The NFL vs. the MLB

Noted left wing crazy Bill Maher got a lot of sports guys fired up last year by using the NFL versus the MLB as a metaphor for the Democratic Party versus the Republican Party and “fairness” versus “unfairness.” Here’s a stereotypical response from Allen Barra in the Atlantic. It’s even being dragged up again this year.

Maher’s argument is that NFL revenue sharing looks like socialism (what a dirty word!) and makes the NFL a “fairer” league, allowing small market teams like the Packers and Steelers to win Super Bowls, while the MLB lets big market teams like the Yankees and Red Sox keep all their revenue, spend away, and crush the competition. Maher also points out that the NFL is far more popular, which makes the metaphor work for his purposes. The standard counterargument is that the MLB taxes teams who spend too much (the luxury tax) and generates as much or more variation in success among its teams.

As is usually the case in arguments that go on and on, both sides are wrong, and they can’t even figure out what they are arguing about. There are three points of contention:

  • Which league is “more socialist” from a financial perspective?
  • Which league generates “fairer” outcomes?
  • Is the NFL more successful because it is more socialist/fair?

Let’s start with the first one. Maher correctly notes that the NFL shares TV revenue evenly, which is its biggest source of revenue (well over $4 billion per year, compared to roughly $9 billion in total revenue per year). Excluding the Cowboys, the NFL also shares all merchandise revenues evenly.

When looking at the MLB, we can forget the luxury tax. It gets lots of attention, but the MLB only collects around $25 million per year in tax (the number varies between $10 million and $35 million). It’s only a slight exaggeration to say that the Yankees are the only team that pays tax (82% of the total since its inception). Jayson Stark estimates that, in total, $400 million in revenue was shared from rich teams to poor teams in 2009. He also notes that evenly split central fund revenue (TV, etc.) is about $1.2 billion per year. Total MLB revenue in 2009 was $6.6 billion per year, so clearly, a larger fraction of revenue is redistributed in the NFL.

You could argue that the MLB is more socialist because it directly shifts money from poor to rich teams. To shed light on this claim, imagine that MLB interteam revenue sharing ($400 million) goes exclusively to half the league (the small market half). These 15 teams would each get about $27 million, plus their $40 million share from the central fund. In the NFL, the “small market half” gets an even split: at least $4 billion/16 = $250 million. Any revenues that small market MLB teams generate with local TV deals will not make up the difference. This argument doesn’t work either. The $400 million that the MLB takes from the rich and gives to the poor is too small to matter.

It seems clear that the NFL is the “more socialist” of the two. This isn’t a great metaphor, since the NFL really functions more like a single business (half its revenues derive from communal sources) than a socialist economy, but for the purposes of settling the debate, I’ll stick with it.

Point number two: which league generates “fairer” outcomes? In this context, most argue that a league is fairer if on-field success has a lower correlation with the size of your market. I’ll rely on Barra’s numbers from the Atlantic rebuttal:

From the first Super Bowl in January, 1967, to February’s clash between the Packers and Steelers, there have been 45 Super Bowls featuring 27 different teams, with 17 different teams winning the championship. The last 45 World Series have also featured 27 different teams, but with 20 different clubs going all the way.

Barra thinks this proves the MLB is fairer; I say the numbers look the same. Additionally, this analysis ignores some important variables: the number of teams in each league over time, historical differences in financial disparity between teams, and the length of the seasons (luck is more important for playoff qualification in the NFL, since the season is so short). He does mention the fact that a higher percentage of teams make the playoffs in the NFL, which artificially increases the number of distinct winners.

My conclusion is that this metric shows little difference in observed “fairness,” but even if it favored one league, it would be hard to attribute the discrepancy solely to economics. There are too many differences in the ways that the two leagues crown champions. In an earlier post, I examined the correlation between salaries and wins in each sport. Perhaps looking at the correlation between revenues and wins (or “market size” and wins) would help clear up the fairness debate. In the meantime, I don’t see a strong argument either way.

Now for the third point: is the NFL more successful because it is more socialist/fair? No. Maher says it himself: “Baseball is just like the Republicans, and by that I mean it’s incredibly boring.” The NFL doesn’t succeed because of fairness due to the economic structure. It succeeds because it is a violent, tactical game with lots of action, which we Americans love. I’m a Lions fan. Don’t tell me that the NFL is popular because of parity. For the past 10 to 15 years, I knew that the Lions would not win a Super Bowl, but I followed the NFL anyway.

So, it seems that the NFL is the “more socialist” of the two leagues, neither league is much “fairer” than the other, and all of this has little to do with league popularity. Maher likes to say inflammatory things. Let’s leave it at that and let him have his silly metaphor.

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3 responses to “The NFL vs. the MLB

  1. Pingback: Lenin Was a Bears Fan « Thought News

  2. The NFL’s revenue sharing definitely levels the playing field more (makes it “fairer”). Here is the data for MLB (taken from http://www.footballnation.com/content/the-nfl-is-small-market-league/2763/):

    Win % % to make playoffs % to win WS
    Large Markets .518 33.6% 5.1%
    Medium Markets .494 23.4% 2.6%
    Small Markets .473 18.3% 0.9%

    And here is the data for the NFL:

    Win % % to make playoffs % to win Super Bowl
    Large Markets .507 39.4% 3.5%
    Medium Markets .482 37.5% 1.6%
    Small Markets .506 45.6% 4.7%

    That’s a huge difference. Small markets in the NFL have actually won MORE Super Bowls than the large markets! (Strange about the medium markets.) Compare that to MLB, where large markets have won the World Series more than five times as often as small markets.

  3. Interesting. Looking at the article you link, it seems that part of the issue is composition, i.e., the NFL has many more small market teams. However, this can’t explain the winning percentage differences. Small markets could work better for football for other reasons stated in that article and elsewhere (fewer games per season, more interest in the league in general, player willingness to locate in small markets), but I imagine that revenue sharing has something to do with it as well.

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