Welcome Back, Roger
The National Football League’s owner-operators extended Commissioner Roger Goodell’s contract through 2018, it was announced yesterday. That seems fair. Back during the lockout, I opined that if things went South — that is, if some or all of the regular season was cancelled — the media and public backlash would put Goodell in jeopardy. The owners would need a scapegoat. But since things worked out, Goodell is now rewarded for sitting there and looking pretty the entire time.
In looking back at Goodell’s nearly six years as commissioner, it’s hard to find a signature accomplishment. His media enablers will cite the ten-year agreement that ended the lockout. But the owners did that, not Goodell. If anything, the commissioner put labor peace at risk with his comical and reckless disciplinary policies that needless antagonized the players.
There have been a number of questionable initiatives spearheaded by Goodell: Expanding the draft to three days, lobbying for an 18-game regular season, exporting one regular season game per year to London. There also hasn’t been any real growth in the quality of the NFL product. The NFL Network remains largely an afterthought. There’s still no team in Los Angeles and one in Jacksonville. The Vikings remain frustrated in their efforts to steal hundreds of millions of dollars from Minnesota taxpayers to build a new stadium. Al Davis is dead, so I guess that’s something.
The most positive thing I can say about the NFL during Goodell’s tenure is that the political climate surrounding the league remains stable. I’m not talking about stadiums here. I’m talking about gambling. The fact that the federal government remains committed to persecuting non-state-sanctioned gambling must be a major relief to Goodell and the owners. Legalized gambling might cripple the league. Not because legal wagering on football would corrupt the sports, but because if people could legally gamble on other stuff — be it non-football sports or just plain old blackjack — it would reduce the incentive to gamble on the NFL through quasi-legal means like fantasy football.
I don’t think you can understate the importance of gambling to customer demand for the NFL. A large portion, if not a majority, of NFL customers consume the product via fantasy. It gives them a reason to follow the league on television and the Internet during the weekend. But if all of a sudden, the feds and every state legalized other forms of gambling, suddenly there’d be competition. And the NFL doesn’t fare all that well when there’s competition. That’s why the owners tend to demand subsidies for their less popular stadiums.
Gambling, of course, is not the biggest threat to the league. The biggest threat is the c-word: concussions. It’s been a buzzword for the last couple of seasons, prompting Goodell to adopt his selective punishment strategy to make it appear like he’s concerned with player safety. Only a league apologist — and there are many — know Goodell isn’t serious. American football can not be played “safely.” Eventually, support for the sport at the high school and college level will degrade to the point where the NFL won’t be able to field its product anymore. That won’t happen overnight. But 50 years from now, there probably won’t be a Super Bowl as we know it now.
But what about the RATINGS?! NFL writers are like the NASA executives in that Simpsons episode who obsess over television ratings. The ratings have never been better, so what’s the problem? Well, as I just discussed above, the league has all sorts of unresolved issues. High TV ratings don’t build new stadiums. Ratings are not a measure of profitability.
Furthermore, high ratings expose one of the league’s key fault lines. The NFL’s popularity is due to the fact it’s largely free to consume via television. The league spent like drunken sailors on new stadiums and a host of other luxuries based on the ratings. Now with the stadium model in decline, Goodell and his friends are looking to recoup their losses by slowly eroding the free-television model. That was the whole reason for building the NFL Network in the first place, to siphon games off of free television. That’s why the league maintains its idiotic blackout rule.
The television money won’t last forever either. ESPN is overpaying for NFL rights in an effort to justify its high subscriber fees to cable operators. The cable operators are getting tired of subsidizing ESPN on basic cable. That gravy train will be dead within five years. If “a la carte” cable — long a dream of consumer advocates — comes to pass, ESPN will be dead in the water, taking with it a significant chunk of the NFL’s revenue.
Still, doesn’t the league have lucrative deals with NBC, CBS and Fox? Sure. But what happens if one of those networks goes under? The market for network television hasn’t improved. As television distribution via the Internet continues to grow, it’s likely one of the networks will go down before the decade is out. Take CBS out of the NFL equation and there’s another billion or so down the tubes.
Remember, player compensation in the NFL is tied to a percentage of revenues. If and when those revenues decline, so will player salaries. Add to that the increasing awareness of the adverse long-term health consequences, and ten years from now, the NFL may well be facing a sudden drop in the quantity and quality of college students willing to risk their lives for dwindling paychecks. The NFL has no developmental system. It remains entirely dependent on a monopoly supplier, the NCAA, for its talent. The NCAA is on even shakier ground than the NFL. Half the Division I colleges now fielding football teams could easily be broke and out of business within 20 years.
While the NFL appears invincible to the naked eyes of today, it’s no different than any other large bureaucratic entity dependent on its own legacy. Goodell is a symbol of complacency. He’s a man without aspiration or ambition. He has the job he’s always wanted, and as long as the owners don’t need a scapegoat, he’ll remain secure in that job until he chooses to retire. The next guy will be stuck with presiding over the league’s decline and likely fall.