican Lamar Smith, the Chairman of the Committee on the Judiciary is wrong when he says that Congress doesn't have a role in the lockout.
The NFL's success is the result of Congressional activity. The Sports Broadcast Act of 1961 was pushed through the House by Brooklyn Democrat Emanuel Cellar and flew through the Senate in what seems like record time and was signed into law by President John F. Kennedy on September 30 of that year. The law allowed the NFL's 14 teams to become one entity when it came to TV negotiations which allowed NFL Commissioner Pete Rozelle to sell the league's teams as one to the highest bidder at the time. William Paley's CBS beat David Sarnoff's NBC but Sarnoff in 1964 decided to bankroll the American Football League.
Sarnoff's money gave the AFL the wherewithal to sign players like Joe Namath and eventually provided the impetus that forced the NFL and AFL to merge. That marriage needed to be approved by Congress. NFL Commissioner influenced two key legislators Louisiana Senator Russell Long and Congressman Hale Boggs with the promise of putting a team in New Orleans in exchange for their votes. The merger was approved by Congress and President Lyndon B. Johnson in the fall of 1966 and New Orleans had a franchise a few days later.
The revision of the 1986 Federal Tax Code featured a loophole that owners immediately embraced. Any municipality building a stadium could only get back eight cents of every dollar generated in the facility to pay down the stadium debt. Owners, depending on the lease terms, could keep 92 cents of every dollar spent in the building.
Taxpayers should be asking why the politicos have gone troppo on this issue. Sports fans are not rational when it comes to their teams, their sport. They don't understand that sports is a business first and is heavily dependent on government support. State and local governments are spending hundreds of millions of dollars on facilities and are not coming close to breaking even on the projects. Because of that, governments have to tap other taxable areas to pay off the debt. There are all kinds of taxes, a hotel tax, a motel tax, car rental tax, sewer tax, cigarette tax, beer and alcohol tax, water tax and whatever else politicians can find to tax for sports. Sports owners can depreciate player contracts and don't pay any property taxes on facilities.
Still sports fans go on blithely and are wondering about their favorite NFL team's draft strategy. Next week's draft is the final product of the 2006 owners-players agreement. Both sides agreed that they would be a draft even if there was a lockout. There is an interesting aspect to a draft. It is, in itself, a restraint of trade but in a free market society accepted. Thirty one owners and the Green Bay Packers Board of Directors divvy up players and the players have no choice but to go to the team that drafts them. There are a few exceptions, Bo Jackson, John Elway and Eli Manning were able to beat the system and get to a preferred destination.
The owners and players continue their pitched battle. The owners claim the economic system is broken though have presented no public proof that they are hurting as an industry and the players don't want to give up the gains they have made financially over the years. The players also seem to not want to be bothered with taking care of their former members or are thinking about their own future down the road in terms of medical benefits. There is always social security and Medicare for them down the road — if the solons of DC decide to continue the safety net like many other industrialized countries although those aging Beltway solons just see darkness ahead for America.
Obama, Lamar Smith, Harry Reid, John Boehner, Chris Christie, Andrew Cuomo are at best ambivalent about the NFL lockout. There should not be. The do have a responsibility to NFL fans who spend money on the product, to taxpayers who have to pay for NFL stadiums, to cable TV subscribers to jawbone the two warring sides. Instead they are missing in action and have sloughed off their responsibility to get involved in an industry they built.
Evan Weiner, the winner of the United States Sports Academy's 2010 Ronald Reagan Media Award, is an author, radio-TV commentator and speaker on "The Politics of Sports Business." His book, "The Business and Politics of Sports, Second Edition is available at bickley.com, Barnes and Noble or amazonkindle.