Why Mark Cuban’s Anti-NFL Argument Is Flawed

He's one of the most successful businessmen in the sports world, but Mark Cuban's view of the NFL is severely flawed.

Mar 26, 2014 at 9:57AM

Steelers

Mark Cuban, the Dallas Mavericks owner and multi-billionaire, who's no stranger to headline-grabbing comments, recently told reporters he thinks "the NFL is 10 years away from an implosion." In a subsequent Facebook post, Cuban listed five risks in support of his hypothesis. Although I have deep admiration for the man, I think each one of his points is wrong.

Cuban risk No. 1: Low youth football participation
Cuban writes:

"I wouldn't want my son playing football, would you? I'm sure helmet technology will improve over the next 10 years, but why risk it? There are plenty of sports to play." 

It's no secret youth football is in decline. According to ESPN, Pop Warner participation fell nearly 10% between 2010 and 2012, primarily due to "concerns about head injuries." USA Football has reported a similar shrinkage.

Why he's wrong
Cuban appears to imply a simple, but ultimately flawed chain of logic. If fewer children play football, fewer top-tier athletes will play, which could hurt the caliber of the NFL's on-field product. That much is possible. But will this reduce fan interest in professional football?

As Harris points out, the NBA, for example, is more popular than it was in the mid-'80s despite criticism from many former athletes that current play is of a lower quality. Even if the same thing happens to football, there's no reason to expect an "implosion." As an NBA owner, Cuban of all people should know this.

Cuban risk No. 2: Players behaving badly
Cuban is correct to say, "fans don't like to see players acting the fool." And he's also right to suggest that off-field troubles can hurt sponsorships. 

Why he's wrong
But to think, as he puts it, that "something [behavior-related] could impact the perception of the game enough to impact attendance and viewership" is ludicrous. Time and time again, fans have proven they are willing to forgive even the most inhumane of transgressions.

Vick

First image (above initial text), via Ed Yourdon, Flickr. Second image (directly above) is of Michael Vick in 2006, via Keith Allison, Flickr.

Just four years after Michael Vick's 2007 dog-fighting saga, he was again atop the NFL as one of its best quarterbacks. By 2011, Vick's name was more likely to be mentioned online in the context of fantasy football than dog fighting. Ben Roethlisberger, Reggie Bush, the list goes on -- football fans are quick to find redemption for controversial players if they get into the end zone.

Cuban risk No. 3: A jam-packed schedule
As I've discussed before, the NFL's recent decision to give eight Thursday night games to CBS (NYSE:CBS) might only be the beginning. Further expansion would allow the league to move some of its lesser-watched Sunday contests to another night, perhaps Saturday. By broadening its schedule to include more days of the week, the NFL can theoretically capture more viewers. 

Cuban suggests this would be a mistake. "No one wants to do the same thing every night," he writes. "How many days of NFL football are too many?" 

Why he's wrong
To the two-thirds of Americans who watch pro football, that question might seem laughable. Adweek and Harris report that nearly 80% of fans "never record" games, and instead choose to watch the action live. Hence the proliferation of products like NFL RedZone and Sunday Ticket, which allow multiple games to be tracked at once. 

By spreading out its schedule, more of the league's games would be nationally televised. A Saturday Night matchup between the Saints and Panthers, for instance, is better for out-of-market fans than if it aired on Sunday afternoon.

Obviously, the NFLPA won't allow games seven days a week -- proper rest time becomes a problem -- but if Thursday works, why not Saturday? And why not Friday? Fans, particularly those out of market, would be happy to have more chances to watch their favorite team.  

Cuban risk No. 4: Fantasy football
Close to 30 million people play fantasy football each year. That's about 15% of the NFL's casual fan base in the U.S., and four times larger than the number of people who play any other fantasy sport.

According to Cuban, though, fantasy football is the NFL's "biggest risk." Confused? Again, he provides a plausible, but ultimately flawed chain of logic: 

Could a $100 billion venture [his estimate of the NFL's value] really be dependent on how many people sign up for leagues to get points for plays and bragging rights with their friends? If the answer is yes, that is a problem for the NFL and to a lesser extent all pro sports.... We all know from history that very few tech-based businesses live on as they currently are forever.... And Fantasy Football at its base is a tech-based form of entertainment.

He adds, "Could there possibly be a new technology or new form of entertainment that impacts the popularity of fantasy sports and has a big impact on not just the NFL, but all pro sports at some point in the next 10 years? I bet yes." 

Why he's wrong
Ten years from now, 60 million people will be managing fantasy football teams, if current trends hold. By this date, mobile players should outnumber non mobile users two-to-one. Technology is aiding fantasy's growth, yes, but Cuban is wrong to think the NFL is "dependent" on it.

Whether it's new games like Fan vs. Machine or the multitude of daily formats available, there are already alternatives to the traditional, 10-man, one-champion setup. The FSTA, for example, reports the average user spends $111 on fantasy-related costs each year. And those that play new, daily games are just as likely to spend this much money as their traditionalist peers.

If a new type of game does take the crown from fantasy sports in the next decade, there's little to think it will hurt the NFL. In fact, it's just as likely that an alternative could help the league if it's geared toward the casual fan. Remember, 85% of all football fans don't play in a fantasy league. Why can't that number improve?

Cuban risk No. 5: Reliance on traditional TV
Lastly, the Mavericks owner envisions "the risk of TV changing," and more specifically, he states, "The NFL, because of its audience sizes, more than any other pro sport, needs traditional TV to stay strong."

Why he's wrong
There's no denying the cable landscape is changing. But that doesn't mean the league isn't prepared. NFL Now, which is on the verge of being released, gives fans access to a pro football streaming service for free. Like Time Warner's (NYSE:TWX) 120 Sports, Now will have a massive online footprint, and it's compatible with nearly every entertainment medium, including mobile devices. Although live games won't be available initially, Now lays the groundwork for that option going forward.

Cuban also says he thinks "there is a smaller audience of people who would want to watch the NFL on a mobile device." That's technically correct now, but in the future, it's possible preferences will change. As I mentioned, the shift to mobile is already occurring in fantasy football, and Now could drive further change among casual fans.

The bottom line
Whether it's youth participation, schedule changes, or new technology, Cuban's arguments are much ado about nothing when compared to a bigger risk: Massive exposure from concussion litigation.

If all existing settlements are unsuccessful -- something I've discussed in the past -- damages could potentially hit $10 billion, according to some estimates. Eleven-figure legal costs would eclipse the NFL's annual revenue. Of course, this is a doomsday scenario, but one worth watching.

And as mentioned above, cable may be going the way of the dodo bird. But do you know how to profit? There's $2.2 trillion out there to be had. Currently, cable grabs a big piece of it. That won't last. And when cable falters, three companies are poised to benefit. Click here for their names. Hint: They're not Netflix, Google, and Apple. 

 

Jake Mann has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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