Thursday, January 20, 2005

The NFL Has It Done Right

As I’ve stated before, every now and then I like to venture out of the realm of politics and discuss something else. Today I discuss the relative merits of the major professional sports leagues – the NFL, NBA, major league Baseball, Soccer and the NHL.

My conclusion is that the NFL (National Football League) has done all the ingredients right to become the #1 sport in America. It has carefully listened to the fans and responded as quickly to the fans, and this is why they are #1.

To understand why, it is useful to compare the various professional sports leagues and discuss where the others fall short. You the reader do not need to be a sports fan to follow the train of logic that I will present. And you will find it entertaining.

I’ll start with major league Soccer in the U.S. The entire sport’s games seem to be too long and little scoring action is evident. In short, it is just a bunch of men kicking a ball around the field. So little scoring takes place that it just plain boring. Nothing more needs to be said about soccer.

The NFL has the right balance between a meaningful regular season and postseason, playoff games. Of the 32 teams in the league, only the 8 division winners and 2 wild card teams each from the 2 conferences qualify for postseason play. The 2 teams in each conference with the best regular season records that won their divisional titles get a 1st round bye for playoff action.

This means that the regular season was meaningful. Meritorious play was rewarded with time off for their injured players to heal and be as ready as they can for postseason play. And since only 12 teams out of 32 qualify for playoff action, there is something to fight for during the regular season, which makes it even more meaningful.

This playoff format was carefully thought out and has worked excellently. Playoff race qualifying can actually come down to the last game where the final participants are decided for postseason play. This makes almost all the regular season games meaningful.

The same cannot be said for major league baseball. Far too few teams qualify for postseason action. There are only 6 divisional leaders and 2 wild-card teams out of a total of 30 baseball teams in the NL and AL.

There are 3 divisions in each baseball league. This was a fluke. The 3-division format with one wild card team was arrived at by accident. The original idea was to retain only two divisions. The Chicago White Sox, who would have been placed in the Western division, objected because the local TV telecasts of their games often meant that half their scheduled night games would have started at 11:00 pm Eastern time, or 10:00 pm Central Time – a time when most viewers would not be able to watch TV games in entirety and hence less ad revenues could be justified because no audience would have been there to see them. Other teams voiced the same objection.

So a central division in each league was created to mollify the objectors. Still, however, much of a 162-game schedule would be rendered meaningless since too few teams would be around to be close enough to a leading team to be able to challenge for a postseason.

Baseball has traditionally been stingy in its playoff format. There was once a time when the leagues had fewer teams and there was only one division in each league and there was only the World Series that existed as the only postseason action. Fans have less interest in the sport as a result.

On the other hand, NHL hockey has too many playoff teams that qualify for postseason action. The playoffs tend to last today almost 2 months. It is hard for any team or fan base to maintain a tension level that creates sustained interest for that long a period of time.

Also, with too many teams qualifying for postseason play, why ought the league to bother with a regular season schedule? Why not just have a tournament and be done with it?

NBA basketball has a similar attention to a reasonable playoff format as the NFL. I tend to believe it falls closer to the NFL in the proper balance than does the NHL or baseball.

The problem with the NBA, the NHL and baseball is that there are too many games in the regular season. 84 is too many for the NBA, 82 too many for the NHL in a particularly physical sport. And certainly, 162 games in a baseball season are too many. The greater the numbers of games in a season, the fewer exist which are meaningful.

The NFL also has the right balance of punishment for bad, illegal or foul play. Offending players are reasonably fined, suspended and the like. The only quibble I have with the NFL is that if a quarterback tries to get rid of the ball and is penalized for intentionally grounding the ball, the defending player who forces him into that situation should be credited with a sack, because the penalty also comes with a loss of down, which is what would have happened had a sack occurred. That should also apply for a safety in the end zone if a penalty was called for holding – which under NFL rules, is a safety – if doesn’t do so already.

The same balance of penalty cannot be said for baseball. Currently, major league baseball is enduring an anabolic steroids use scandal by what is believed to be a majority of its players. What is worse is that major league baseball has been trying to cover it up and hope the scandal goes away. It won’t.

