National Football Cartel

How the Arizona Cardinals and their NFL brethren exert monopoly power to extract billions of dollars from American taxpayers

It's Super Bowl weekend, and, as usual, the Arizona Cardinals are nowhere near the playing field.

Despite the absence of their team, Cardinals owners Bill and Michael Bidwill will enjoy the game nonetheless, most likely from a well-appointed luxury suite inside New Orleans' Superdome.

It doesn't really matter who plays in the big game -- if you're one of the wealthy few to own a National Football League franchise.

All that ultimately matters to NFL owners is that the game is broadcast to a worldwide television audience.

Well, one thing more.

That the loot generated by Super Bowl XXXVI is divided up equally among all the NFL teams, including the Bidwills' perpetually miserable Cardinals.

It's truly a situation where the Bidwills win by losing.

Back in Arizona, the Bidwills know that eight Valley cities and Indian tribes are offering to spend more than $60 million to prepare a site for the Cardinals' new stadium -- a stadium that when the dust settles will cost the family nothing while shooting the value of the team into the stratosphere.

The stadium frenzy is so great that the City of Phoenix is moving quickly to scrap its long-range plan to build urban housing adjacent to the struggling Arizona Center and instead construct a second downtown domed stadium that will saddle the city with another financial loss and an urban design nightmare (see accompanying story).

From shared revenue to publicly subsidized stadiums, the Bidwills' membership in the NFL brings the reclusive family immense political power, far more than one would expect for a private business of its size.

In the past four years, the Cardinals and the NFL have engaged in a determined and often bungling effort to build a luxurious stadium featuring a retractable roof and a removable field.

The financial stakes are huge.

New NFL stadiums are gold mines for team owners, typically generating about $35 million a year in additional revenue compared with their old stadiums, confidential NFL financial data reveals.

For the Cardinals, the $35 million flowing from a new stadium would more than double the amount of revenue the team generated in 1999 while playing at Sun Devil Stadium in Tempe. Most of the money created by the new stadium will flow directly to the team's bottom line.

At the same time the Cardinals are receiving a stadium-induced windfall that will continue year after year, the value of the team is soaring. The new benchmark for an NFL franchise is at $700 million.

It's not the first time the family has received a windfall. In 1960, the NFL paid the Bidwills $500,000 to move the team from Chicago to St. Louis, an amount equal to the entire value of the franchise, according to NFL Commissioner Paul Tagliabue.

The best part of the story of the making of the Bidwill family fortune is yet to come.

The Cardinals' new "multipurpose stadium" will be paid for and operated using other people's money -- primarily $1 billion in taxpayer subsidies.


How could a medium-size business that generates only about $30 million in local sales be worth as much as $700 million? And how could this business extract $1 billion in public subsidies?

A New Times examination of the NFL's finances and the league's impact on Arizona provides some clues, including:

• Despite its roots in competition on the playing field, the National Football League operates as a powerful business cartel that restricts the supply of teams. This concerted action generates monopoly profits at the expense of millions of taxpayers, many of whom couldn't care less about the game; and football fans, who are forced to pay above-market ticket prices.

The league's 31 teams all benefit. NFL teams reported $385 million in operating profits in 1999 on revenue of $2.95 billion, confidential financial reports first obtained last summer by the Los Angeles Times show.

The profits are underwriting skyrocketing player salaries, steadily rising franchise values and the league's political cachet.

• The Arizona Cardinals receive about two-thirds of the team's total revenue from their share of the NFL's $18 billion television contract, postseason ticket sales and NFL merchandise sales. The NFL divides this money equally among all teams -- an amount that totaled about $65 million per team in 1999.

This money is in addition to the $30 million the Cardinals generated locally during the same year. The revenue-sharing formula means there is little incentive for a risk-averse owner like the Bidwill family to spend more money on players to field a winning team.

• The Cardinals' contribution toward stadium construction is far less than the $85 million the team claims. NFL and Tourism and Sports Authority officials say the Cardinals will receive about $28 million from the NFL, reducing the team's contribution to $57 million. The Cardinals should recover that investment when the team sells lucrative naming rights for the stadium.

• The state Tourism and Sports Authority, the public entity that will build, own and operate the facility, claims to be exempt from competitive bidding requirements for hundreds of thousands of dollars' worth of contracts. Most of the contracts so far have been given to businesses that supported the Cardinals during the Proposition 302 initiative campaign.

• The stadium will be a financial drain on the community in which it is located and will rarely be fully utilized, community leaders and economists say.

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