Under Penalty of Catapult

Some brief comments on reports that Roger Goodell’s recent contract extension will pay him upwards of $20 million annually:

1. This isn’t about Goodell’s subjective value as an executive. During the lockout, we learned Goodell’s value in that sense is $1. There’s no competition for Goodell’s services and he’s publicly maintained he’s never wanted to work anywhere but the NFL.

2. This contract is primarily about the owners’ validating their prior decision to elect Goodell commissioner.

3. This contract further proves my contention that the league isn’t about profitability, but maximizing consumption for its own sake. “Hey, we can spend $20 million on this guy who adds little to our product!” Think of Roger as a very tiny stadium.

4. Goodell does provide one valuable service to the league. He consistently sells fans on the idea that players aren’t valuable as individuals. He breeds resentment among the customers against the product, yet does so in a manner that (for now) hasn’t damaged demand for the product. He’s almost like a Super Skip Bayless—a troll that keeps you interested.

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.

Michael Silver of Yahoo Sports pens an open letter to NFL Commissioner Roger Goodell about his apparently inconsistent disciplinary decisions:

I believe you have a blind spot on the issue of punishing coaches whose behavior tarnishes “The Shield,” and it kind of makes you look like a hypocrite.

Personally, I’m not a big fan of fining players for things like improper shoe color or calling wifey on the phone (possibly in a loopy state) to say, “Honey, let’s have a candlelight dinner tonight … actually, make that dinner in a completely darkened room.” But I get it – you’re the Sheriff, and rules are rules.

That said, if you’re going to flex your power, it kind of helps your credibility when you at least go through the motions of doing so in an even-handed manner. Too often, your decisions seem arbitrary.

Actually, it’s not that Goodell’s decisions “seem” arbitrary. They are arbitrary, because the NFL’s rules grant Goodell virtually unlimited discretion not only to punish violators, but to determine ex post what constitutes a violation. By definition anything Goodell does will be arbitrary.

Now I’m no Goodell supporter. Like Silver, I’ve pointed out the glaring inconsistencies in Goodell’s makeshift jurisprudence. But even I’ll admit it’s silly for us to criticize Goodell for hypocrisy. He’s a regulator, not a businessman, and he’s only acting according to his nature.

Think about it. The title “commissioner” alone suggests Goodell’s office is more akin to a member of the Federal Trade Commission — whose members are also “commissioners” — than the CEO of a private trade association. Like an FTC member, he’s granted broad powers to identify and punish malfeasance. In Goodell’s case it’s “conduct detrimental” to the the league; in the FTC’s it’s “unfair” competition. Both mandates rely on the judgment of the individual regulator rather than a clear list of prohibited acts and accompanying penalties.

And like Goodell, the FTC is maddeningly inconsistent. I’ll give one recent example. This week the FTC hears arguments in a case it brought against the State of North Carolina. The FTC objects to a state regulator’s decision to treat teeth-whitening services as a form of “dentistry” subject to the same licensing requirements as dentists. The FTC claims the state’s actions discourage competition and unfairly bolster the licensing board’s monopoly. The FTC has a point.

Except that the FTC does the exact same sort of thing at the federal level. The FTC frequently drives firms out of the marketplace when they try to compete with the federal government’s drug monopoly, aka the Food and Drug Administration. In fact, the FTC uses the exact same legal arguments that North Carolina has in support of its teeth-whitening restrictions. Hypocrisy? Sure. But that’s irrelevant. As long as you accept the premise that the FTC should exercise a broad, discretionary mandate, you can’t then turn around and complain their using that discretion inconsistently. As a famous fictional bureaucrat, Colonel Jessup, put it in A Few Good Men, “I have neither the time nor the inclination to explain myself to a man who rises and sleeps under the blanket of the very freedom that I provide, and then questions the manner in which I provide it.”

Tennis officials fined Serena Williams $2,000 for lashing out (verbally) at a chair umpire during her loss in the US Open final to Samantha Stosur. I applaud the US Open officials for showing greater restraint than Williams. While I’m sure we’ll see the usual round of fabricated media outrage over the “low” fine, the truth is this was a minor incident (that was hardly unusual in the context of professional tennis) that didn’t warrant any great public show of retribution. Unfortunately, other sports leagues and governing bodies rarely exercise such discretion.

Indeed, on the same day the Williams fine came down, the NBA fined Charlotte Bobcats owner Michael Jordan $100,000 for talking about the ongoing NBA lockout without permission from Commissioner David Stern. Jordan’s comments were innocuous; he did little more than repeat the company line to an Australian newspaper. He also said some nice things about a player who wasn’t on his roster. It’s odd to think the NBA would punish Jordan for being complementary towards a player — something which Jordan isn’t exactly famous for. It’s even odder to wonder why the NBA turned on a non-story — most of us would never have seen Jordan’s comments had Stern not imposed a fine — into a story.