I find it to be an insult to great players of the past whose records and statistics are being wiped away by those who cheat by using performance-enhancing drugs such as steroids. Certainly Hank Aaron, Babe Ruth, Ted Williams, Willy Mays, Frank Robinson never used steroids and didn’t need to use them to accomplish what they did in their glorious careers. It is an affront to their memories that today we have baseball players cheating to surpass these long-time records honestly earned just so that the latter can sign lucrative long-term contracts to enrich themselves.

What example is being taught to our youth by such actions? That it’s all right to cheat?

The NFL has long had a drug/substance abuse policy that is enforced. Its reputation is not under question, while baseball’s certainly is.

The NHL, although not mentioned in any steroids scandal has its own problems concerning cheating and foul, rough play. A recent incident that sent a Colorado Avalanche player out for the season by another opposing team player, and possibly ruin his career for life illustrates the problem.

The offender was lightly punished. If the NHL was serious, it should have enacted a suspension equal to the amount of time lost by the injured player. If the injured player has his career ended, then the offender ought to be barred for life.

Penalties and infractions go uncalled by game officials in the NHL and un-enforced because of a time-honored tradition by official not to call penalties during postseason play for fear that a penalty could decide the outcome of the game.

Huh? So what? If you can’t play by rules, then why have them in the first place? If a game is decided by the result of a penalty being enforced, so be it. Next time, an offender won’t do the act that caused such a disaster. Not enforcing rules for bad conduct creates a moral hazard whereby an offender is encouraged to continue, knowing full well that he won’t be punished for what he did.

The NBA also has enforcement problems. For a game that is technically non-contact, physical play around the basketball net is quite common. The NBA is indeed a contact sport despite all claims to the contrary. This needs to be addressed.

The NFL also has it right when it comes to scoring. Exciting plays occur because of a long bomb touchdown pass.

The NHL also has the breakaway that’s exciting. However, there are too many lines in the skating surface where passing the puck would be considered offside, and play is often stopped frequently during the course of any game. Eliminate the red line at the center of the rink and the game would open up considerably. Also eliminate the illegal two-line pass rule, whereby a play is called “offside” because the puck crosses two lines. The blue line can remain in place where all attacking players must remain to conduct their offense.

Also, make a goaltender who commits an infraction to serve his penalty. Currently, a goaltender does not serve a penalty he commits. Another player serves his time in the penalty box. Forcing a goaltender to serve his time would place a brilliant opportunity for the opposing team to mount an offensive strategy to score a goal.

Also, the NHL would be better served if they adopted the NBA basketball principle when it comes to fouls. Basketball allows an extra free throw if the affected player scores a basket despite being fouled. The NHL could, where a delayed penalty is called and where they score, receive an additional minute penalty time instead of 2 minutes to try to score again. The idea is to punish infractions of the rules and make the game more exciting.

Once, the NBA had no exciting play to compare to the NFL’s long TD pass or the NHL’s breakaway pass and score. The 3-pt basket from long range is the answer, and it was long overdue for the NBA to make it a legal play. It may have saved the NBA from the fate that now embroils professional hockey.

Rule enforcement in the NBA is comparable to the NFL in fairness. The same can be generally said with regard to major league baseball, with the exception of the steroids debacle.

The NFL also has become the #1 sport because it is receptive to further rules changes that can eliminate abuses and result in better play. The competition committees conducted after the regular season is over ensure that fairness is exercised.

Baseball, the NHL and the NBA are, however, slower to act. Baseball is the worst offender and is the most resistant to change of any kind.

Also, the NFL is #1 because its salary structure is friendly to the idea of competitive balance of teams within the league to be able to win championships. I like the idea of a salary cap within the NFL. Older veterans are released because every team has the same salary cap restrictions and talent has an opportunity to migrate freely among have and have-not teams. It may not be a perfect answer, but it works well enough to make the NFL the #1 professional league.

The same cannot be said of baseball, the most resistant to change of all the major professional sports. Today, it has a joke of a salary cap, called a luxury tax levied. Only one team meets the level of player salaries needed to invoke a luxury tax. That team is the New York Yankees who constantly gobble up new free agent talent with lucrative contracts year after year. Yet despite this, they haven’t won a World Series since 2000.

