Roger Goodell is the Commissioner of the NFL, which means at the end of the day Roger Goodell represents the class of guys who run this league, and his interests are their interests. Don’t ever forget that.
The reason I say that is I’m listening to Colin Cowherd tell me yesterday on his radio show about a great guy Goodell is. As a “guy,” he very well may be; I’ve never met the man. He may very well be a fan who makes other fans comfortable in his presence. According to Cowherd, Goodell took 15 minutes out of his schedule to talk to some blogger who sent him an email outlining his frustrations over the impending lockout. According to Cowherd, Goodell says he will work for a dollar per year if there’s a lockout. Cowherd thinks Goodell is a guy who understand public relations. I think Goodell is a guy who knows he needs to do some good public relations.
In all honesty, Goodell has two problems. His autocratic, quasi-Stalinist handling of the ” we have to reduce the violence in football” issue has given him the appearance of being a closest fascist hiding under “the moral high road.” Like it or not, this approach has strained relations with the players at a time when those relations matter the most. It has also illustrated the hypocrisy of the league when it says it puts the safety of the players first and foremost. But those are issues with the players; the fans have a different view of the upcoming labor issues.
Much of this goes quietly under the bridge because most fans don’t worry about the possibility that there won’t be a 2011 NFL season. Most fans don’t want to get into the complexities of a collective bargaining agreement; they just want to watch, and talk about football. Most fans assume the players and owners will eventually make a deal, and they assume the players will just take less money. In effect, most fans will side with the owners largely because they only see the financial side for the players; NFL fans scrutinize players on a daily basis. Being a fan means knowing all the foibles of players, and that includes how much money they make.
However, no one really pays attention to the finances of the owners, because they aren’t in your daily sports section. This is why the fans’ tendency is to blame the players. They think the players should just take less money; which is understandable because it’s easy to imagine becoming a millionaire. Nobody bothers imagining life as a billionaire. Even if fans are familiar with owners, they might know their own teams’ but not the others. Most assuredly, they know more about players’ salaries than owners’ profits.
So let me ask a “million dollar” question: If the fans tendency is to see the owner’s perspective, then why does Goodell even need to bother with public relations?
The answer: Because this is a media campaign designed to be able to place blame on the other side when this thing explodes.
Goodell is smart enough to know which side his bread is buttered on, but he’s also smart enough to know there is a time to look like the guy willing to come to the middle to unite both sides. He knows that if we end up with a lockout, there is going to be a lot of mud-slinging coming from both sides. The players are going to expose Goodell’s hypocrisy on behalf of the owners with his claims of being interested in player health and safety while threatening to yank health coverage for players as part of the new collective bargaining agreement. The players are going to play on the impressions that Goodell is an autocratic tyrant based on his seemingly arbitrary nature in imposing fines. The players are going to remind fans that it is the owners who make fans pay exorbitant fees for personal seat licenses, charge them $10 for a beer, threaten to move the team to get them to pay for a new stadium, and black out their games when the tickets don’t sell.
In other words, Goodell knows winning in the court of public opinion means winning over the public. Make no mistake, there is going to be a lockout; unless there is a tectonic shift is the current positions. But at the same time, he is also paid to represent the NFL, which is composed of the owners. Goodell also knows it is the owners who are choosing to end the agreement they previously had with players and jeopardizing the next season, and he knows that will subject them to all sorts of public scrutiny.
What does this have to do with Goodell’s killing this league? Because while he is looking out for what is good for Roger Goodell, he isn’t paying attention to the major issues that are factionalizing the owners; issues which will hurt this league and the people who depend on it is keeping unity amongst the owners. The dirty little secret is the leagues owners’ are really split into the Haves and the Have-Nots. There are a ton of ways to determine which team is which camp, but it is safe to say they all revolve around money. It is that division that causes a schism on the view of the major issues. By all accounts, here are the three issues commonly believed to be the major points in the negotiations.
- Rookie Salary Cap/Structure
- 18 Game Schedule
- 18 Percent Roll Back on Revenue Dedicated to Player Salaries
Notice two of those items are about paying players less, and the third is about making more money for the league. That means there is a fundamental imbalance in the compromise game; this situation as it exists now is a lose/lose for the players as it stands now. Handling that imbalance is the key to understanding why there is such a divide among owners, and why Goodell’s efforts are doing more harm than good.
The heart of the players’ position is that team owners should open up their financial books and show how much money they’re really making. The NFL is a $9 billion/year business and owners are crying poverty, while values of franchises are allegedly rising, more advertisements and tickets are being sold, no team is supposedly losing money, while the salary cap has largely stagnated. The problem is compounded in the fact it is another issues which the players and fans should share. Fans and taxpayers should be saying to owners, “If you want to build a new stadium using public money, open up your books and show the need for public financing.”
