Tonight marks one of the more bizarre annual rites in the American worship of state power—the NFL Draft. I realize I may be alone in this characterization. Just this morning, Mises Institute president Doug French wrote a lengthy editorial celebrating the Draft. But I don’t share the public’s love of the fraudulent, anti-libertarian monstrosity that is the National Football League. As I see it, you can support liberty or the NFL, but not both.
The NFL is not a private enterprise in any free-market sense. It was at one time, but since the 1960s, it has steadily morphed into a subsidiary of the state. Admittedly, this process did not begin at the NFL’s insistence. In the 1950s, the Justice Department’s Antitrust Division decided to interfere with the rights of NFL franchise operators to make rules regarding the presentation of their games on the new medium of television. By 1961, the NFL was forced to lobby Congress for a special antitrust exemption just so it could sign its first national television contract. A few years later, a similar exemption was secured to permit the NFL’s merger with the American Football League.
In the decades following the merger, the NFL embraced its special status and started demanding municipal governments, rather than franchise owners, assume the financial risks of constructing new stadiums. Today, 23 of the 32 clubs have stadiums built no earlier than 1992. Most are financed primarily through taxes or government-backed bonds. Generally, NFL owners contribute only about one-third of the cost.
In Cleveland, for example, the city used bonds to pay for 75% of the cost of the Browns’ stadium, which opened in 1999. The team only pays $250,000 per year in rent to the city. Keep in mind, the new stadium was only built after the first Cleveland Browns franchise moved to Baltimore in 1995. Why did they move? Because then-Browns owner Art Modell, after financially mismanaging the team for years, needed a government bailout, which he received from the state-run Maryland Stadium Authority in the form of M&T Bank Stadium. And to get one step further back, the Maryland Stadium Authority came into existence only after Baltimore’s previous NFL team, the Colts, moved to Indianapolis when the latter city—through the Marion County Capital Improvement Board—offered the club’s owners a brand new stadium.
Even when owners pay for a share of construction costs, it usually comes in the form of long-term debt. Franchise sales in recent years have also been heavily leveraged. When Daniel M. Snyder purchased the Washington Redskins from the estate of Jack Kent Cooke in 1999, he paid a then-record $800 million, which included assumption of $155 million in debt on the stadium Cooke built just before his death and another $340 million Snyder borrowed from a European bank.
Without direct government financing in the form of taxes and municipal bonds, and indirect financing in the form of interest rates artificially manipulated by central banks, most of the NFL stadiums erected over the past 20 years would not exist, at least in their present forms. Nor would debt-fueled sales like Snyder’s been possible. …
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