But that isn’t the point. The New York Yankees are always able to field a competitive team that wins its division year after year and continues to make postseason appearances on a regular basis. Other teams in baseball have little to no hope of postseason play and have to resort to developing excellent farm team systems. But as soon as these new, promising players make their fame in smaller markets, their teams lose them to the New York Yankees or other teams that can afford to pay them. That is what destroyed the team formerly known as the Montreal Expos, who are now the Washington Senators.

The competitive structure of baseball is almost nonexistent. There is no revenue-sharing agreement among the teams in the league as in the NFL, which shares revenues from every team on a 60%-40% basis for the home team.

The same problem exists within the NHL. Although the fact that the NHL has no national TV contract the size of the NFL has something to do with it, its 30 teams do not have a competitive balance, there is no salary cap, revenues are not shared league-style, and now the NHL in is lockout/strike – there is no NHL season to date, and scant likelihood that there will ever be a regular season this year at all.

Since the NHL is the weakest professional sport, it has the most to lose if protracted labor problems continue. Hopefully, there are 25 new owners of 30 franchises and they are the ones driving the lockout and demanding changes that may result in league survival.

Baseball also has labor problems. Major League Baseball went on strike in 1994. It is now a trivia trick question to ask who won the 1994 World Series, because nobody did.

Baseball lost millions of fans because of that strike, and it took 10 years to get them all back in the stadiums again. It was only because of the drama of Sammy Sosa and Mark McGwire battling to see who could break Roger Maris’ season home run total of 61 that drew fan excitement back into baseball.

Now, with the steroids scandal erupting, the records of Mark McGwire’s 70 home runs, Sammy Sosa’s 66 home runs that season, and then 3 years later, Barry Bonds’ 73 home run season are all being called into question for fear of being tainted with cheating.

We now also have a problem with the NBA this season of public relations because of the game that the Indiana Pacers and Detroit Pistons played in Auburn Hills. Michigan. In that game, as you may recall, several players entered into the stands when a fan threw beer at a player, and some fans also entered the arena’s playing field. It was the biggest black mark on the NBA to date. Real punches were thrown.

While the NBA commissioner acted swiftly to punish the offenders, a federal court got involved and reduced the suspension of Indiana Pacer’s Jerome O’Neill to 15 instead of 25 games. This was an unwarranted intrusion by the legal system and this is certain to undermine NBA Commissioner David Stern’s authority in a sport that is ruled basically by the players and not the management.

The NHL also has its own image problems because it is generally viewed as mayhem on ice. This could be avoided with better enforcement of its own rules.

The NFL comes across as the best in public relations. It has had some incidents of notoriety, but it has tended to handle them better than the other professional sports.

All the other professional sports leagues would do well to study the example of the NFL and how it has managed to get almost everything right.

In a testament to the wild success of the NFL, one of its most tremendous successes isn’t even a sports event that is reflected in the standings – well almost not, until later.

I refer to the NFL draft. Here again, the NFL outshines the NBA, NHL and baseball by far. It isn’t even contested who has the best system. Nobody or few watch a baseball draft, or that of the NHL or the NBA. But the NFL Draft of college players is an event that is watched by millions.

The NBA has only two rounds in its draft. That is too small. It is testament to the league being dominated as a player-controlled league. It should expand its draft to at least 4 rounds to draw more fan interest.

Baseball also has a draft, but few have an interest because it takes years to develop enough talent to make a team competitive. Extremely few rookies can make it in baseball right out of college or wherever else they came from.

The same is true for the NHL. Very few impact rookies come out of the Junior A leagues in Canada, the colleges in America or the places/leagues in Europe that can make an immediate contribution to a team so it can achieve postseason play that season.

So the drafts of hockey and baseball tend to generate little fan interest.

Although the NBA can and does have players in their drafts that can contribute immediately to the success of any team, the fact that there are only 2 rounds of drafting is sad indeed. The remaining players become free agents, and this favors the status quo of existing powerhouse NBA teams to which these free agents might be drawn to, and is a liability to the concept of competitive balance.

That’s why it takes 3 or 4 years for a team on the rise to become a legitimate contender.

