9 The National Football League NFL has long been accused of

9. The National Football League (NFL) has long been accused of benefiting from monopoly power. Explain how the NFL protects its monopoly power, and what would you expect to happen to the number of teams and ticket prices if the NFL lost its monopoly?

Solution

Though the NFL is not officially a monopoly, it has become a monopoly overtime because of its fans. This is because fans prefer a single league to many as it is easier to follow and keep a track of their favourite teams and players. The NFL has different teams which are seperate business entities. But they all come together under the umbrella called NFL. The NFL solidified its monopoly position by getting the Congress to sign a legislation which allowed for a single national television contract for airing its events. The antitrust laws stood in the way, but the league found a way to bypass this by getting the government to sign a legislation in its favour.

The league procured an exemption from antitrust laws for all its \"major\" functions which resulted in the league, which is a collection of seperate business entities, acting like a single unit.

If the NFL lost its monopoly, there would be different channels airing the events, some may be free due to advertising revenue that they get for their programme. There would be formation of new leagues and players and team owners would have the freedom to sign up with leagues of their choices. There would be more number of teams as team owners under different leagues would recruit new players to fill up the teams and hence, the prices of the tickets would fall as they would compete against each other for TV time, advertisement and contracts with other brands of products.