Punishment is often justified on deterrence grounds: By fining so-an-so today, it discourages him and others from committing a similar transgression in the future. This is generally bunk. Punishment is usually about the punisher, not the punishee. It’s an exercise in making the punisher feel important. This is why the level of fines and penalties tend to increase over time.

Years ago, I attended a panel discussion with the lawyer then running the Justice Department’s Antitrust Division. He was gushing that his office continued to collect record fines — at that time, about $500 million annually — from defendants in “price fixing” cases. Another lawyer in the room, an experienced antitrust practitioner himself, asked then how could the fines be deterring “price fixing” if the levels kept rising. The Division chief tried to cover his tracks and said that while the level of punishment kept rising, the amount of “undetected” antitrust violations were decreasing. In other words, he argued that his fines deterred conduct he couldn’t actually see. I don’t think anyone in the room bought this.

Government agencies usually fine as a backdoor method of taxation. I doubt the NBA or NFL fine people for the money. Sports commissioners are simply on personal power trips. They need to constantly reaffirm their own dubious value to the sports culture. I’ve long argued that commissioners, in all sports, are unnecessary at best and hindrances at worst. In no other industry can an employee punish his employers for speaking about the businesses they own. For that matter, few if any businesses allow CEOs to withhold part of their employees’ salaries on dubious grounds like “protecting the integrity of the league.”

As noted above, fines also take minor incidents and turn them into major ones. Most corporate executives strive to avoid this. You don’t publicly discipline employees (or shareholders) in an attempt to minimize bad public relations. This is why Roger Goodell’s behavior has always baffled me. He consistently lengthens the media cycle for scandals by imposing arbitrary and capricious fines and suspensions. Just look at the Terrelle Pryor and Jim Tressel punishments. Their presence in the league would have been a minor, sidebar story to the start of the NFL season — until Goodell made a public display of punishing both men, ensuring the story will last several weeks into the season. I’m sorry, this isn’t deterrence or discipline; it’s simply poor public relations management.

Whenever Roger Goodell issues one of his silly suspensions, some NFL defenders argue, “Players are employees, and employees have to follow their employer’s rules.” The two problems with this argument are (1) Goodell is not the employer, but the head of a trade association of employers and (2) the NFL Commissioner is given disciplinary authority over all persons within the NFL, including owners, and not just players.

Let’s examine that second point for a minute. As I noted in my Terrelle Pryor post, the NFL Constitution allows Goodell to suspend or fine any “owner, shareholder, partner or holder of an interest in a member club, or any player, coach, officer, director, or employee thereof” if he is “guilty of conduct detrimental to the welfare of the League or professional football.” It’s a broad power, yet it’s only used broadly against players, not coaches, and especially not against owners.

Which brings me to the case of Dan Snyder, owner of the Washington Redskins. Several months ago, Snyder sued the Washington City Paper. I dissected that lawsuit in a February article. The gist is that the City Paper ran a highly critical article about Snyder, and he filed a baseless defamation lawsuit in an effort to shutdown the paper. This was not simply a private matter unrelated to Snyder’s NFL operations: He actively relied on the advice of team employees in prosecuting the case and used them to promote the lawsuit to the press (including Snyder-owned media outlets).

In response, the City Paper moved to dismiss the case, citing among other reasons the District of Columbia’s anti-SLAPP law, which allows a court to quash a lawsuit that’s clearly designed to intimidate a person or company exercising First Amendment rights. There’s ample evidence in the public record — including a threatening letter to the City Paper’s ownership from the Redskins’ chief operating officer — than the anti-SLAPP law applies here, and that in any case, Snyder is simply using the court system as a weapon to silence his local critics.

So my question is, How are Snyder’s actions not “conduct detrimental to the welfare of the League”? He’s one of the highest profile owners in the NFL and he’s using team resources to pursue a censorship campaign against a small newspaper. If and when his lawsuit fails, he may also be liable for fees and costs to the City Paper; and he’s already generated a huge amount of negative press, culminating in an amicus brief filed by the ACLU and 14 media organizations in opposition to his lawsuit. I’d say that hurts the NFL’s image far more than Terrelle Pryor selling some of his college memorabilia.

I realize Goodell would never sanction or suspend Snyder. The other owners would almost certainly fire Goodell for such insolence. I only raise the Snyder issue here to point out that Goodell’s actions with regard to players like Pryor are not a product of his concern for the “welfare” of integrity of the NFL; if it was, then he’d be taking more aggressive action to prevent more prominent figures like Snyder from using “the Shield” to carry out a petty personal vendetta. Goodell’s tacit endorsement of Snyder’s behavior demonstrates that the commissioner, like his owners, only cares about himself and his own little kingdom. In reality, there is no such thing as the “welfare of the League,” and it would behoove media commentators to acknowledge as much.

