Tuesday, February 06, 2007

Is the NFL a Cartel?

The Economist's Free Exchange blog has a post in which they refer to the NFL as a "cartel":
Is football’s popularity a result of the cartel that runs the football league or is American football an innately more interesting game?

Economic theory predicts that the profitability of a cartel comes from the firms withholding some of its product to increase its value and/or charging the highest price possible without being undercut by its competition. ... Should the government intervene, break up the cartel, and make football games more frequent?

This analysis is just wrong. The NFL is no more a cartel than is, say, Dell or Toyota. The NFL is a single entity that competes in the sports entertainment industry along with a number of other actors.

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