Tuesday, August 26, 2014

Squeezing Extra Profits From the Knuckle-Draggers: The Millions Just Waiting to Be Made From a New Name for Washington's Football Team

-- Posted by Neil H. Buchanan

Last Friday, the editors of The Washington Post announced that they will no longer refer to the city of Washington's NFL team by its official name, the Redskins.  "[W]hile we wait for the National Football League to catch up with thoughtful opinion and common decency, we have decided that, except when it is essential for clarity or effect, we will no longer use the slur ourselves."  Here, I will not engage with whatever remains of the debate over whether the team name should be changed, since that would simply be piling on.  (Sorry, but a post like this has to include at least one sports pun.)  Instead, I am interested in why the owner of the Redskins, Daniel Snyder, is missing out on a way to play both sides of the ball and profit from a name change.  (Last pun.  I promise.)

Along with TV money, merchandising revenues fuel modern sports, at both the professional and college levels.  Selling team jerseys and other logo-ed items to obsessed fans is a huge business.  It was not always thus.  If you watch clips from games in the Sixties and Seventies, and keep an eye on the stands, you will see something that looks strange: People wearing overcoats, parkas, fedoras, plaid scarves, and other everyday wear.  As an adolescent, I was a big fan of the great Minnesota Vikings teams that went to four Super Bowls.  (Yes, they lost all four times, but not consecutively.  I'm looking at you, Bills fans!)  I really, really wanted to buy a Vikings team jersey, but it was nearly impossible to find them; and those that were available had been priced prohibitively.

By 1999, however, when my brother and I attended a Kansas City Chiefs game, we were almost the only people in the stands who were not wearing licensed logo gear from the home team.  If a crime had been committed there (and surely there were many), a witness would have had an impossible time with a line-up: "Um, officer, I think it was one of the 80,000 people wearing a Chiefs home jersey, number 88."  (Let us leave aside the racist elements of the Chiefs' name and logo.)

From a revenue standpoint, the problem is that fan bases are finite, and even when the fans have a seemingly insatiable desire to own team merchandise, their willingness to own multiple copies of the same gear does have limits.  Even the most obsessed current fan of the Vikings that I know owns "only" one home and one away jersey for each day of the week.  This was very profitable for the Vikings while it lasted, but not a long-term revenue source.

The solution that NFL teams first tried was to change teams' uniforms every few years.  Suddenly, the kid who cherished his official Giants jersey discovered that the team had changed the uniforms, just as Patriots fans had discovered the year before, and nearly every team in the league soon followed suit.  The helmet lamps were suddenly the wrong color, and had the wrong logos or letters.  (Many Giants fans, I'm sure, felt compelled to replace helmet lamps bearing the "Giants" swooshy logo with the classic NY logo.)

When that strategy had been pushed as far as possible, the teams discovered "throwback" uniforms, where they would have players wear the uniform styles from earlier eras.  In some cases, this meant bringing out incredibly ugly, long-forgotten jerseys like the Pittsburgh Steelers 1933 uniforms.  In others, it simply meant having the team wear the same uniforms that had been superseded a few years earlier.  In each case, the "new" uniforms were a new must-own for fans.  At the college level, this reached its absurd nadir a few years ago, when both Michigan and Notre Dame agreed to play their annual game in stylized throwback uniforms.

None of these revenues are safe without trademark protection.  Uniforms are easy to copy, and cheap to produce, and the NFL and its teams thus aggressively protect their trademarks by policing sales of knock-off merchandise.  It was thus big news earlier this summer, when the U.S. Patent and Trademark Office (PTO) canceled the Washington team's trademark protection, because the team's name and logo meet the legal definition of "disparaging," making them ineligible for legal protection.  However, according to The Washington Post's article describing the decision: "The ruling cannot stop the team from selling T-shirts, beer glasses and license-plate holders with the moniker. ... And the trademark registrations will remain effective during any appeal process."

