Bread and Circuses

 Bread and Circuses

Few organizations have a license to print money, the NFL is one of those organizations. It also owns at least one day of the week for ~6 months (September-February), and increasingly some Mondays and Thursdays as well. The 32 teams that collectively make up the "trade association," yes they were actually considered a "non-profit" up until 2015. This former non-profit will generated some $9.8 Billion in revenue, coming to about $309 million per team. The growth over the past 10 years has been impressive.

Those are at least the numbers we can gleam from working backwards on data provided by the league's only publicly traded team, the Green Bay Packers. This wellspring of cash is undoubtedly much, much higher as "off-balance sheet" revenue from marketing deals is most likely a multiple of the actual reported TV revenue numbers. The bottom line is that there are probably only 3 people in the country who know exactly how much the NFL is really generating.  And amongst the treasurer, secretary, and commissioner of the NFL, the Commissioner reigns supreme.

Using a typical software multiple of 35, and assuming the true revenue is probably on the order of $50 to $100 billion, the NFL would rank as one of the most valuable companies in the world, on par with Apple or Microsoft or Google or Facebook or Tesla. It definitely has that level of sway in the corporate world as sponsors fight over placement in the never-ending cavalcade of commercial during a typical game.

Where do Americans learn about new cars? Football games. Where do Americans learn who has the best 5G coverage? Football games. Where do Americans learn how to gamble? Football games. This list is long and the influence is strong; if it is advertised during an NFL game there WILL be an ROI on the product or service. Indeed, some of the most iconic ads of all time have been placed during the Super Bowl.

Last year's Super Bowl average ad cost $6,000,000 for 30 seconds, generating nearly HALF A BILLION in single game ad sales alone. But really, what price is too much for marketing immortality? Consider arguably the BEST Super Bowl ad of all time, which is a bold statement, but this ad appeared only once. And it changed the world: 

So maybe changing the world is a good thing, but the flip side of the coin is that the NFL in many ways HAS become 1984 dictating societal norms without ever defining why, pandering to powerful unelected mobs with nefarious goals, and oligarchs siphoning away dollar after dollar of income off the masses. This makes the NFL in many ways the "Circus" of the proverbial "Bread & Circuses" popularized in ancient Rome for keeping the populace in line. Are we much different today?

 

Serfdom

By 2020 the United States population is estimated to reach 340 million, but of that total some 300 million people will effectively be serfs; low-income, low-wealth members of a caste with limited social mobility. It will be nearly impossible to escape serfdom as wealth permanently consolidates amongst the richest ~10% of the population.

How do you avoid becoming a serf? Landowners from medieval times to now have fared well; the "lord of the manor" typically doesn't wind up becoming a serf, although it can happen if land ownership rights are abolished (think Soviet Union or China during their respective communist purges of the 20th century.) Education is key. Owning assets (cashflow positive) is vital.

Recently hedge fund billionaire Ray Dalio has identified this disturbing trend as being the result of two distinct economies in the United States; he is 100% right, but miserably late to identifying something that this blog pinpointed years ago. Mr. Dalio, however, is the lone billionaire voice this author has read even remotely advocating for a wealth transfer to protect the social order. Don't bet on it though, as hearty readers of this blog know, the Forbes 400 control vast amounts of global wealth disproportionate to their net value to the world...and along with that they control the politicians and media outlets. Make no doubt, the game is stacked.

The simple solution is to retroactively establish equity accounts for USA citizens composed of common stock transferred from ultra high net-worth individuals (say net worths of $500M+ are getting a hair cut.) Think of this as TRUE Social Security: shares in Google, Microsoft, Apple, Amazon, Facebook, Berkshire Hathaway, etc. are transferred into a retirement savings account for every USA citizen. The very companies that have been allowed to establish monopolistic businesses in the United States (and often globally) help restore the Middle Class. I think voters would be a lot more excited about $100,000 appearing in a bona fide personal retirement account than a measly $1300 tax savings proposal.

Under the guise of philanthropy many billionaires are stashing their stock in non-profits, which allow them to maintain control (or their heirs) with beneficial tax treatment (read: no taxes). This does little to benefit the Middle Class from which these billions are siphoned. A strong Middle Class is good for everyone, even the ultra rich.

But real farmers don't complain, and that's not what this blog is all about...so discard the idea of wealth transfer and instead think about wealth creation and protection. Wealth creation is the product of owning assets that are cash flow positive, beneficial tax treatment, and protection of said ownership interests. The future isn't going to belong only to those who can code, but also those who can secure a solid asset base composed of real estate, equities, and education. Seek these out for yourself and the ones you love, because the monopolies grow stronger by the day.

Broke Billionaires

In regards to "The Coming Global Wealth Tax," the silence heard from the IMF's proposal was in actuality a collective gasp from billionaires worldwide. As even a cursory reader of "Rich Dad, Poor Dad" knows, the way to wealth is through ownership of corporations that use advantageous tax rates on capital versus income derived from labor. A certain oracle of Omaha is first in line to popularly endorse an eponymous rule championing higher incomes taxes, but it is truly the audacious billionaire indeed who would step forward to pay a wealth tax. Consider the consequences, nearly every "non-profit" would shutter, "giving pledges" would be upended, and generations of dynastic privilege would have to find meaningful employment. If anything ever so draconian as a wealth tax were to occur, just make sure to do it retroactively, otherwise the food banks will be filled with broke billionaires.