WASHINGTON, March 10, 2014 — With the Super Bowl over and the NFL Draft two months away, those desperate for any nugget of National Football League news have turned March into the political equivalent of the NFL silly season. In politics, the silly season is when non-stories are turned into stories by writers desperate to write about anything so they can remain employed. The sports world is no different.
The newest non-story is the announcement that NFL Commissioner Roger Goodell earned $44 million in compensation in 2013. Other than Goodell needing a top notch tax attorney, there is nothing to be said. Yet, some reporters just cannot handle anybody experiencing hard-earned prosperity in tough times, good times or any time. Yes, hard-earned prosperity.
For those who think athletes should not make money to play with a silly little ball, repeal the laws of supply and demand. For those who think an administrator who never has to take the field should be paid less, feel free to live in Cuba or North Korea.
In the United States, people have the right to get rich, provided they do it legally.
While some sports reporters are slightly to the right of socialists, one particularly snide reporter felt that Goodell himself was unworthy of the money. A satirical piece had Goodell’s salary going to haircuts so he could look good on camera saying nothing.
The real truth, as much as it is uncomfortable for many people to hear, is that Roger Goodell is worth every single penny of his salary. One could even argue that he is underpaid, but for now it would be acceptable to call him compensated equitably.
Goodell’s predecessor Paul Tagliabue walked on water and turned it into wine. Tagliabue left Goodell a league in fantastic shape. Goodell had three options on what to do with the empire he inherited. He could maintain it, expand it, or preside over its decline until it was destroyed. While the last option is not desirable, even the Roman Empire saw a rapid decline. Goodell could have played it safe, took no chances, been happy to have a multi-billion dollar business, and cautiously preserved the status quo.
Goodell chose expansion, and on virtually every front, he got things right.
While the NFL has become a $9 billion business, Goodell wants it to eventually reach $25 billion in annual revenue. That may sound audacious, but Jack Welch turned General Electric from a $14 billion annual business to a $500 billion colossus. Giving Welch a platinum retirement parachute of over $1 billion was more than reasonable. When Goodell leaves, he no longer collects his salary. Yet the league will still be making money in perpetuity provided that his successor also gets it right.
Goodell now has fans in London, and the NFL is playing games in England every year.
Fans are hungry for the NFL, and every time there is talk of a saturation point, fan interest disproves that notion. The NFL used to release the schedule on a piece of paper. Now there is an entire schedule show. The Draft is now a nighttime event that begins on a Thursday. Draft ratings are higher.
Even Thursday Night Football, which often features less than stellar games, has higher ratings than other sports.
The most important thing Goodell has done is preserve labor peace. Goodell played hardball during the 2011 lockout, and the players and owners reached a deal that preserved football continuity through 2021. Other sports have constant work stoppages. The NFL guaranteed an entire decade of uninterrupted professional football.
Roger Goodell has also cracked down hard on player misconduct. Many of the players feel that Goodell is a shill for the owners, but tell that to the owners he fines when they cross the line. Goodell is obsessed with protecting “the shield,” and has done so successfully.
The lingering issue over his tenure is the concussion issue. The players suing the league played the game before he became Commissioner. He engineered a settlement that had league executives jumping for joy. A judge rejected the deal, but that does not take away from his effort to steer brilliantly threw a potential minefield. Another deal will get done.
Any CEO should be attacked for taking ridiculously large compensation packages when their business is losing money, but Goodell took a bunch of rich people and made them much richer. His 2014 compensation was less than 1/2 of 1% of league revenues. Some CEOs make hundreds of times more money than their employees. Goodell’s pay was barely more than twice what the top players earned. From a corporate pyramid structure, this is completely reasonable.
Goodell gave himself a 20% pay cut when the economy crashed. The economy is still stagnating in many sectors, but luxury items have recovered strongly. Goodell runs a luxury business, and is paid well because everybody around him is making money. This flows down to increased jobs for everybody from peanut vendors to parking attendants. When revenues soared, Goodell rightly benefitted.
Platinum CEOs deserve platinum pay. Goodell is worth every penny.