Snyder, the team's owner, "has steadfastly refused to consider a name change, saying the name and logo honor Native Americans."  The question is, why is he still doing so?  One possibility is that he is simply a jerk, a theory that many of the teams' fans (and any sentient observer) would strongly support.  Certainly, one can see why he would want to fight the PTO's decision.  But Snyder is not one of those early owners of NFL teams who made all of his money by buying a team for $25,000 in the Sixties and then seeing it become a billion-dollar asset.  Snyder was a private equity billionaire, and he bought the Redskins in the late 1990's essentially as a toy.  (See also Cuban, Mark.)

Which means that Snyder is not a romantic or a man of principle, and he is not someone who would make a stand for anything other than money.  So why is he missing out on a clear opportunity to make a jujitsu move with the team name controversy, and double his profits?

We know that there would be a backlash against a name change.  About two decades ago, there was a protest by a Native American group outside the Washington stadium, which was interrupted by Washington fans dressed in cowboy outfits, who surrounded and lassoed the protesters.  It was ugly.  Even short of that, however, there are still plenty of people who would shout "political correctness" and suddenly become deeply devoted to keeping the "Redskins tradition" alive, if Snyder were to change the team's name.  There are still diehard groups complaining about colleges that changed their racist names or logos decades ago, and it would be even more intense with the Washington team (because everything is more intense with that fan base).

But that merely means that Snyder could make a profit from both groups of fans.  He could announce that he felt "bullied" into changing the name, citing efforts in Congress to force his hand.  Inciting the public's sense that he had been wronged, he could then grimly say that he had no choice, and parade his star quarterback in front of the cameras, wearing a spanking new uniform for the Washington Swamprats.  (OK, that would be a bit too accurate re DC's climate and geography.)  The website for buying the new merchandise could flash across the bottom of the screen while Snyder shook his fist about the injustice of it all.

What of the PTO's ruling?  If he were ultimately to lose the appeal, Snyder could still make whatever diminished profits that he could earn in an open market.  Even if that turned out to be zero, he would still have been given a silver-platter opportunity to sell his fan base gajillions of dollars of new branded crap.  But if he won on appeal, or more intriguingly, if he could negotiate with his opponents to drop the claim in return for his agreement to choreograph an oh-so-reluctant name change, then he would be able to gain extra profits from the electrified racist ... er. traditionalist ... base of fans who will be chanting "Redskins forever" for years to come.

The interesting thing about this strategy is that Snyder does not need to say different things to different audiences.  He could go to his grave claiming that the name was not disgusting, and the people who disagree with him would still be satisfied.  He would merely count on the enraged diehards to double his profits (or more).

I doubt that I am the only person who has thought of this strategy.  What surprises me is that Snyder has not thought of it himself.  How often does a completely unprincipled person have a chance to profit by doing the right thing, all the while playing to the ugliest elements of his customer base?


Michael C. Dorf said...

Neil, as an economist you know the answer. Because what you have described would make easy money for Snyder, he must have done it already. All news to the contrary is therefore counterfeit.

David Ricardo said...

Before anyone gets all teary eyed about the Post and its scruples it should be know that their decision not to use the team’s name, the Potomac Drainage Basin Indigenous Persons (thanks to Gregg Easterbrook) applies only to its editorial section and not to its sports section.

“What we are discussing here is a change only for editorials. Unlike our colleagues who cover sports and other news, we on the editorial board have the luxury of writing about the world as we would like it to be. Nor do we intend to impose our policy on our readers. If you write a letter about football and want to use the team name, we aren’t going to stop you.”

And if one looks at the sports section today the offensive name is plastered all over it. Not exactly Profiles in Courage is it

As for why Mr. Snyder refuses to change, Mr. Buchanan has identified that reason, the man is a total and complete jerk acting against his own best interests and in a manner offensive to almost everyone because, well, that’s what jerks do. And the real mystery here, how did this guy ever make dime.

Emma O'Connell said...

Before anyone gets all teary eyed about the Post and its scruples it should be know that their decision not to use the team’s name, the Potomac Drainage Basin Indigenous Persons (thanks to Gregg Easterbrook) applies only to its editorial section and not to its sports section.
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