National Football League

NFL Business: This Week in the Business of Football

Published Jun. 30, 2017 6:28 p.m. ET

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This Week in the NFL Business of Football: ‘Deflategate’ Ends, NFL Viewership Plummets, and Remembering When Donald Trump Went to War With the Miami Dolphins.

Football is not just a game or a business but an industry.

The NFL’s offices, located on Park Avenue in New York City, are a cross between a shrine to the game of football and the headquarters of one of the United States most powerful businesses.

In 2014, Commissioner Roger Goodell commanded a yearly salary of over $34 million, more than the Chief Executive Officers of Twentieth-Century FOX (K. Rupert Murdoch), Starbucks (Howard Schultz) or Goldman Sachs (Lloyd Blankfein). The NFL’s teams are even formally called ‘franchises,’ not unlike any other headquartered company that places smaller, local locations throughout different geographic market spaces. Each of these franchises happen to be worth over $1 Billion.

The National Football League has all of the markings of a major corporation. It should be studied as such.

Each week, I am going to collect some of the significant business and legal headlines related to the National Football League.

The Impact of ‘Deflategate’

Through their coaches, NFL teams are making known how they feel about the revenge tour of New England Patriots quarterback Tom Brady. This week, some courageous defensive coaches from different teams stated:

“Thanks to Roger Goodell, Tom Brady is going to kill us all.”- Anonymous AFC Defensive Assistant

“This [version of] Tom Brady scares the (expletive) out of me.” – Anonymous NFC Defensive Assistant

The impact of Tom Brady on the field is obvious. The Patriots regain consistency at the quarterback position after having started two different players (and almost a receiver) behind center. Brady, who happens to be pretty good at tossing the football, is already petrifying opposing defenses (see above). But what about the off-the-field effect of Tom Brady’s return?

As explained by SI’s Michael McCann, Tom Brady’s impact on the NFL itself is understatedly remarkable.

Several of the key legal arguments related to Brady’s case are much more significant than just the amount of air required in a football. Through his attorneys, Brady challenged how Commissioner Goodell may act in relation to player discipline. Specifically, Brady attacked how Goodell carried out his investigation and proceedings into Brady’s discipline.

Pursuant to Article 46 of the NFL’s Collective Bargaining Agreement, the NFL Commissioner may serve as arbiter in disciplinary arbitration hearings. Essentially, Brady’s team felt that the Commish was biased.

For example, Brady accused Goodell and the NFL of refusing to allow depositions of key NFL personnel related to Deflategate (Jeff Pash, NFL’s lead investigator). Amongst other things, Brady also challenged the relevance of the NFL’s inquiry into his destroyed cell phone and whether Article 46 should exist at all.

Anyway, Tom Brady stopped pursuing this case and accepted his penalty. However, this issue is not going away.

What is significant about Tom Brady’s legacy in Deflategate has to do with future NFL players. In 2020, the NFL and NFL Players Association will begin negotiations on a new Collective Bargaining Agreement.

A sticking point of the next negotiation will be related to the powers of the Commissioner, the Brady case will trigger disputes over Article 46 and set the tone for the debate. If this debate turns ugly, the NFL could be headed for a lockout or player strike in 2021.

Could a lockout end Roger Goodell’s tenure as Commissioner of the NFL? Will Brady’s loss in court ultimately lead to Goodell’s demise?

NFL Viewership Drops Precipitously

As the Wall Street Journal pointed out this week, the NFL’s viewership has dropped 10% this season and advertisers are getting fidgety. WSJ takes a rational approach:

The NFL decline isn’t unique. NBC’s Summer Olympics coverage fell 15% from the 2012 London games and national ratings for baseball playoffs and World Series have been declining for many years…

Naturally, a football metaphor was necessary:

Like a quarterback used to making dramatic fourth-quarter comebacks, the NFL isn’t panicking. “There are bumps along the road, but it’s not like we haven’t been here before.”

The NFL isn’t just some reality T.V. show that has ratings which fluctuate based on the individual characters that season, is it?

Through the first quarter of the 2016 NFL season, the league has been decimated by injuries and the absence of it’s best ‘characters.’ In addition to the aforementioned Tom Brady, players injured and absent include: Le’Veon Bell, J.J. Watt, Tony Romo, Adrian Peterson and others.

Also, some of the NFL’s biggest primetime games have run counter to competitive programming. Last week’s Monday Night Football coincided with the first Presidential Debate. But does that make much of a difference when considered in the aggregate data? Probably not.

Another weak argument offered is that it somehow relates to Colin Kaepernick. The theories related to this suggest a correlation between viewers being upset with Kaepernick’s protest and, thus, are protesting the NFL themselves.

Aside from this making little rational sense, not enough data exists to suggest this correlation. If this is a legitimate concern of the NFL’s (I don’t think it is), they would probably test for it longitudinally through control groups or surveys.

Perhaps fans just are not ‘in’ to football yet this season. Between the four week pre-season and the rush of fantasy football, some fans may just be a little football-weary. I would expect the NFL’s Nielsen ratings to climb once temperatures drop, fans are caught indoors, and playoffs approach.

Remembering When Donald Trump Went to War With the Dolphins Over Coach Don Shula

Is there anyone who hasn’t dreamt of being an NFL owner?

One of my favorite episodes of ESPN’s docu-series 30 for 30 focused on a failed NFL competitor, the United States Football League. ‘Small Potatoes: Who killed the USFL?‘ features a particularly interesting subplot: Donald Trump’s ownership of the New Jersey Generals.

This bizarre tale begins in October, 1983. At the time, Trump owned the Generals and jockeying against himself (and the USFL) the NFL. Ultimately, Trump lost.

In an effort to make the greatest football team of all time, Donald Trump sought to employ a Don of his own, former Miami Dolphins head coach Don Shula. The only problem is that Shula was currently under contract with the Miami Dolphins.

What happens next in the actual negotiation is not exactly known, but Trump soon took to the press. Trump alleged that the negotiation fell apart merely because Shula was insisting on a particular apartment in New York. He stated:

“There was no way I could part with the apartment. I guess he was a little upset that the apartment thing came out. You know he was interested.”

Naturally, Dolphins owner Joe Robbie fired back. He replied:

“This confirms my suspicion that Donald Trump has been engaged in more ballyhoo for his grand entrance to the U.S. Football League than in a serious effort to build his franchise competitively by sound, professional management. Headlines in the sports pages and network television can be mighty heady to Fifth Avenue Tycoons.”

In fairness, Shula apparently did discuss the job with Trump at some point. However, the extent or progress of their negotiation is unknown. Shula retired as the winningest coach in NFL history.

The business of football is undeniable; so huge that even Donald Trump wanted to get involved.