The more I hear from Roger Goodell, the more he comes off like a government regulator. That makes sense given that he holds the title of “commissioner,” which doesn’t exist in any non-governmental industry except for professional sports. This morning’s decision regarding former Ohio State quarterback Terrelle Pryor only reinforces Goodell’s regulatory tendencies.

According to Goodell spokesman Greg Aiello, Pryor is eligible for the NFL’s supplemental draft, which will take place shortly, and he’ll be able to sign with any team that selects him and participate in preseason activities, but he won’t be eligible to play for the first five weeks of the regular season. Aiello said, “Pryor will be able to be at his team’s facility and attend meetings during his 5-week hiatus but not able to practice on the field.” So although Aiello never expressly uses the word, Pryor will be suspended for five weeks.

The five-week “hiatus” matches the five-game suspension Pryor would have served had he returned to Ohio State this fall. The NCAA issued that suspension last December after learning Pryor sold his personal property in violation of the organization’s “amateurism” rules. Pryor declined to enter the regular NFL Draft last April, but later decided to forego his remaining college eligibility and apply for entry into the supplemental draft.

The NFL Constitution says a supplemental draft is held whenever “a player or players become eligible for the League subsequent” to the regular draft. According to the Constitution, a player is draft-eligible if “all college football eligibility of such player has expired,” among other reasons. The NFL’s collective bargaining agreement with the NFL Players Association further provides, “No player may elect to bypass a [regular] Draft for which he is eligible to apply for a selection in a supplemental Draft.” In previous years, players who entered the supplemental draft lost their college eligibility after the deadline to enter the regular draft. In 2010, for example, Harvey Unga and Josh Brent entered the supplemental draft after Unga left Brigham Young for violating the school’s honor code and Brent failed to meet the NCAA’s minimum academic requirements.

Like those cases, Pryor lost his college eligibility after the regular draft. The issue for Goodell is that he believes Pryor “made decisions that undermine the integrity of the eligibility rules for the NFL draft,” including failure to cooperate with NCAA investigators and hiring an agent in violation of NCAA rules.

Pryor has not broken any NFL rules. His college actions fall entirely within NCAA jurisdiction. Goodell’s only authority to act as he did here is a vague provision in Article 8 of the NFL Constitution that allows the Commissioner to suspend any “owner, shareholder, partner or holder of an interest in a member club, or any player, coach, officer, director, or employee thereof” if he is “guilty of conduct detrimental to the welfare of the League or professional football.” Notice the rule says “professional” football, not college.

In effect, Goodell is requiring Pryor to serve the NCAA’s five-game suspension as a condition of allowing him into the NFL. I can find nothing in the league’s rules that permit such a condition. The Constitution describes draft eligibility as a binary state: Either you’re eligible or you’re not. There is no “eligible after the fifth week” status under league rules. Goodell is unilaterally creating a new employment classification that is not provided for in either the league’s governing documents or its federally protected labor agreement.

It also strains credibility to suggest Pryor’s actions in college are somehow “detrimental to the welfare” of the NFL. Hundreds of college players have lost their eligibility for violating school or NCAA rules and entered the NFL without incident. There’s nothing special about Pryor’s case except that it got a lot of media attention and forced the resignation of Ohio State coach Jim Tressel (who is apparently now consulting with the Cleveland Browns). And even if Pryor, as Goodell believes, manipulated his ineligibility just to get into this year’s supplemental draft, there was a simple option available to the commissioner under the existing rules — declare Pryor ineligible for the supplemental draft. Yet rather than follow the existing rules, Goodell decided to invent a new one that increased his personal authority.

This is a pattern. Goodell routinely extends the shelf life of scandals involving players by issuing vague, open-ended suspensions. He previously did so with Ben Roethlisberger and Mike Vick, among others. You would think a commissioner concerned with integrity and protecting public perception wouldn’t routinely go out of his way to issue suspensions that keep stories of player misconduct in the news cycle. Goodell could have quietly declared Pryor ineligible and been done with it. Instead he took an unprecedented action that only raises further criticism from many corners (including this one) about his fairness and impartiality. That is far more “detrimental” to the league than anything Pryor ever did.

Goodell may well have another agenda here — such as covering for the NCAA — or he may simply be an incompetent leader. But we shouldn’t justify Goodell’s actions as some sort of blow for integrity. He enforced a non-existent rule using a non-existent penalty. It’s not the worst abuse of power ever committed, even by Goodell, but it should lead the NFL’s customers to question whether the game they support is in the hands of the right individual.

