With the Super Bowl over, President Barack Obama this week unveiled a federal budget proposing tax hikes on the wealthy and policies that would aid the less fortunate. Many Republicans immediately condemned the proposals as unfair and socialistic. Representative Paul Ryan called Obama's ideas "envy economics" and said it was wrong to impose new taxes and regulatory burdens on the most enterprising people in society.
Yet the GOP criticisms ignore the fact that one of the most successful sectors in American society bases its business model on the principles of redistribution from rich to poor, fair competition, and explicit regulation of personal and business conduct. That, of course, is the National Football League (NFL).
That association is one of the most successful businesses in America. Since 1985, the Harris Poll has asked fans to name their favorite sport, and the NFL routinely wins hands-down. For example, pollsters found that "35 percent of fans call the NFL their favorite sport, followed by Major League Baseball (14 percent), college football (11 percent), auto racing (7 percent), the NBA (6 percent), the NHL (5 percent) and college basketball (3 percent)."
But most spectators don't realize that the secret to the NFL's success is an approach based on redistribution and fair play. Consider the following league practices: identical player salary caps for each of the 32 teams, a draft of college players in which poorly performing teams have priority over more successful teams, and equal sharing of television revenues by all the teams, to the tune of around $170 million a year per franchise.
General managers can allocate salaries however they want among individual players, but to ensure that competition is fair across geographic markets, total player expenditures can be no higher than the overall player payroll set by the salary cap. This means that rich owners cannot outspend poorer ones and all teams operate within the same budgetary constraints.
These policies are remarkably different from other sports and American society as a whole. Baseball's model allows huge disparities between wealthy and poorer teams, and rich teams routinely spend much higher amounts on player salaries. For example, with $90 million in revenue just from its YES local television network, the New York Yankees have a payroll of $197 million, while the San Diego Padres and the Oakland Athletics have total payrolls of $55 million each. This inequity in TV contracts allows "big-market" teams to compete more aggressively than "small-market" locales for marquee players.
Not only are football's business practices pro-egalitarian, NFL Commissioner Roger Goodell acts as a regulator of player and owner conduct. Players Ray Rice and Adrian Peterson were suspended from league play due to egregious conduct off the field. Seattle running back Marshawn Lynch has been fined for wearing the wrong color of shoes. And fans are eagerly awaiting the results of the NFL investigation into the New England Patriots' "Deflategate."
What Obama is proposing are practices that are common in America's favorite sport. He wants the less fortunate to have a decent shot at improving their lot, similar to what the NFL did in awarding their league's worst performer (Tampa Bay) the top choice in the upcoming college draft. He wants wealthy individuals who have abundant resources to pay higher taxes when their money transfers from one generation to another, similar to the rich football owners who share financial resources with poor ones regardless of local audience share. And he wants government regulators to insure that no single individual, company, or industry gains unfair benefits over others. (Even Goodell friend Bob Kraft of the New England Patriots got penalized for the "Spygate" fiasco.)
Despite basing league play on fair and egalitarian competition, professional football is wildly popular in all regions of the country. The sport is embraced by people of very different socioeconomic backgrounds and political perspectives precisely because it produces suspenseful games and exciting competition. People cheer when Super Bowl Most Valuable Player Tom Brady offers the new truck he won to teammate Malcolm Butler for saving the victory with a last-minute interception.
The lessons for America's political and business leaders should be clear. People appreciate healthy competition, fair policies, and opportunities for the less fortunate to work hard and do well. There still can be superstars such as Tom Brady and Aaron Rodgers who are well-compensated and rewarded for outstanding performances.
But American society functions well when there is fair play and people believe there is a decent shot to be successful. Fairness is a winning formula not just in the NFL but for society as a whole.
Darrell M. West is Vice President of Governance Studies at the Brookings Institution and author of Billionaires: Reflections on the Upper Crust (Brookings Institution Press, 2014).