Goodell, 10 Years Later
Tuesday’s news of Roger Goodell’s bloated compensation, $34.1 million in 2014, was met with the usual contempt and criticism that normally accompany the annual disclosure of the commissioner’s compensation. While many leaders of companies with revenues in the $10-12 billion range make far less, many make far more. For the NFL owners and Goodell, we have now reached the end of this annual opportunity for derision. The NFL switched to a for-profit status this past April, as the prior status only served as more fodder for derision (it was never fully understood by the public, as it only affected league office financial statements, not billions of revenue flowing to the teams). Thus, there will no longer be a requirement of filing compensation for top leaders in public documents. But here’s a tip: Goodell’s number is only going north. With business booming and revenues soaring, Goodell—six months away from the 10th anniversary of his ascension to the league office’s top position—is pleasing the people who matter in his world.
Goodell’s actions draw more of the spotlight than perhaps any other previous or current commissioner—in any sport—largely due to him being the most identified person, for better or worse, of the most-analyzed sports entity in the country. Owners are too aligned with their individual markets; Goodell, with his corporate and unrevealing manner, is clearly the face of the league. In some ways he is like a highly recognizable athlete or entertainer in the nonstop news cycle in which we live: Most of his actions draw loud (often negative) reactions that resonate through the social media echo chamber.
Goodell has morphed from a player conduct commissioner to an owners’ interests commissioner, although he has never lost sight of either priority. Let’s examine.
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I have often said that when we look back on the tenure of Goodell in 50 years, he will be seen as the Conduct Commissioner, legislating player behavior (misbehavior) in ways not seen from previous commissioners. From the moment he took office, he tried to implement his personal beliefs about role modeling and players holding themselves to a higher standard. And while predecessor Paul Tagliabue, a lawyer, would wait for the legal process to play out before levying discipline, Goodell has had no qualms about imposing discipline before legal resolution, or without any criminal charges filed.
For this, among other reasons, Goodell has earned the wrath of the NFL Players Association. Even before the 2011 CBA negotiations, the union thought that Goodell had “jumped the shark” in player conduct and were looking to rein him in with independent arbitration. Of course, the union’s priorities changed in the horse-trading to make a deal and Goodell’s “judge, jury and executioner” powers continued. Even armed with victories in legal proceedings involving Ray Rice, Adrian Peterson, Greg Hardy and Tom Brady—with yet another Brady appeal next month—Goodell ignored the union in fashioning the league’s new Personal Conduct Policy and still clings closely to his CBA power.
Serving ‘The Membership’
Beyond player conduct, recent issues have crystallized the reality of Goodell’s constituency. Although we have a utopian vision of sports commissioners serving all parties—owners, players, fans, etc.—it is becoming increasingly clear in the growing business of sports that commissioners today primarily serve one constituency: the owners. While Goodell (as all commissioners do) talks of the fans, the players and other constituencies, the reality is that he serves “the membership”: the owners of the 32 clubs in the NFL. This is not a revelation to those like myself who have seen league/owner interactions for years, but perhaps a disappointment to those who hold dear to the notion of a commissioner truly serving the best interests of all parties.
Goodell’s actions and interactions in this, his 10th year on the job, clearly illustrate the priorities that he serves:
Race to L.A.: The clear winner in the three-team race to heed the siren song of Los Angeles was Rams owner Stan Kroenke, with the clear losers being the citizens and city leaders of St. Louis, followed by the erstwhile favorite to move, Chargers owner Dean Spanos. That outcome was the result of a couple of harsh decisions by Goodell to allow: (1) league point man (henchman?) Eric Grubman to do the dirty work for Kroenke in St. Louis, a former role of Goodell’s in NFL hierarchy, and (2) multiple owners to betray loyal partner Spanos through a secret ballot vote usually reserved only for Super Bowl site voting. A faction of the membership, led by Jerry Jones, turned the room away from sentimentality for Spanos to Kroenke’s revenue-bursting Shangri La in Inglewood. Although Spanos and Mark Davis walked away with $100 million parting gifts to seek local stadium plans, the process resonated as a mutiny on Spanos, with Goodell the steward for a membership with a relentless goal of increasing revenues in every imaginable way.
