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“…The success of the NFL syndicate stands in stark contrast to the troubles of America’s three other main sports leagues: baseball, basketball and ice hockey. Whereas the NFL’s players have not walked out since 1987 – before Mr. Tagliabue took over – the other three leagues have all faced crippling labour strikes since the mid-1990s, the most recent of which cost the ice-hockey league an entire season last year. As a business, American football has been beating its rivals handily for years. It has the highest total revenues of the four, at nearly $6 billion a year. It has the firmest grip on its labour costs, which have grown only 9% a year since 1990, compared with 12-16% growth in the other three leagues. It remains the most popular of the four big America sports on almost every measure, from opinion polls to television ratings. And it has translated all of this into rising profits. The average football team has a market value of around 3.9 to 4.4 times revenue, compared with ratios of 2.2 to 3.0 for the other leagues.

“What is the NFL’s secret?…Two sets of incentives have been especially important: the teams’ owners share roughly 70% of their revenues with each other; and they stick to a strict salary cap that limits the amount each team can spend on players’ salaries. It is little wonder, then, that Art Modell, the former owner of a franchise that moved from Cleveland to Baltimore, once referred to NFL team owners as ‘32 fat-cat Republicans who vote socialist’ on football. But these two policies, taken together, have done wonders for profits, by giving all 32 owners a chance to field teams that are both financially viable and athletically competitive, even though some are in much richer local markets than others…

Second, the system lowers risk. ‘The NFL is a perfect portfolio,’ says John Vrooman, a sports economist at Vanderbilt University, because one team’s losing season and sagging revenues are offset by another’s team’s banner year. The co-operative arrangements also make costs stable and predictable. Mr. Vrooman reckons that even if another American sports league, or a big European football league, were to have similar cash flows to the NFL, the American league’s teams would still be 50-60% more valuable because their business is so much less risky…

“The trouble with revenue sharing, however, is that it can encourage free-riders. Daniel Rascher, the president of Sports Economics in Berkeley, California, points out that the Cincinnati franchise was the NFL’s fifth-most-proftable during the 1990s, despite winning the fewest games during the decade. The team simply skimped on avoidable costs, such as talent scouts, and raked in revenue from the rest of the league.

“Although there will always be a couple of Cincinnatis, however, the NFL has managed to limit this problem by letting each team keep all of the revenue streams from a couple of high-growth segments, such as luxury boxes. That gives each owner an incentive to invest in a new stadium – 17 have been erected or overhauled on Mr Tagliabue’s watch – that is designed with profit margins in mind.

“Like any good syndicate, the NFL under Mr Tagliabue has also mastered politics. Mr Vrooman points out that the league likes to leave one prominent city without a football franchise, ‘like an empty seat in musical chairs’, so that teams in other cities can threaten to move if they do not get their way. This invariably prompts state and local governments to contribute public money to help teams replace old stadiums with new ones. Los Angeles residents have been scratching their heads about why the country’s second-largest city has had no football team since 1994. But the NFL has made far more money from new stadiums that have been built using Los Angeles as a threat, says Mr Vrooman, than it could have made by actually putting a team there. There is a lesson in all this for Mr Tagliabue’s successor: competition is nice, but if you want it to be profitable, it helps to write your own rules.”

To read the complete article, click on http://www.economist.com/business/displaystory.cfm?story_id=6859210

THROUGH THE ROOF
by James Surowiecki

Our title and quotes are from an article posted on THE NEW YORKER site.

“On September 2, 1666, fire erupted in a bakery on Pudding Lane in London. The fire quickly spread and raged for four days, ultimately destroying four-fifths of the city. To make matters worse, Londoners had been living without a simple but invaluable financial tool: fire insurance. Although the idea of fire insurance had been around since the early sixteen-hundreds, most people though of fire as an act of God, and therefore not something that could be reasonably insured against. The Great Fire changed that. Soon after the city was rebuilt, a man named Nicholas Barbon opened up the Fire Office insurance company, and by the end of the century fire insurance was a thriving business.

“…There is one much feared cataclysm, though, against which everyone has so far been defenseless – a housing-price slump. Seemingly every magazine and newspaper in America has now prophesied the imminent bursting of the housing bubble. But even though many Americans have invested all, or almost all, their net worth in their homes, they’ve had no way of insuring against that asset’s value taking a severe tumble.

“That’s all changing…Later this month the Chicago Mercatile Exchange is going to start trading futures contracts pegged to housing-price indexes in ten major metropolitan areas. The Chicago plan, which is the brainchild of two economists, Karl Case, of Wellesley, and Robert Shiller, of Yale, is straightforward: if you just spent, say, $1.5 million on a two-bedroom apartment in Manhattan, and you want to hedge against the risk that it might be worth $1.2 million three years from now, you can sell contracts that will reap you a profit if local prices fall, allowing you to lock in the current value of your home…

“If housing futures work the way they’re supposed to, they will shift risk from those who are less able to bear it (individual homeowners with hefty mortgages) to those who are more willing to (speculators looking for a big upside on their investments). In the process, they will effectively provide a form of house-price insurance. They could have wider benefits too. If there is a housing bubble, and it does burst, housing futures would soften the blow to the national economy. If enough traders participated in the market, it would become, in the long run, a valuable predictor of housing prices in different cities. That would allow buyers to make more rational decisions about how much they were willing to pay for homes, which would make house prices swing prices swing less widely than they currently do..”

