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Feb. 1, 2014 - Freedomain Radio - Stefan Molyneux
17:21
2606 The Truth About The NFL Super Bowl
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Hi everybody, it's Stefan Molyneux from Freedom Main Radio.
Hope you're doing well.
So, apparently 108 million Americans watched the Super Bowl last year.
I'm sure it'll be even more this year, 2014.
And question is, I guess, why is it such a huge sport?
It's an entertaining sport, and big men do drive at each other at high velocities, but why is it so big?
Almost $10 billion a year in gross revenues.
Well, like all things that are enormous, a good place to look at is juicing, or steroids, or as it's known in the sports business, taxpayer subsidies.
One of the reasons why things get so big.
So, there are a few reasons why the NFL, despite some significantly negative aspects, such as serial life-threatening concussions to a significant number of thousands of players, are now suing the NFL for not informing them of the medical dangers of concussions.
And personality changes and suicidal ideation.
There is, of course, abusive painkillers, abusive performance-enhancing drugs, generally praising the larger the person, the better, until, yea, verily, they eclipse the very sun itself.
So there are a number of negatives about it.
It's doing very well.
And how is it able to be so immune from negative public perception?
Well, much like the teachers union, it is because it is both subsidized and heavily protected by the state.
So approximately 70% of the cost of NFL stadiums are provided by the taxpayers, not The NFL owners.
Generally, it's not because the NFL owners cannot afford the price of these stadiums.
The net worth of these people runs into the hundreds of millions or billions of dollars.
They are essentially a feudal aristocracy who have been granted a muscle-bound license to print money by the state.
When the ongoing costs are included, 12 of the league's 32 teams turn a profit on stadium subsidies alone.
In other words, the taxpayers are forced to pay for the stadiums, the cities maintain the stadiums, and they're profitable simply because of those subsidies alone.
And of course, many stadiums are given a free pass on property taxes, which means, of course, that property taxes have to rise for everybody else.
So, for example, in Minnesota, the Vikings wanted a new stadium.
The Minnesota legislature, although it was facing a $1.1 billion budget deficit, gave $506 million from taxpayers as a gift to the team, covering about half the cost of the new facility.
Perhaps they hoped to meet a cheerleader.
I'm not sure, but that is pretty wretched.
Now, the Vikings' principal owner, Sigmund Wilf, I guess a Scotsman, had a 2011 net worth estimated at only $322 million.
So, with the new stadium deal, the Vikings' value rose about $200 million, which, of course, further enriched Wilf and his family.
So, that's nice.
The NFL, as you may or may not know, the NFL headquarters are themselves tax-exempt, and they've used this tax-exempt status as a charity to shield about $35 million a year.
From the taxman, again, raising the price of taxes for everyone else.
Originally, it was supposed to be sort of boards of business and so on, boards of trade that were supposed to be exempt.
But in the 60s, some enterprising lobbyist wrote in that the NFL itself was tax-exempt.
The individual teams do pay taxes, but the NFL does not.
So where's all this money coming from other than you at the IRS point of a gun?
Well, in 2013, CBS, ESPN, Fox, and NBC paid the NFL about $3 billion.
Yes?
With a B. For license rights to broadcast games.
Satellite carrier DirecTV pays about another billion dollars.
Beginning this year, the group will pay the NFL about six billion dollars annually for broadcast rights.
Beginning this year, ESPN alone will remit to the NFL a staggering $1.9 billion, about twice what NBC will pay to broadcast Monday Night Football.
And for that sum, ESPN doesn't even receive a place in the Super Bowl rotation, which alternates annually between CBS, Fox, and NBC.
Now, one of the reasons why you want to pay so much to get football is because football is watched in real time, right?
TiVo has decimated the expectations of advertisers.
Because you're TiVo, you fast forward past the commercials.
But if you're watching football live, you'll generally sit through the commercials weighed down as you are by four gallons of beer and nine pounds of popcorn.
CBS, which carried the 2013 Super Bowl, got about $250 million from in-gain advertising at $3.7 million per 30 seconds.
Plus millions more from pregame and postgame ads.
So in 2014, ESPN will spend $1.9 billion for 17 NFL games compared to $700 million for 90 Major League Baseball outings.
So they pay $112 million per NFL game, $8 million per Major League Baseball contest.
So, how is this achieved?