I also take issue with the fact that the NBA allows high school children to be drafted, thereby depleting the ranks of college basketball programs of talent. There ought to be an age limit minimum for the NBA draft. Duke University lost such great players as Luol Deng after his rookie season to the NBA, and also Shawn Livingston this year, who went to the NBA straight from high school. NBA great Kobe Bryant also was lost to the NBA by Duke, who would have had Bryant for at least 2 years. I imagine what great teams Duke would have had if the NBA enforced an age limit.

The NBA is robbing the college game of basketball to enrich itself. The public has also noticed. The Olympics were a theater where the NBA could send some all-stars and sweep to the gold medal. Not any more. The act of drafting high school talent left the NBA teams without players who could learn the most basic sports skills that they would have learned had they attended college.

But contrast all this with the NFL Draft.

This event has 7 rounds and places to play for on a team that can have 53 men on its roster plus 5 practice squad members, for a total of 57 members. If an NFL team has a decent scouting department, it will be able to discover the diamonds-in-the-rough that can contribute right away to a team’s success. It is then and only then that any undrafted college players can go to other teams. This assures competitive balance.

The NFL Draft has become an event of hope for the fans of ALL NFL teams for almost immediate future playoff success.

There is reason for such optimism. There are the stories of the great 1970s Pittsburgh Steelers teams that had 5 of its starters discovered in one NFL Draft alone.

And there is the story of the Minnesota Vikings who traded 7 draft picks for one player, Herschel Walker, to the Dallas Cowboys. This act was credited with rebuilding the Dallas Cowboys into the Super Bowl winners of 3 Super Bowls in the 1990s.

That is the dream of NFL fans that now watch the annual NFL Draft with great interest. Thanks to the competitive balance in the NFL, almost every team has a chance within 2 years to see their team from the ashes of failure and mount a challenge to win the Super Bowl, if not outright win it.

Witness the dramatic rise of the Carolina Panthers last year. Two years before, they went 1-15, with their only win being the first of the year. Thanks to great draft picks and shrewd free agent signings, they rose to 11-5 two years later, defeated the NFC teams and barely lost in the Super Bowl, 32-29, to the New England Patriots.

It is a success story like this that makes NFL fans look to the draft to see who their favorite team selects. One could go on and on about different examples of a rise to star status, but the picture is clear: competitive balance made this NFL Draft an event on itself and it gives hopes to all NFL fans no matter whom their favorite teams are, a chance to think that their team could win.

It gives them hope.

What hope exists for fans of teams in baseball, hockey or basketball as does exist in the NFL? How does their sport compare to the NFL? Can a fan of other sports hope that their favorite team can one day rise to the top and win a championship within a few years?

I doubt it.

And that’s why the NFL is #1 today.

Hey NHL, NBA, Soccer, and Major League Baseball – are you listening to your fans?

Wednesday, January 19, 2005

RIAA: The Big Internet Bully

MP3 downloading is a widespread Internet phenomenon. It is highly popular.

The Recording Industry Association of America (RIAA) is presently conducting the most disastrous, most stupid strategy that they could ever devise to stop this activity.

The position of the RIAA and its attorneys is that this is stealing copyrighted material. The downloading public shares no such opinion. In fact, their attitude toward the RIAA is that of hostility.

Who is right? The answer is that the customer is always right.

But the sad fact about this is that the RIAA has decided to disregard this time-honored tradition. It is actually hostile to its buying public. I am on the side of the downloaders.

Downloading is not stealing. There may be people who get their music for free, but the amount that the RIAA fears is nowhere near the actual amount that they claim.

Historically, the entertainment industry has long been jealously guarding its products. It has fought technology for well over 70 years – almost since its inception. This mentality, attitude and strategy have survived ever since. The RIAA is but the latest continuation.

Let’s go into the past to review the stupidity of the entertainment industry and examine a few cases of its behavior.

When radio was invented and stations searched for content to broadcast, the entertainment industry fought this technology back in the 1920s/1930s. Just imagine that! They fought radio play of their artists’ music!

Just how did they think that people would know of any new music or any new artists if they didn’t hear it on the radio? The entertainment industry expected the public to attend expensive live concerts of the said artists, or expected the public to buy LP recordings. They ignored the possibility that offering music on the radio might create a new market where none had existed before.

