Monday, February 13, 2012

Is the End Coming for Football?

By Tyler Cowen and Kevin Grier

The NFL is done for the year, but it is not pure fantasy to suggest that it may be done for good in the not-too-distant future. How might such a doomsday scenario play out and what would be the economic and social consequences?

By now we're all familiar with the growing phenomenon of head injuries and cognitive problems among football players, even at the high school level. In 2009, Malcolm Gladwell asked whether football might someday come to an end, a concern seconded recently by Jonah Lehrer.

Before you say that football is far too big to ever disappear, consider the history: If you look at the stocks in the Fortune 500 from 1983, for example, 40 percent of those companies no longer exist. The original version of Napster no longer exists, largely because of lawsuits. No matter how well a business matches economic conditions at one point in time, it's not a lock to be a leader in the future, and that is true for the NFL too. Sports are not immune to these pressures. In the first half of the 20th century, the three big sports were baseball, boxing, and horse racing, and today only one of those is still a marquee attraction.

The most plausible route to the death of football starts with liability suits.1 Precollegiate football is already sustaining 90,000 or more concussions each year. If ex-players start winning judgments, insurance companies might cease to insure colleges and high schools against football-related lawsuits. Coaches, team physicians, and referees would become increasingly nervous about their financial exposure in our litigious society. If you are coaching a high school football team, or refereeing a game as a volunteer, it is sobering to think that you could be hit with a $2 million lawsuit at any point in time. A lot of people will see it as easier to just stay away. More and more modern parents will keep their kids out of playing football, and there tends to be a "contagion effect" with such decisions; once some parents have second thoughts, many others follow suit. We have seen such domino effects with the risks of smoking or driving without seatbelts, two unsafe practices that were common in the 1960s but are much rarer today. The end result is that the NFL's feeder system would dry up and advertisers and networks would shy away from associating with the league, owing to adverse publicity and some chance of being named as co-defendants in future lawsuits.

It may not matter that the losses from these lawsuits are much smaller than the total revenue from the sport as a whole. As our broader health care sector indicates (try buying private insurance when you have a history of cancer treatment), insurers don't like to go where they know they will take a beating. That means just about everyone could be exposed to fear of legal action.

Read the rest here.


  1. Of course, assumption of risk by the players via the signing of waivers after full disclosure of the dangers would be out of the question.

    Thanks again, Tyler Cowen.

  2. Maybe the NFL will die this way, but I have my doubts. However, I have no doubt that football will survive through the collegiate level. Where I'm from, the love for football is so deep that parents will sign whatever waiver they have to to keep the sport going. People that win these judgements that actually endanger the existence of the sport better move that money toward security. The fanatics will not be happy.

  3. I think he's playing with 10 men on the field.

    Didn't the Mises Institute cover the NFL and this specific topic? I want to say some of the arguments were that the stadia are all publicly funded and that a franchise earns most of its revenue through a collective bargaining of television broadcast rights that limit who can show their games. The game in person is miserable to watch with all the commercials and music and ads playing at 100db after every play.

    I'd add that the franchises really don't own much in the way of real assets. More than half their revenue is player salary. A huge chunk is to pay for the title inflation of 50-80 marketing and operations VPs. And to be honest, there's not a tremendous business for spending what these guys want for sports marketing (did one recently myself, couldn't justify what am east coast team wanted)

  4. I hope the NFL does die. It's not that I have anything against the game, it's just that I hate having to pay for stadiums and sports I have no interest in and have no intention of seeing.

  5. I love playing the game, I cannot stand watching it.

  6. So which team do the Koch brothers have their eye on?

  7. What an incredible waste of time! His main example is even false.

    So boxing and horse racing are no longer marquee attractions?

    Ever been to Louisville for the Kentucky Derby?

    A Mayweather-Pacquaio fight is widely expected to be the biggest PPV draw in boxing history.

    Football is not going anywhere.

  8. Football is an amazing sport. The coaches teach players how to tackle properly. I played 6 years of football already and never got a concussion.

  9. Dumbest article ever.

  10. Here in Australia, Rugby League (in NSW and Qld.) and Australian Rules Football are the two top winter football codes, with Rugby and Soccer behind them in mass following. In summer, Cricket predominates. But it wasn't always the case. A century ago, Rowing, Cycling and Boxing had more mass appeal than our four football codes and cricket. What happened? Corruption or at least perceived corruption, in the sense of a common belief that game results are rigged and not fair, is the real deal killer for top level public support. Once it is believed the game is rigged the public take their time, interest and enthusiasm elsewhere, and there are always plenty of new and interesting sports ready to steal the thunder of the established sporting codes should the leading players, coaches, administrators and officials "drop the ball." This phenomenon should come as no surprise to students of competitive markets.