DFS: Goodell continues walk a tightrope with Daily Fantasy, softly embracing it even as legislators brand it with the G-word that flies in the face of the league’s integrity: gambling. Goodell claims his moral ground in distinguishing the NFL from other leagues that invested in FanDuel (NBA) and DraftKings (Major League Baseball). Despite the lack of league investment, of course, 28 teams have sponsorship deals, and Jones and Robert Kraft have equity stakes in DraftKings. Goodell knows the membership values DFS as a powerful fan engagement tool and obvious revenue source, so he continues to do a delicate dance straddling the line between DFS and gambling as long as he reasonably can.
• THE NFL HAS A GAMBLING PROBLEM: With Daily Fantasy Sports industry—tied closely to the NFL—coming under heavy scrutiny from the government, it might be time for the NFL to rethink its conflicting stance on gambling.
Concussions/Health and Safety: Goodell has wisely made this issue a priority since being chastised—even compared to the tobacco industry—during 2009 congressional hearings. Although even Goodell’s staunchest critics admit improved protocols and treatment for head trauma, the scrutiny will not cease, which is a good thing. Behind the optics, however, there is the cold reality: The NFL is in the final stages of settling a massive concussion litigation that will (1) cost each owner roughly $25-30 million, much of it covered by insurance, (2) contain no NFL admission of liability, and (3) not provide any benefit to those dying from CTE. Owners know that, under Goodell’s watch, they have weathered the threat of billions of dollars of exposure and potentially damaging discovery documents. While documentaries and movies such as League of Denial and Concussion will continue to shine a spotlight on the league’s past, it appears to have had no measurable impact on the NFL’s unrivaled prosperity. The membership knows that the concussion issue will continue to be front and center—which it should be—but now without the threat of future litigation.
Television: Despite grave warnings of the fractionalized audience for television programming, NFL ratings seem to break new records every week. In the most recent television negotiations, the NFL added NBC to the existing CBS relationship for Thursday Night Football. At a reported $450 million rights fee from the networks combined, the NFL (1) negotiated a dramatic 50% increase from the $300 million paid this year while (2) replacing highly-rated entertainment programming on two networks with NFL football. And they are not done: there will be OTT (Over The Top) streaming rights sold—think Google, Apple, Netflix, etc.—to add to the TNF haul, a sign of the future as different content delivery methods are added to the traditional network viewing experience. The NFL’s largest revenue source, broadcast rights, is only getting larger.
Labor: Goodell’s relationship with DeMaurice Smith and the NFLPA continues to be characterized by a lack of trust, with obstacles in reaching agreement on virtually anything, save a revised drug policy including HGH testing. Much of that inertia, however, is at the direction of ownership. With a team-friendly CBA lasting for the extraordinary length of 10 years with no opt-outs, there is no incentive for the membership to further negotiate anything until much closer to the next negotiation in 2020. Thus, while Goodell will occasionally sound amenable to including Smith and the union—and even appear open to changes in the player conduct policy—that has largely been a mirage. The membership knows things are fine just the way they are.
Valuations: The most recent franchise sale—the Buffalo Bills for $1.4 billion—has set a floor. Several teams have valuations over $2 billion; the Rams’ move to Los Angeles will eventually double their valuation to over $3 billion while raising valuations throughout the league. NFL owners, many of whom got in for a fraction of their present valuations, are quite satisfied right now.
Roger Goodell is the modern commissioner in the truest sense: representing the best interests of his owners and taking the bullets so they don’t have to. He has been scorned and ridiculed by players, fans, media and even still-close friend Robert Kraft (they compartmentalize well), yet carries on with full support from the membership.
Granted, Goodell does not help himself with his sometimes-robotic appearance and bland, unrevealing comments (while with the Packers I did witness a more personal, vulnerable and human side to him; it is there). However, he is who he is in large part because that is who his bosses want him to be.