Keeping Owners Happy (And Rich) Is the Priority

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The New York Sun

By next Wednesday, if all goes according to plan, the NFL’s current commissioner, Paul Tagliabue, will have a new job, retired NFL commissioner, and his long time assistant and former New York Jets public relations staff intern, Roger Goodell, will take his place. Goodell’s task is simple: He needs to convince 24 of the league’s 32 owners that he can keep making them boatloads of money.

After all, a major part of any commissioner’s job description, whether its Major League Baseball, the NBA, the NHL, or Major League Soccer, is to maximize an owner’s investment. Goodell, the league’s chief operating officer, has competition for the job.The league’s outside counsel, Gregg Levy; Cleveland lawyer Frederick Nance; Robert Reynolds, the vice chairman and chief operating officer of Fidelity Investments, and Mayo Shattuck III, chairman of the board, president, and CEO of Constellation Energy, have all made the final cut.

But the NFL traditionally has not gone outside the “football family” in the game’s modern era, which started in 1960 with the election of the Los Angeles Rams’ general manager, Pete Rozelle, to the post. Rozelle was just 33 years old at the time and began his career in impressive fashion. He maximized the franchise values for 14 owners by playing CBS against NBC and getting multimillion dollar TV deals.

But Rozelle needed congressional help and part of a commissioner’s duties include being a lobbyist in Washington, along with state capitals and local city councils. In Rozelle’s case, he needed Congress to change broadcasting laws so that the NFL could act as a monopoly and group its 14 teams into a single entity to negotiate TV deals. Rozelle first had to convince the ownership of the New York Giants, Los Angeles Rams, and the Chicago Bears to give up local TV contracts for the betterment of the league and that all teams should get the same TV monies.

Long-time Brooklyn Congressman Emmanuel Cellar pushed legislation through the House and on September 30, 1961, President Kennedy signed the Sports Broadcasting Act, which allowed Rozelle to “pool”the TV rights of the individual teams and sell it as a package to a TV network.

Rozelle set the standard for all commissioners. He knew how to maximize an owner’s investment and made the old football families, the Maras of New York, the Rooneys of Pittsburgh, and the Halas and Bidwill families of Chicago, richer than any of them could ever imagine.

But Rozelle’s luck eventually ran out. By the end of his contract in 1989, he could no longer get increases in TV contracts, and the league never settled its differences in collective bargaining with the players. Franchises were moving and the league lost the Raiders case (the league’s lead lawyer in that suit was Paul Tagliabue), which forced the league to change its rules about franchise shifts and basically rendered the league powerless in trying to control franchise movement. The league also lost an anti-trust case brought on by the short-lived United States Football League, although the USFL’s victory was largely academic as the disbanded league was awarded $3 in damages.

In 1989, Tagliabue was elected commissioner and soon after got lucky. In the early 1990s, Rupert Murdoch’s FOX network was struggling badly with just a handful of moderately successful shows. Murdoch offered the NFL billions if they would give him the CBS package of NFC games. The NFL owners liked the idea that Murdoch could further enrich them and accepted the offer. By entertaining FOX, they forced NBC and ABC along with ESPN and Turner Sports to up their offers as well.

However, Tagliabue could not stop franchise shifts either, and the league lost their remaining Los Angeles-area based team, the Rams, after the 1994 season. Ever the politician, Tagliabue had to deal with city councils in Jacksonville, Charlotte, St. Louis, Nashville, Cleveland, and with state officials in Maryland, Louisiana, New Jersey, and other locales in stadium deals.

Goodell has worked closely with Tagliabue since 2001 and knows the stadium problems that exist in New Orleans, Minneapolis, San Diego, San Francisco, Oakland, and Los Angeles. Goodell and Levy were probably involved in all the new TV deals that were signed over the past 18 months and the new players-owners collective bargaining agreement. Nance had a hand in the negotiations that brought a new franchise to Cleveland after Art Modell moved his Browns to Baltimore in 1995.

Knowing the nuts and bolts of how the NFL does business gives Goodell a significant advantage over Levy, Nance, Reynolds, and Shattuck. Goodell has been involved in the stadium game and the NFL faces immediate problems. Can New Orleans keep Saints owner Tom Benson happy, an issue that was a problem before Hurricane Katrina devastated New Orleans, or will Benson look elsewhere after the 2006 season for a home, like San Antonio? Will the York family be able to build a new stadium in San Francisco for their 49ers franchise or will they move the team to Los Angeles?

Then there is San Diego, where owner Alex Spanos can begin talking to other cities about their stadium plans after January 1. Spanos, who once owned the USFL’s Los Angeles Express, could move the franchise to another city after 2008 under the terms of his deal with San Diego.

The new commissioner also needs to solve Zygi Wilf’s stadium problem in Minnesota. Wilf is attempting to build a stadium/industrial park in Blaine, Minn., but that has gotten nowhere.

The NFL is the most successful North American professional sports league, but on the international level, it has a long way to go in catching up to Major League Baseball, the NBA, the NHL, and soccer. The league has spent more than 15 years trying to gain a foothold in Europe and has so far struggled to carve out a niche there.

At the last NFL owner spring meeting at Orlando in March, Tagliabue brought General Electric CEO Jeffrey Immelt, who is an unofficial league partner (in that GE’s NBC carries the NFL’s Sunday night package), to explain that the league needs to enter the Chinese marketplace.The NBA, thanks to Yao Ming, has captured that country’s sports market, and the MLB has also made inroads into Asia.

Tagliabue is leaving the NFL to his successor in far better shape than Rozelle did but the new commissioner has some problems that need to be addressed. Yet there is really only one issue that is of paramount importance to NFL owners: How will Goodell, Levy, Nance, Reynolds, and Shattuck maximize their profits? That’s the only thing that matters.

The New York Sun

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