That turned out to be the case when music was finally allowed to play on radio stations. The radio industry paid royalties to play copyrighted music per airplay. The public got to hear popular music for free over the air, and if they liked it, they bought the records. A new market was created that has been lucrative ever since.

Yet the reaction of the entertainment industry is to fight new technology at every turn and ignore new potential markets to market their products. The entertainment industry seems to persistently forget that the public doesn’t seem to need music, films or books to survive in life. They need food and water. Therefore, the arts are entirely a discretionary purchase as far as economics goes. The RIAA seems to have ignored this fact too.

Flash forward a few decades to the invention of the reel-to-reel tape recorder, which could copy music heard over the radio. The entertainment industry fought this technology too.

It fought the 8-track tape and the cassette tape and the related recorders that were produced by manufacturers.

And let’s not forget that entertainment industry also fought the VHS and VCR videotape technologies as well. The entertainment industry lost the case against VHS and VCR in the U.S. Supreme Court, who allowed the public to record what they watched on TV.

CD technology and digital audiotape were also vigorously fought by the RIAA.

The Internet and the related MP3 format are but the latest battleground for the entertainment industry to resist the advance of new technology. True to historical form, they are deploying a battery of briefcase-toting lawyers to make their case.

They needn’t have bothered, had they heeded the lesson of IBM.

The lesson is that a company cannot force and increase its market share by suing their competition out of existence. This is especially true when the product is one that while the public might want, it doesn’t need to buy.

IBM was incensed at losing half their market share to clone computer makers who used the same off-the-shelf parts and components to make their products cheaper than and of comparable quality to that of IBM’s.

IBM set out to invent new technology that was proprietary and they employed lawyers to sue anybody unauthorized (who didn’t license the technology) to reproduce their technology. The public revolted at proprietary technology, yet this still doesn’t seem to stop some companies from suing this failed strategy. Today, Microchannel and the OS operating system are not the dominant forms of computer technology, and IBM no longer is the leading maker of PCs today. Those never caught on. Lawyers can never increase your market share.

People do not prefer the incompatible, proprietary systems because they cannot upgrade their PC systems properly. People have a natural hatred for monopolies and they prefer choice to having been forced to buy something available without an element of choice.

This is a lesson that the RIAA has been tremendously slow to see.

There has been a two-pronged attack upon the MP3-downloading practice by the RIAA.

At first, the RIAA went after the Internet companies that had central servers that held illegal copies in MP3 format that users downloaded for free. The RIAA was somewhat successful in that it succeeded in shutting down Napster in this form.

Today, Napster is pay-for-music service, and the entertainment industry is getting paid for its copyrighted music.

However, the Internet quickly reacted. File-sharing programs became the choice of downloaders. These programs have no central servers of a company to sue. Every user of a file-sharing program has his or her own computer as a separate server. Now the act of suing becomes tougher because over 11,000,000 users have to be individually sued.

The RIAA decided to go after individual users, after long hesitating to do so because of a potential backlash from the public.

Emboldened by their success in the courts by shutting down Napster and others, they decided to go after individual consumers anyway. The result at present is mixed and the reaction of the Internet-suing public has been predictably hostile.

The main reason the RIAA decided to attack the downloading phenomenon was that they had lost over 30% of their record sales, and they pronounced the phenomenon of downloading guilty for this market performance.

The RIAA is wrong. They have no proof of this. What really happened is that during 2001 and thereafter, the economy declined. When the economy falls, consumers cut back on discretionary purchases. Music products and restaurant patronage are two of the first to be reduced as discretionary purchases.

The RIAA doesn’t understand this phenomenon. The restaurant industry does. That is why it’s traditional in most sit-down restaurants that you don’t pay for your meal until you have finished eating it. If the food isn’t good or the service is terrible, you will never return there. Not only does the RIAA understand that their products are discretionary in their purchase potential, they don’t care. Their attitude reflects this mentality.

When the RIA started to go after individuals, the reaction of the public was hostile. The RIAA was seen as a big bully picking on a defenseless person. The RIAA had an army of high-priced lawyers to beat up on single, individual downloaders.