Super Bowl Week 2011 will be less about the on-field contest between the Pittsburgh Steelers and Green Bay Packers and more about the off-field press conferences of NFL Commissioner Roger Goodell and NFLPA Executive Director DeMaurice Smith. With the NFL-NFLPA collective bargaining agreement set to expire not long after the Super Bowl, public attention will be at an all-time high for the ongoing war of words in the press between the representatives of ownership and labor.

In one sense, both men have already failed in their task simply by allowing things to reach this point. Although I’ve heard many commenters state there is an inevitability to all high-stakes negotiations — i.e., they always wait until the last minute — it’s ridiculous to passively accept that two well-compensated executives (in Goodell’s case, a reported salary of over $10 million) should spent months peacocking for the press before sitting down to serious negotiations. And if you are going to peacock, at least come to the show with a bird of sufficient plumage: Goodell in particular seems to be easily plucked.

The problem may come from Goodell’s background. He’s a career NFLer, working his way up from intern to chief operating officer under his predecessor, Paul Tagliabue. There’s nothing inherently suspect about working one’s way up the chain of command. But it is noteworthy that Goodell never really worked on the football side of the NFL. His expertise comes purely from the bureaucratic side — and that is inherently suspicious.

The first NFL officer to hold the title of commissioner was Elmer Layden, one of the famed “Four Horsemen” of Notre Dame who was serving as his alma mater’s athletic director and head coach before leaving to oversee the NFL. Layden’s successor, Bert Bell, was the owner-coach of two different NFL franchises. Pete Rozelle was an experienced marketing executive who turned around the Los Angeles Rams as its general manager.

When Rozelle retired, things started to change. The NFL owners bypassed Jim Finks, a longtime general manager who was the early favorite to succeed Rozelle, in favor of Paul Tagliabue, the league’s outside legal counsel, who had no hands-on football experience. Tagliabue certainly brought certain strengths to the job. His legal and negotiating expertise helped the league avoid the labor strikes and litigation unrest that clouded the last decade of Rozelle’s tenure. But the NFL “boom” of the 1990s and early 2000s was not, however, a result of any brilliant leadership by Tagliabue; rather it reflected the NFL’s strength as a multimedia product, a fete that was driven by the rise and growth of Fox and ESPN, not to mention a little thing called the Internet.

Growth often leads to complacency. When Tagliabue retired the NFL conducted a token search before promoting his longtime lieutenant, Goodell, to the top job. Goodell lacked either the direct football experience of the pre-Tagliabue commissioners or the substantial legal career of Tagliabue himself. He simply rose through the ranks, acquiring titles along the way. This is reflected in his management style, which resembles that of a Federal Trade Commission chairman more than a Fortune 500 CEO. As the Klingons would say, Goodell is “a swaggering, overbearing, tin-plated, dictator with delusions of godhood.” Perhaps more importantly, he has a tin ear towards public relations, which has played no small role in exacerbating the present labor situation.

The problem, however, is not Goodell so much as what he represents — the NFL’s mutation into a quasi-governmental bureaucracy. The job of the “commissioner” is inherently vague and subject to the whims of each occupant. He is charged with both mediating disputes within the league and imposing his own standards of what is in the “best” interests of the league. There’s an inherent conflict.

One way to relieve this tension would be to reorganize the commissioner’s office as a “head of state” position while assigning day-to-day managerial powers to a CEO or executive director. Like a British monarch — or perhaps the Governor General of Canada would be a better analogy — the commissioner’s role could be “to be consulted, encourage, and warn,” but not to take direct action. The commissioner would merely be a stopgap to help prevent intra-league or league-player disputes from reaching critical mass.

Ideally, such a commissioner would enjoy broad support from the entire football community (players, press, owners, and fans) and possess a strong football background — in other words, everything Roger Goodell is not. Nor should it be some out-of-work politician looking for easy money. The first name I thought of, simply because he’s in the news and out of work, is former Tennessee Titans coach Jeff Fisher. As a former player, assistant coach, head coach, and longtime co-chair of the NFL’s competition committee, he would command instant respect from all parts of the football world. But there are no doubt a dozen other people who could fill the role equally well.

Nobody expects the NFL owners to make such a radical change to their internal operations. Yet it’s just as much in their interest as anyone’s to dump Goodell and rethink the entire concept of what the “commissioner” should be. Ultimately Goodell is torn between protecting the owners, his employers, and craving public and press approval. The owners surely don’t need a showboating bureaucrat at a salary of over $10 million annually. I can’t imagine any owner credits Goodell with the league’s enormous fortunes. At best he’s an expensive ornament.