Well, the NFL profits by creating all these game images, by recording all of these games in publicly funded stadiums.
They broadcast the images over public airwaves, and then they keep all the money they receive, as a result, clutched tight to their toady-like chests.
And this socialization of cost and privatization of profit is fundamentally a fascistic model, and as I said before, it results in a feudalistic monopoly of certain families over these profit enterprises, all protected by the power of the state.
So the television images made in the publicly funded or largely publicly funded stadiums are privatized.
All the gains are kept by the owners.
So this is a delicious business model that is a core feature of late model crapitalism.
Crapitalism is when you use crony capitalism to manipulate the political process for profit rather than competing in the free market.
So how did this come about?
I mean, why don't the individual teams broadcast their own rights and compete among each other?
And why is the price so artificially high?
Well, because the NFL enjoys a legal monopoly.
In other words, the Antitrust Acts, they enjoy specific immunities from Antitrust Acts designed to prevent monopolies within the marketplace.
So in 1961, the Sports Broadcasting Act granted the leagues, there were two back then, legal permission to conduct television broadcast negotiations.
In a way that would otherwise have been a price collusion.
You hear about the robber barons of the 19th century.
Most of it's just left-wing propaganda, progressive nonsense.
But where there is this kind of price collusion, it would normally be illegal, but this was granting specific immunity from those laws against price collusion.
In 1966, there was a law which limited the antitrust exemptions of the 1961 law.
And in 1966, the statute said, well, if the two pro football leagues of the era merged, which they would do in 1974, years later, the new entity could act as a monopoly with regards to television rights.
So only they could sell the television rights.
And this, of course, legal monopoly, lack of competition and immunity from antitrust action.
And you don't have to pay corporate taxes in the NFL because you're a charity.
All of this means it's virtually impossible to compete with them.
So, I mean, there are public handouts, some of which are used for investment in temporary ways, such as when there were handouts for GM and Chrysler.
There are handouts which go to banks, which then to some degree get repaid.
But the public handouts for modern professional football, they never end, and they're never repaid.
And what does it do?
Does it add economic value?
Well, they argue when you put a stadium up that it generates economic value.
Economists generally disagree.
One economist has said, just shave, you know, move the decimal point one to the left.
If they say it's 500 million, maybe it's 50 million.
And it turns out that people who spend money in stadiums don't magically have that money replicate in their pockets to spend elsewhere.
It's just a zero-sum game.
They don't spend it in a movie.
They spend it at a stadium.
So the stadium owners are happy.
The movie house owners are unhappy.
So...
It doesn't really...
It doesn't really add anything economically that economists have been able to find.
But of course, governments like it and politicians like it because you don't want to be the politician who drives the team away by not bribing them to stay.
Although no team has really relocated since 1998, they constantly, in veiled ways, threatened to, well, we're looking into our options with other cities and so on.
And then they just play the cities off against each other for who is going to bribe them with most of the taxpayers' money, and then they stay.
If you drive away...
The favorite team, you're going to get voted out of office.
And if you keep them there, you have lots of jobs, stadium jobs, stadium building jobs, and someone to hand out, which is kind of what you want to do as a politician.
And of course, you can fund it using bonds, you know, 10, 20, 30-year bonds, that when they have to be repaid, you're long out of office and probably dead.
So you end up with this complete nonsense.
Like, so in Philadelphia and Seattle, taxpayers continue to pay for bonds for NFL stadiums that were demolished years ago.
New Jersey Sports Authority issued hundreds of millions of dollars in tax-free bonds for the old Giants stadium, which opened in 1976.
a lot more bond value than the stadium was actually worth.
Though the facility has since been raised, R-A-Z-E dealer, gone, New Jersey taxpayers still cover about $35 million in annual subsidies on giant stadium bonds, which were used, of course, as the endless cookie jar by a generation of corrupt Garden State politicians.
Nice to know.
That's all changed.
All right.
And...
The taxes that are levied, if any, on stadiums are the results of negotiated settlements.
In other words, it's not like the general 1% or 1.5% that homeowners pay on their property.
It ends up being something negotiated far less.
So the Jets and the Giants combined are worth roughly $3 billion.
And the $6.3 million annual payment in lieu of taxes on the stadiums is the equivalent of two-tenths of 1% of property taxes.
But remember, these are poor multi-hundred millionaires or billionaires, so I think we all feel pretty good scraping the bottom of our own cookie barrel to line their pockets.