It was seen as a totally unfair fight. The consumers who were caught with downloaded, copyrighted material faced fines of $11,000 per song. This penalty was commented upon Senator Norm Coleman as being excessive. Senator Coleman, (R-Minnesota) headed a committee that looked into this issue.

I know of few people who were on the side of the RIAA, yet they not only didn’t care, they act arrogantly and proclaimed that there was even more to come.

They are paying the price.

I went into one of many chat rooms where downloading music was the subject. Scanning through over 1,000 posts, I found only 3 posts where the poster thought that it was stealing to download copyrighted music. The vast majority of computers were totally hostile to the RIAA.

A sample of the viewpoints offered is related below.

The public here thought that paying $15 or more for a CD that had only one hit song by the artist was exorbitant.

A few posters also mentioned the music industry stealing the original works of black rhythm and blues musicians from the 1940s and never paying them a dime for their work. So they thought that the RIAA’s actions were hypocritical.

Most thought that the most that somebody should pay for a CD was $5-$10, and no more than $1 for a single song.

Others commented that there was no way that somebody should have to pay full price for a CD if the “filler” songs weren’t heard first, and that downloading the song should be an option to tell whether it was worthy to buy.

Others complained that many songs simply were rare or just unavailable commercially to buy. Downloading a rare form was a way to get it. Here is another niche market that the music industry could exploit.

Basically, all these comments prove that nobody cheers for the bully, and the RIAA has failed to appreciate this fact and its consequences.

And here is another fallacy that the RIAA believes. It thinks that if they were successful in prevented unauthorized copying of copyrighted material, then those who did download such material would become instant buyers.

They are wrong. There are some consumers that the RIAA never had, or will have because they won’t pay for music that they didn’t otherwise want that was available. If you don’t have a market, preventing one way of getting music is NOT the way to create instant buyers. They’ll just do without.

In fact, a study from a UNC-Chapel Hill professor showed, using actual data from a file-sharing program database, showed that the downloads were not popular music that would have been bought otherwise by these users.

I’ll go further than that. People download music for different reasons. One reason is that the price is too high for them. They will not buy until the price goes down enough for them to purchase. Music aficionados as these will do without rather than pay what the RIAA wants them to pay. Suing them into bankruptcy is not a way to endear a buyer to your heart.

Others can’t find music because a live version or odd, rare cuts were never recorded.

Yet many others download music that they already bought in a format such as an 8-track, cassette or record format that they already paid for. The MP3 format is merely a different one that these users don’t believe that they have to pay twice for.

Copying music for which one had already has paid for in a different format and getting a copy in a form such as MP3 is allowed under the “fair use doctrine” that is entirely legal. It is highly likely that most copies downloaded are because of this.

CDs can be copied by a process known as “ripping” a CD. The wave file is converted into the MP3 format which translates the song into a file that is 1/11th the original size.

But apparently, somebody has been cruising the chat boards to see what the public thinks of the RIAA and apparently they now know.

WalMart and others are offering copyrighted music for about $1 per song. Even the price of a CD has come down significantly.

The MP3 controversy has subsided somewhat. I no longer see many news articles about the RIAA and its lawsuits of individuals.

But something has apparently happened since the price of pre-recorded music CDs have come down a lot, and copyrighted music is being offered at pretty much the price that the chat-room posters were demanding.

In this day of deflationary pressures, discretionary purchases are most at risk. It look as if the RIAA finally has been listening because it appears that they are content with half a loaf instead of full loaf – especially when that’s all you can expect.

The RIAA has ignored a huge potential market where users could download a mix of various songs at say, 50 cents apiece, mix and match whatever the user wants, and then download any CD art and then make their own custom CD.

How hard or costly could it be to maintain a database of high-quality MP3s on one server and have about 10,000 songs available? It would cost virtually nothing for the music companies to maintain. Production costs for CDs would be nonexistent because they don’t have to produce them. The consumer would buy his own blank CDs and record what he downloaded and paid for.

Instead of looking to embrace new technology, capitalize on a new potential market and exploit maximum profit potential, the RIAA chose to fight new technology and cause all the bad faith and ill will it received from the public.

As far as I am concerned, the RIAA can go to Hell until they formally and publicly renounce their policy of going after individuals. They chose the wrong path in a battle against new technology that they can never win.