To read the complete article, click on http://www.newyorker.com/talk/content/articles/060508ta_talk_surowiecki

REEFER MADNESS

Our title and quotes are from the 04/27/06 edition of THE ECONOMIST:

“If cannabis were unknown, and bioprospectors were suddenly to find it in some remote mountain crevice, its discovery would no doubt be hailed as a medical breakthrough. Scientists would praise its potential for treating everything from pain to cancer, and marvel at its rich pharmacopoeia – many of whose chemicals mimic vital molecules in the human body…

“Cannabis has been used as a medicinal plant for millennia. In fact, the American government actually supplied cannabis as a medicine for some time, before the scheme was shut down in the early 1990s. Today, cannabis is used all over the world, despite its illegality, to relieve pain and anxiety, and to prevent seizures and muscle spasms. For example, two of its long-advocated benefits are that it suppresses vomiting and enhances appetite – qualities that AIDS patients and those on anti-cancer chemotherapy find useful. So useful, in fact, that the FDA has licensed a drug called Marinol, a synthetic version of one of the active ingredients of marijuana – delta-9-tetrahydrocannabinol (THC)…

“THC is the best known active ingredient of cannabis, but by no means the only one. At the last count, marijuana was known to contain nearly 70 different cannabinoids, as THC and its cousins are collectively known. These chemicals activate receptor molecules in the human body, particularly the cannabinoid receptors on the surfaces of some nerve cells in the brain, and stimulate changes in biochemical activity…”

To read the complete article, click on http://www.economist.com/displaystory.cfm?story_id=6849915

“WHY IS MOST GROUND BROWN?”

Our title and quotes are from a posting on SCIENTIFIC AMERICAN.COM

“Many soils are brown in color because they contain large amounts of carbon. In particular, carbon-containing polymers called humic compounds absorb most visible wavelengths of light and give soils a dark brown appearance. Often the majority of soil carbon is present as humic compounds, which means they have a large impact on soil chemistry and fertility.

“What is most surprising about humic compounds, and indeed all soil carbon, is that there is so much of it. Many species of bacteria, fungi and other invertebrates decompose and consume soil carbon as a food source, yet soils hold somewhere between 1,500 and 2,300 petagrams – or as much as two quintillion grams – of carbon globally; this is two to three times the amount of carbon present in all the plants in the world. A large fraction of this soil carbon is ancient - hundreds to thousands of years old – meaning that it has escaped conversion into carbon dioxide by soil decomposers. These escape mechanisms are ultimately what cause the ground to be brown…

“Not all ground is brown, of course: soil minerals, when not covered in carbon compounds, often give soils a red, yellow or gray hue. In some ecosystems, we see the colors of the underlying minerals instead of brown ground, because carbon inputs to the soil are low due to erosion or a lack of plant growth, as in the iron-rich red soils of certain deserts. Yet, ultimately, the majority of ground is brown because the majority of soils remain carbon-rich.”

To read the complete article, click on http://www.sciam.com/askexpert and then on our title.

USED BOOK SALES

We offer for sale all used books listed at http://www.vardaman.com/booksale.php.

OUR SYSTEM FOR BUYING OR SELLING LAND OR TIMBER

For details, click on http://www.vardaman.com and then on the red horizontal bar “Buy/Sell Land/Timber.” You can offer to buy or sell timber or land. You must post the general area of your interest; be sure to include the state. You must also post your E-MAIL ADDRESS and the URL of your Internet site. Our tracking report will not report the number of visitors UNLESS you enter your URL. If you are selling, you should post the name of the tract. When you have entered all details, click on “Submit,” and what you just entered will appear on our Internet site at the bottom of the page under the red horizontal bar “Buy/Sell Land/Timber.” Be sure to check for and correct errors.

For each tract posted and whose owner posted his URL, we charge $0.50 for each visit his ad receives. On each Friday at 0900 Central Time, we will e-mail him a bill for $0.50 for each visit his ad received during the week just ended. You can pay us by e-mailing the money to “Vardaman Virtual Forestry Company” at PayPal or mailing it to P.O. Box 12293, Jackson, MS 39236. We will delete your ad when your payments cease.

SELL LAND

For tract in AL, send e-mail to landsale@larsonmcgowin.com
For tract in AR, send e-mail to scantland@n2net.net

BUY LAND

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BUY TIMBER

For tracts in AR, send e-mail to dyork@digitalpassage.com
For tracts in IL, send e-mail to psftimber@hotmail.com
For tracts in MT, send e-mail to crawlings@mtcdc.org

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