There are two conflicting narratives emanating from the gilded corridors of the National Football League (NFL). One paints a picture of a hugely popular property that remains awash with cash, a domestic juggernaut and the richest in world sport; the other centres on a fundamentally divided game, one rattled by persistent infighting, political controversy and dwindling public interest.
With the new season set to kick off this coming Thursday - when last season’s Super Bowl champions, the Philadelphia Eagles, take on the Atlanta Falcons at Lincoln Financial Field - it is clear that old habits die hard in the world of football. More money, it seems, only spells more problems, and as more cash flows into the game, the troubles keep mounting up.
For Roger Goodell, whose tenure as NFL commissioner was prolonged for five years back in December, the challenges are many, even if the league’s business remains, purely in economic terms, in rude health. Persistent national anthem protests, scientific reports linking football to concussions and degenerative brain disease, and incidences of domestic violence and sexual harassment continue to weigh heavily on the 59-year-old’s shoulders. How his stuttering, much-maligned administration deals with the fallout of each of those issues this season is likely to go some way to determining his legacy.
Beware the anthem standoff
After a short-lived show of unity last season, relations between owners and players soured again in May when it emerged that the league’s revised national anthem policy would require players to stand for pre-game renditions of the Star Spangled Banner, and permit teams to discipline those who refused to. Naturally, the amendments sparked widespread blowback.
The NFL Players’ Association (NFLPA) quickly filed a grievance against the new policy, which the league imposed without consultation with the union, and in July enforcement of the amended rules was put on hold pending further talks. Since then, a series of confidential meetings between representatives from the NFL and NFLPA have taken place, but it is unclear how, and when, the contentious issue might be resolved.
Whatever happens on this particular issue, the NFL is as politically charged and deeply divided as at any time in its history. Reaching consensus on any subject - whether it be social justice or the impact of concussions - has always been difficult for the league’s owners and players. Not much has changed heading into the new season.
With US president Donald Trump weighing in at every opportunity, and players continuing their #TakeAKnee protests during pre-season, the anthem furore is unlikely to be defused anytime soon. Indeed, it will likely be a key sticking point when the league’s new collective bargaining agreement (CBA) is hashed out before its expiry at the end of 2020.
Further compounding matters is the fact that Colin Kaepernick’s collusion claim against the NFL - in which he alleges team owners have conspired to keep him unemployed because he is 'bad for business' - will continue after an arbitrator denied the league’s request to dismiss the case. Last month’s ruling gives Kaepernick, the first player to protest racial injustice and police brutality by taking a knee during anthem renditions two years ago, and his attorney, Mark Geragos, more time to gather evidence ahead of a potential full hearing.
Whether or not his name has indeed been blackballed, Kaepernick and the movement he has inspired are not going away. If the trial goes ahead, it would be at best an unwelcome distraction for NFL bosses, and at worst irreparably damaging. That Kaepernick has now been positioned as the face of Nike’s 30th anniversary ‘Just Do It’ advertising campaign has only heightened the controversy, reigniting a debate that continues to rage on social media and potentially straining relations between the NFL and Nike, one the league's most valued partners.
Controversies aside, business is booming
As the NFL’s only publicly-owned franchise, the Green Bay Packers can always be counted upon to provide a yearly insight into the economic health of the game. Their most recent annual financial report showed that the team earned record revenues of US$454.9 million for 2017, and that every team in the league received some US$277 million directly from the NFL last year. That amounted to a record US$8.1 billion in total distributions last season, a 4.9 per cent year-on-year rise in national revenues for the 32 franchises.
For all the talk of declining TV ratings and waning interest, the NFL remains by far the most popular sports league in the United States. Last year, NFL revenues topped US$14 billion, more than any other league worldwide, while in May the Carolina Panthers sold for an NFL-record US$2.2 billion, underlining the game’s continued appeal for investors. But it is not only the owners who are cashing in: this off-season, the extent to which the NFL’s business is booming was aptly illustrated by the eye-watering numbers handed out in a series of bumper player contracts.
In February, just days after the Eagles claimed last season’s Lombardi Trophy, star quarterback Jimmy Garoppolo became the highest-paid player in the NFL when he signed a five-year, US$137.5 million contract with the San Francisco 49ers. That deal was then surpassed in May when Atlanta Falcons quarterback Matt Ryan put pen to paper on a five-year deal worth US$150 million.
Yet Ryan’s reign at the top was short-lived. In August, Packers quarterback and two-time league MVP Aaron Rodgers (below) finally agreed a four-year deal with his team reported to be worth US$134 million. Meanwhile in the same August week, New York Giants star Odell Beckham Jr signed a five-year contract extension worth a reported US$95 million, making him the highest-paid wide receiver in NFL history.
Gaming the system
As expected, the US Supreme Court’s landmark ruling on the legalisation of sports betting has opened the proverbial floodgates, with many sports organisations having moved quickly since May to capitalise on what is guaranteed to be a lucrative new market.
Having previously fought the legalisation of gambling on sport, the NFL recently voiced its support for a proposal by Democratic senator Chuck Schumer to initiate federal oversight of sports betting. Schumer’s plan would impose a strict regulatory framework and require individual leagues to provide official data and statistics to bookmakers, a move that would, among other things, dramatically enhance the value of official data partnerships.
