Sunday, September 26, 2010

My Favorite Monopoly

As an adjunct professor in post-secondary academia for the past 2.5 years, I have taught several business courses at both the undergraduate and graduate levels.  Part of the curriculum includes topics related to economic systems, market types, and competition types.  I can honestly say that in undergraduate level business courses I routinely present the NFL as a contemporary example of socialist markets, monopolies, and monopolistic competitions.

As far as I know, a monopoly is a market condition characterized by many buyers and one seller.  The one seller (or enterprise in this case) can control pricing through its exclusive control on supply.  That sounds like the NFL to me.  I mean really, where can I purchase professional football outside of the NFL, as pervasive as the NFL.  In the past several years the NFL has protested its innocence in government anti-trust proceedings, all the while saying that its individual teams act as separate businesses in the respective markets.  Really?  Is our government that stupid to accept that explanation?  Well, reader, don't answer that; it is too depressing.

At a minimum that makes the NFL the key players in a monopolistic competition, maybe even a socialist enterprise system.  Where is the socialist-hating tea-party in this argument?

In these economically distressed times, the NFL continues to force its monopoly on consumers by steadily increasing  ticket prices.  Now, one could argue that the laws of supply and demand should kick in at some point and ticket prices would start to shrink when supply exceeds demand.  Meaning, at some point, the consumers will stop buying tickets until the NFL teams start reducing ticket prices.  However, the NFL has another monopolistic technique.  Since the NFL virtually owns the major networks, the NFL actually forces television blackouts in local team markets when ticket sales are poorer than expected. So, again, the consumer is at the mercy of the monopoly.

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