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The NFL Doesn't Discriminate Against Money

Stocks in this article: DIS CMCSA DTV FOXA CBS

PORTLAND, Ore. (TheStreet) -- Go ahead and sue the National Football League if you'd like: It'll just remind you that it's a collection of team owners with a well-dressed puppet as its spokesman.

You can take up your grievances with your local field office.

This is what John E. Williams III, a self-proclaimed San Francisco 49ers fan from Las Vegas, fails to realize as he sues the NFL for $50 million. He claims he has been a fan since 1970 and that his inability to get a ticket to January's National Football Conference championship game between the 49ers and Seattle Seahawks in Seattle constitutes "economic discrimination" -- since the Seahawks limit ticket sales only to credit cards with addresses in the states of Washington, Oregon, Montana, Idaho, Alaska and Hawaii, as well as the Canadian provinces of British Columbia and Alberta.

He argues that because the NFL relies on public subsidies and money to build stadiums, it should not restrict ticket sales to exclude people "not from an area determined by the team -- or the NFL -- to be fan of that team." Sorry, Johnny, but that represents a fundamental misunderstanding of how the NFL works.

We dedicate a fair amount of text and real estate to the NFL, its federal protections, its use of public money and its television blackout policy. Along the way, we've learned just a few things about this league and how it's run.

First, it absolutely takes public money. Thirty of the league's 31 stadiums were built with it and new stadiums in Atlanta, Minneapolis and Santa Clara are getting a whole lot of it. However, that public money comes from local sources and goes to local owners. When the Buffalo Bills wanted more than $220 million for renovations to Ralph Wilson Stadium, for instance, Erie County and New York State coughed up the money to pay for it. The owners of the Cincinnati Bengals left their home county destitute to build Paul Brown Stadium and only want more money to renovate it. Seattle got Microsoft co-founder Paul Allen to pay for $130 million of CenturyLink Field's costs, but was left on the hook for another $300 million that won't be completely paid off until 2021.

When those stadiums don't fill, guess which markets can't watch the games on television despite the fact that the league gets roughly half of its $9.5 billion revenue from DirecTV, CBS, NBC, Fox, ABC and ESPN? That's right, the poor fans unlucky enough to tune in to stations that broadcast within a 75-mile radius of the home stadium. That's just a wee bit shorter than the more than 1,100 miles between Seattle and Las Vegas.

You can try to blame the NFL for that policy if you'd like, but it won't stick. A few years back, the league tweaked its blackout policy by allowing teams to declare a game "sold out" when ticket sales reached 85% capacity, rather than 100%. Proceeds for any tickets sold beyond that point would be divided throughout the league, but it let other NFL owners off the hook and put blame for television blackouts squarely on local owners. As a result, the number of NFL television blackouts dropped from 26 in 2010 to just two last season. The Glazer family of owners in Tampa bought up extra seats to keep all Buccaneers home games on the air for the first time in almost four years.

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