Despite insisting in a recent statement that its ‘long-standing and unwavering commitment to protecting the integrity of our game remains absolute’, the NFL has already relaxed its rules concerning gambling sponsorships, allowing franchises to sell sponsorship deals to casinos that work alongside bookmakers and betting companies.
While any casino involved in such an arrangement will still be prohibited from directly advertising its associated sportsbook alongside an NFL team, the league’s business ventures committee ruled in August that teams can now sign deals with casinos and fantasy sites, giving them permission to broadcast adverts during preview and post-match programmes, as well as during pre-season games.
The move also paves the way for teams to sell stadium naming rights to casinos, which will no doubt come as music to the ears of the Oakland Raiders ahead of their relocation to the gambling mecca of Las Vegas in 2020.
Playing the media
The NFL’s declining linear TV ratings have been well-documented in recent times, but acknowledging that trend paints only part of the picture. In 2017, NFL programming accounted for no fewer than 71 of the year's 100 most-watched telecasts in the US, while February’s Super Bowl drew 103.4 million American viewers. Still, the league knows it must embrace new forms of digital distribution if it is to reach its increasingly hard-to-reach and fragmented yet no less passionate fanbase.
Few leagues are more willing than the NFL to carve up their media rights any which way in order to drive additional revenue growth and satiate the appetites of audience-hungry media companies. In recognition of current media trends and changing viewing habits, the league’s media department spent much of last season overhauling its streaming strategy. In December, Verizon relinquished its exclusive mobile rights despite agreeing a reworked deal worth US$2.5 billion over five years. That paved the way for NBC, Fox Sports, ESPN and CBS to also secure expanded agreements that included mobile rights for the first time.
More recently, Amazon agreed to pay a reported US$130 million to retain streaming rights to Thursday Night Football for the next two seasons, having drawn more than 18 million total viewers over its 11 games last term. Under the new deal, which is sure to bolster NFL coffers once again, Amazon-owned Twitch will now show games live on its platform, while streams are set to be made available via the company’s Prime Video service on Comcast cable boxes for the first time.
Last month, Brian Rolapp, the league’s chief business and media officer, said he expects the tech giants to become major players in the live sports rights market by the time its existing national broadcast deals expire in 2022. He said that year is likely to be an “inflection point” but also warned that streaming technology must improve sufficiently before then if the NFL - a property whose games command huge concurrent audiences - is to move beyond experimentation and seriously consider putting more programming on emerging digital platforms.
“We can get 25 million people; I have not seen a live event on the internet that can serve 25 million concurrent users at a high quality,” Rolapp said. “It’s one of these things that will need to be resolved, because money is not the issue for these guys.”
In January, Fox Sports ousted NBC and CBS to become the exclusive broadcast rights holder of Thursday Night Football, agreeing a five-year deal worth more than US$660 million per year.
New faces in high places
Following February’s Super Bowl, the NFL and Nike extended their on-field apparel contract until 2028. From 2020 onwards, Nike’s licensed gear will be manufactured and distributed through Fanatics’ channels after the league penned a ‘ground-breaking’ ten-year deal with the company, whose mobile-first, vertical e-commerce model is already being utilised by other leading US sports properties.
Nike’s renewal provides a degree of continuity to an NFL commercial portfolio that continues to evolve. Ahead of the new season, Pizza Hut is in for the scandal-hit Papa Johns, but the NFL’s commercial heads are eyeing more non-traditional revenue streams through which to grow their business. Reports say the league is in talks to expand its newly opened and now non-exclusive ticketing platform to Amazon and ride-share services Uber and Lyft, for example, part of an ongoing effort to broaden accessibility and capture larger amounts of consumer data.
Away from sponsorship matters, there have also been some noteworthy changes in the league’s front office this off-season. Veteran league spokesman Joe Lockhart has now retired, while Maryann Turcke and Tim Ellis have been installed as chief operating officer and chief marketing officer respectively. Turcke, formerly president of NFL Media, replaced Tod Leiweke, who is now spearheading Seattle's proposed National Hockey League (NHL) expansion team, to become the league's highest-ranking female executive. Meanwhile Ellis, a former Activision Blizzard executive, succeeded Dawn Hudson, who was an influential figure in the NFL league office before she stepped down in March to become chief executive of the Academy of Motion Picture Arts and Sciences.
Both Turcke and Ellis will have been handpicked by Goodell, who is contracted to remain as commissioner until at least 2024, and both will be tasked with helping him achieve his personal target of increasing annual revenues to US$25 billion by 2027. Turcke, in particular, will be a crucial ally. She now leads several of the league’s key functions, including its marketing, communications, human resources, international and events and technology departments, while her strong background in media will be an important asset ahead of the pivotal TV rights negotiations to come.
And as the new leadership team beds in, there could well be more changes on the horizon. Several team owners - including the most outspoken, and arguably most powerful, of them all, Dallas Cowboys owner Jerry Jones - have long called for a less wieldy and better qualified league office. Such calls are unlikely to subside this season, ensuring Goodell (below) will need to select his closest comrades carefully for what is rumoured to be his final term as commissioner.