4 And did you know that under the federal tax code the NFL is classified as a nonprofit organization?5 Big genial Roger Goodell, he of the almost $4 billion in television contracts, makes like he's the United Way.Simon Kuper has made a similar argument about soccer:
Gladwell offers some advice on owners who don't like their profits:
Perhaps tickets and replica shirts are overpriced, but few fans actually buy them. A Mori poll in 2003 found that 45% of British adults are interested in football, yet on any weekend only about 1.5% of Britons watch a professional game. In other words, most football fans rarely go near a stadium. They watch football only on TV, sometimes at the price of a subscription, or for the price of some pints in the pub. It's a cheap way to have fun.
And watching games is only a tiny part of the fans' engagement with football. Fans read newspapers, trawl internet sites, and play computer games. Then there is the football banter that passes time at work and school. All this entertainment is made possible by football clubs, but they cannot appropriate a penny of the value we attach to it. Portsmouth cannot charge us for talking or reading or thinking about Portsmouth. That's why Portsmouth is a small business.
Because clubs are small businesses that spend like big ones, they keep getting into trouble. From 1992 through May 2008, 40 of England's 92 professional clubs had been involved in insolvency proceedings, some more than once. But as Stefan Szymanski and I noted in our recent book Why England Lose, the peculiarity of the football business is that no club disappeared. True, Aldershot went bankrupt in 1992, but supporters simply started a new, almost identical, club. "We must be sustainable," clubs now say, parroting the latest business cliché. In fact they're fantastically sustainable. They survive even when they go bust. You can't get more sustainable than that. Even Portsmouth will most likely always be with us, in some form or other. If football clubs really did collapse under their debts, there would now be almost no football clubs left.
They are too beloved to go bust. Creditors dare not push them under. No bank manager or tax collector wants to say: "Portsmouth is closing. I'm turning off the lights." Luckily, society can keep football going fairly cheaply. The total revenues of European professional clubs for the 2007/08 season were €14.6bn. Tesco turns over four times as much.
The big difference between art and sports, of course, is that art collectors are honest about psychic benefits. They do not wake up one day, pretend that looking at a Van Gogh leaves them cold, and demand a $27 million refund from their art dealer. But that is exactly what the NBA owners are doing. They are indulging in the fantasy that what they run are ordinary businesses — when they never were. And they are asking us to believe that these "businesses" lose money. But of course an owner is only losing money if he values the psychic benefits of owning an NBA franchise at zero — and if you value psychic benefits at zero, then you shouldn't own an NBA franchise in the first place. You should sell your "business" — at which is sure to be a healthy premium — to someone who actually likes basketball.