Throwing the books open causes a major “turd in the punchbowl” situation. One of the owners’ primary claims for why they need the 18% roll back on revenue dedicated to player salaries is because the cost of running stadiums has become more expensive. This is really like the kid who kills his parents, then pleas for mercy because he’s an orphan. The owners were the ones who pushed for these lavish new stadiums in the first place, using the threat of relocation to garner large amounts of municipal funding. 28 out of 32 NFL stadiums received some sort of public financing.
If a new collective bargaining agreement is not reached between NFL owners and players by March 3rd, there will be a lockout. The problem is nobody is talking about why so many owners are opposed to such public disclosure; worse yet, nobody is talking about how this issue is causing the split in the owners’ ranks. The NFL Players Association and the richest top third of the teams in the league do not have such an opposition to such disclosure; only the owners who are looking to hide their false claims of poverty have such an opposition.
The bottom third of league owners want more money in terms of revenue sharing. They’ve extorted what they can from municipal governments, and now they are turning their upward-turned palm to their richer brethren. Sadly, the NFL model has become an example of socialist thinking, where somehow we have decided that equal access to revenues and propping up the weakest owners at the expense of the strong ones somehow doesn’t become a cancer on the league. At present, the successful owners in the league are forced to prop up the failures, in order to give them the illusion of success. This means many NFL teams are not successful financially without revenue sharing.
This is exactly why the aforementioned three bullet points can’t really be solved without addressing the issue of revenue sharing. They are inextricably linked to money, and the root challenge of money issues is who gets it. Revenue sharing must be addressed otherwise all these issues will never be solved as revenue growth limits the growth of the league; such limited growth means there will be eternal quibbling over an artificially small revenue pie. Everything we are discussing now in terms of bullet points in a collective bargaining agreement all revolve around generating revenue and/or keeping revenue in the owners’ pockets.
The proponents of revenue sharing believe that the forced parity it introduced into the league is positive. Rather, it has created a sub-league of financial parasites who can contribute nothing to the league yet be financially viable. This means since there is no true ownership “failure” in the NFL; there is instead a world of artificial profits and rising team valuations no matter the ineptitude of each individual lucky enough to own a team. In other words such public financial disclosure that the players want would show that the owners who are claiming poverty are doing so falsely. Once the illusion of success is gone, then the NFL will find itself in the middle of a cash grab the likes of which have yet to be seen in pro sports. The players will stand firm against any salary rollbacks, owners will be out to protect their individual investments, and the league will ultimately suffer.
Consider that this dynamic is already in place among the “have-not” owners in this league. They are already out to protect the cash cows they have, and they are in such a number to wield a great deal of influence. Right now, the bottom third of the owners want a lot more money from the top third or they will not sign on to any collective bargaining agreement. This means the fate of the 2011 NFL season hinges on a handful of owners in the middle who must decide if they are going to vote with high-revenue teams like the Dallas Cowboys, Washington Redskins and New England Patriots, or side with low-revenue teams such as the Jacksonville Jaguars, Minnesota Vikings, and Oakland Raiders. Since a new collective bargaining agreement would need the approval of 24 of the 32 owners, this means the fate of the league could come down to a few votes of some mid-level franchises like the Pittsburgh Steelers, Cleveland Browns, Seattle Seahawks, Baltimore Ravens, and Indianapolis Colts.
Given that, my bet is on a lockout.
Given all that, if Roger Goodell really wants to pull of a public relations move, then there is one thing he must do; end revenue sharing. Conventional wisdom may say not to mess with success, but that fails to view the NFL’s amazing success against what it would be without the false prosperity of propping up the weak at the expense of the successful. As I’ve said, the belief is that revenue sharing has made the league what it is today thanks to revenue equality driving team parity. The problem is its true, but in a negative sense. According to Forbes Magazine, the fact is that of the 32 NFL franchises, 20 decreased in net value over the past year, and 7 showed no growth. That means only 5 franchises appreciated in value. To a guy that has been in business and has been a management consultant for over fifteen years, that’s not a sign of overwhelming success; rather its a dire warning.
If Goodell wants to save this league from a future cataclysm, he must act soon. If the league were to abolish revenue sharing, the NFL would at once rid itself of its financial parasites and attract a new class of wealthier, ambitious owners. Team valuations would appreciate in an environment where success is no longer “taxed.” Think how many bad owners you would lose overnight. Mismanaged money pits like the Lions, Cardinals, Rams, Bengals, and Vikings would be up for sale in short order, because most of those owner couldn’t survive if the financial success of their teams becomes a function of their individual abilities? If revenues earned by the league were instead apportioned based on individual team success on the field, television ratings, and apparel sales, it’s not a reach to suggest that the economics of owning a team would suddenly become more of a challenge. If so, failed owners would be forced to sell to entrepreneurs actually interested in achieving success with regularity. These new entrepreneurs would drive more out of existing streams, and new blood usually finds new revenue streams. This would allow for real growth in the NFL, and real growth is the one thing that would solve all the aforementioned bullet points.
So, don’t give me any more public relations moves, Commissioner Goodell. Show me some real leadership and do what is good for the future of the league.