The Economics of Football (Pointed and Round)

As I look forward to the holidays I must take another moment to reflect on Thanksgiving, which is my favorite. The reasons are simple—family, friends and, of course, football. 

I faced my first Thanksgiving more than 30 years ago and less than 3 months removed from my native Australia. I had nothing to do, nowhere to go, and was preparing for a lonely and long weekend in Durham, North Carolina. Then a fellow PhD student generously took me into his home for a day of feasting and friendship with his wife and children. I’ll always remember that day fondly. 

Fast forward to last week, where my own American family ably and lovingly executed the full turkey extravaganza. While the meal was fantastic, I could only prepare and eat food for so long before getting a big helping of football. My student friend from Durham was a massive Georgia fan, so he would have been happy to know that I was binging on gridiron, pigskin, pads and helmets.

I devoured three back-to-back NFL Thanksgiving Day games stretching from noon to midnight. Professional football gluttony was then followed by wall-to-wall college games on holiday Friday, a regular college football Saturday, a full slate of NFL games on Sunday, topped off with the iconic Monday Night Football matchup.

Interspersed among this American football smorgasbord was another buffet of football–soccer that is. European Champions League qualifiers occurred on the Tuesday and Wednesday before Thanksgiving and then English Premier League on the weekend, with most of the games happily concluded before American football began.

What to make of all this football? Here are my five observations inspired by Thanksgiving:

1. Soccer may be the global game, but America’s game is clearly football

Nostalgic Americans wax lyrical about baseball as the national pastime. The athleticism and artistry of the NBA is incredible. Ice hockey has its diehards. But football is America’s sporting religion. Without it, cable and satellite TV might go out of business, which is why the broadcast rights to both brands of American football are astronomical.

2. Live football – both pointy ball and round ball types – dominates the broadcast media landscape

This is true both of what we used to call TV and what we now know as Internet streaming, in a world where AppleTV and Roku are completely blurring the boundaries. There are so many things we like on-demand any time, from Seinfeld reruns to the latest made-for-the-internet hit. But we demand our sports live, football above all.

We fit Netflix around our lives. We are happy to watch Steph Curry and Warriors on NBA highlights the next morning. But we have to organize our lives around football.

This is true for the NFL and college football in America, and for the Premier League and the Champions league around the world. Most people know this regarding American football afternoons and evenings. But just look at the number of American bars open and doing big business on weekend mornings bright and early because of live “football” broadcasts from Europe. 

3. Black Friday has become supersized—from in store into online, and from one day into at least a week

With so much football to watch, it must be time for a new big screen. Right?

There are long lines at traditional stores, beginning essentially as soon as the turkeys are cooked, as people look for the best deals on those new(ish) 4k TVs. But my inbox was inundated by Black Friday ads from all the big box stores, in addition to Amazon, TV brands, and some online retailers I hadn’t even heard of, all offering delivery within 48 hours and free shipping.

In China retail is so heavily online because of Alibaba, Baidu and Tencent that they call stores “off line” retail. This is one area where China leads the US, but the evidence from Thanksgiving is that the US is catching up fast.

And of course, Black Friday was followed by a Black Friday Weekend, and then by Black Monday. Of course this has long happened in stores. Online just turbocharges it and extends it with Cyber Tuesday.

4. Gridiron fits America perfectly because of the many mini-dramas in every game

American football provides a wonderful opportunity for advertisers to get up close and personal with its football-viewing consumers, and not just to promote that new TV on which the games will look so good.

Americans seem very accepting of ads on TV—just look at the number of them compared with most other countries. There is nowhere Americans are more accepting of advertising than during football games. Here’s why.

Football is a game of mini-crescendos. Every three plays, something decisive happens—either a team punts the ball to the opposition or it gets a new set of “downs.” Either way, another 3rd down is only a few plays away. You have to wait a long time to find out who finally wins a game but something meaningful, demarcating a new phase of the game, happens all the time. 

Then think about what economists would call the “externalities” from third down. Every third down-–in fact every down–is analyzed by the announcers, replete with so many camera angles and replays. The commentators become stars in their own right because they get so much air time. It’s no surprise, then, so many former star players and coaches end up on TV not only analyzing games but also pitching products in the ads during the game. 

There are ads after every score, change of possession, timeout, kickoff, 2-minute warning, and end of a quarter—not to mention before kickoff and during the “post game” telecast. No wonder the TV networks and streaming services are willing to pay so much for the rights to broadcast football. And Americans keep watching, despite all the ads, because they find all those crescendos irresistible.

5. This time it’s for real: soccer really will catch on in the US

I had an animated conversation recently with a Wharton alum in London who is a Premier League fanatic. His thrust: “Did you know there are only 12 minutes of actual play in an NFL game?” My parry: “The problem with the Premier League is you never know if, let alone when, anything will happen.”

America’s historical antipathy to soccer is the flipside of my crescendo theory. How many times has the sport been just about to “take off” stateside? From Pele, Beckenbauer, and the New York Cosmos to Mia Hamm, Brandi Chastain, and the US World Cup winning women.

Soccer has failed to launch, in large part I believe, because unlike baseball (with the full count), basketball (the shot clock), and football (third down), there are no built in mini-crescendos occurring during the game. That is why when someone finally scores, the euphoria among fans and commentators is extraordinary.

This time really might be different, because demography really is close to destiny. Soccer moms may not really love soccer, but they want their daughters to play and get the benefits of team-based competitive sports. And they would prefer their sons played with the round ball rather than the pigskin because of all the horrific stories of brain injuries in American football. Add to this the fact that soccer is a religion in Latin America, and that Latinos are the fastest growing and Hispanics the fastest growing part of the American population.

Even the Chinese and the Indians are into soccer these days—judging by the popularity of the local professional leagues and the European elite game in both countries. The world’s game really is poised for liftoff in the US. The first target is number 4 in the American pantheon—the NHL, a game with no mini-crescendos.

It will take time for soccer to rival the American big 3—football, basketball and baseball—but it has time on its side.  And I believe this time the hype is real.

My Thanksgiving holiday was full of family and friends, and I am extraordinarily thankful for that. I am also thankful that the longest of long weekends gave me the chance to ponder a little about football, in all its forms, and with all its consequences and implications.

Geoffrey Garrett is Dean, Reliance Professor of Management and Private Enterprise, and Professor of Management at the Wharton School of the University of Pennsylvania. Follow Geoff on Twitter.