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TheStreet Open House

Did The NFL's New Blackout Policy Work?

The NFL's optional revision to the blackout rule may play some role in this year's good fortune, but an increased airing of the league's financial details amid a sputtering economy likely plays a role as well. Republican Sen. Tom Coburn of Oklahoma pointed out that the NFL exists as a tax-exempt organization under Section 501(c) of the Internal Revenue Code and is trying to strip that exemption and tax league revenue, which was reported as $9.5 billion last year. That exemption makes it possible to take a look at commissioner Roger Goodell's $30 million salary, but also makes it very clear just how difficult it is to keep tabs on the cash coming into the league and how it is being disbursed to teams. Coburn estimates that the government could take in $91 million annually from all sports that are currently tax-exempt.

In truth, however, that increased scrutiny helped bring about the blackout rule change in the first place. The average NFL ticket price has increased by nearly $20, to $81, since 2006, while the U.S. economy started slumping during that same span. By keeping games off the air in their hometowns under the old rule, the NFL brought all criticism and ire down on the league itself. If you're an owner whose team hasn't been blacked out in years and who generally has a good relationship with your home market, do you really want your lesser league siblings dragging you down?

Of course not. By making the blackout rule change optional, the focus shifts from "The League" to the individual owners themselves. Keep in mind, it isn't "The League" that goes around with its hand out to local governments and taxpayers every time it needs a new scoreboard, new turf, upgraded seats or even a new building -- it's the individual owners. Any decision those owners make on the blackout rule is directly linked to the public trust: Accept the new 85% threshold and you're just a friendly, neighborhood team trying to help out the community. Refuse and you're a craven little miser who's only rooting for the bottom line.

Savvy owners realize that by buying up the occasional unsold tickets, offering concessions such as free beer (the Jaguars actually did this for season ticket buyers) and keeping games on air, they're building up good will to keep fans in the seat through the bad years and to get their tax money to build luxurious new seats in better times. It worked in Charlotte, N.C., which approved $87.5 million in public funds for upgrades to Bank of America (BAC) Stadium and a six-year commitment from Carolina Panthers after the team and its sponsors kept home games on air for the past few seasons. The Oakland Raiders and owner Marc Davis are hoping the team's embrace of the lower blackout threshold will help efforts to get a new stadium in Oakland and prevent a move to Los Angeles or elsewhere in California.

While good old-fashioned extortion is still a part of NFL owners' playbooks, the league's revised blackout rule prevents them from hiding behind the big, bad league while threatening their home market. With their red, white and blue shield is gone, cash-hungry owners are realizing that it pays to be nice every so often. If that means buying a few thousand tickets now to cash in a few million dollars later, why not?

-- Written by Jason Notte in Portland, Ore.

>To contact the writer of this article, click here: Jason Notte.

>To follow the writer on Twitter, go to http://twitter.com/notteham.

>To submit a news tip, send an email to: tips@thestreet.com.

-- Written by Jason Notte in Portland, Ore.

>To contact the writer of this article, click here: Jason Notte.

>To follow the writer on Twitter, go to http://twitter.com/notteham.

>To submit a news tip, send an email to: tips@thestreet.com.

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Jason Notte is a reporter for TheStreet. His writing has appeared in The New York Times, The Huffington Post, Esquire.com, Time Out New York, the Boston Herald, the Boston Phoenix, the Metro newspaper and the Colorado Springs Independent. He previously served as the political and global affairs editor for Metro U.S., layout editor for Boston Now, assistant news editor for the Herald News of West Paterson, N.J., editor of Go Out! Magazine in Hoboken, N.J., and copy editor and lifestyle editor at the Jersey Journal in Jersey City, N.J.
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