There's a futuristic Star Trek-style new field for the Dallas Cowboys Perform.
It has 105,000 seats, go-go dances on every level, and a built-in nightclub, actually more than one, and it's been appraised at about a billion dollars, and property taxes paid Are about zero.
Zero property taxes on a billion dollars.
But again, the residents can be happy that their own property taxes are going up to compensate for that.
So the NFL benefits from these massive public subsidies, tax favors, tax exemptions, no corporate taxes, antitrust waivers.
And so is this feudalism.
The NFL teams, most of them are family owned.
Taxpayer, subsidized, government protected, so there are whole family groups.
That live like pashas at the average person's expense.
And this is, you know, this is the feudal lords and ladies of European history of current Pakistan.
Collect all these public payments while contributing little to nothing productive towards a society.
And for example, so Veterans Day 2012, the NFL announced its owners would donate to veterans groups $300 for each point scored in designated games.
And of course, CBS, ESPN, Fox, NBC broadcasts.
Oh, they're so great.
They're the most generous guys ever.
Total donation came to $432,000.
Annualized NFL stadium subsidies.
And tax favorites total about a billion dollars.
So the NFL took a billion dollars from you and you and that guy sitting behind you and the three children who are still a gleam in your eye, and then they praised themselves for giving $432,000 back, less than a tenth of one percent.
So why don't you hear about this stuff?
Well, CBS, ESPN, Fox, and NBC, they all broadcast the NFL games.
This is...
They're privatized profit programming created in public-funded facilities.
Companies keep all the after-tax advertising revenue and cable carrier fees, though, of course, none of this could occur without massive forced public funding of these stadiums.
Well, a fundamental reason these networks rarely mention the subsidized nature of the NFL, and they praise the NFL's owners rather than run honor exposés of their obscene wealth.
Any emphasis on fair compensation to the public for its investments in the NFL would inevitably call attention to the network's own bag of candy arrangements with them.
And it is just tragic.
It's tragic how much is taken away from the public and how many youths are lured into.
This kind of mess.
.02% of high school football players will ever end up playing for the NFL. It raises massively the salaries of the players, of the 2,000-odd players in the league.
Well, because the taxpayers are subsidizing so much of the business, they can end up being paid a whole lot more.
They have a monopoly.
They have these tax exemptions.
They don't pay property taxes, at least not much.
And so it is wretched.
It has created a parasitical rich bunch of welfare bums that are constantly threatening increasingly bankrupt cities to take away, to literally take their balls and go home and extort the local population through the politicians who wish to remain popular.
The people who like the game somewhat like the subsidies because they have to pay less.
The game itself has become completely distorted because of the vast amount of money The NFL has become somewhat similar to the stock market, in which you have way too much money being forced into a system that is designed for much less.
These subsidies for sports go back many years.
In the 1930s, Under Roosevelt's massive government spending attempts to end a lengthy depression.
Hmm, I wonder, is that familiar?
Yes, I think it might be.
They built thousands of baseball diamonds and thousands of football fields and so on.
And that all began sort of the process.
It's all government subsidies.
How do you turn a hobby into a multi-billion dollar business?
Well, you get the government.
To grant you subsidies and protect you from competition and you force the public to pay for everything that's needed for your business and then you privatize all the profits and don't even pay in taxes what the average citizen pays as a percentage of property value or income.
And then you make sure that you're classified as a charity.
NFL classifies itself as a charity, which according to IRS laws means you should not be Profiting significantly from that, and it pays its senior executives millions and millions and millions of dollars and vigorously fought any revelation of its salaries, which has only recently come through.
So it's monstrous.
And these very high salaries in the NFL lure lots of We're good to go.
I mean, the brain damage that can occur from these concussions, not to mention other kinds of damage to the body, is wretched.
But everyone's looking at these huge salaries and saying, well, I'd like a slice of that pie, but those salaries only exist because the government literally has its boot on the neck of the taxpayer forcibly extracting money from them and from the next generation to pay for over-steroided, overpaid monsters in the here and now to crash into each other like medieval battering rams of infinite stupidity and predation.
I'm not sure how I feel about it.
Hey, I love sports.
Sports is great.
Exercise is great.
Sports at gunpoint are not so great.
So, I mean, I guess enjoy the game if you want.
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