Now in the thick of the NFL season where focus is on the field, the games are really just the storefront for a $15-billion business populated by 32 assets worth roughly $2 billion each. With that in mind, here are ten business of football stories that have caught my eye in the first half of the 2018 season.
1. Deadlines spur action … or not. As discussed here often, Le’Veon Bell has boycotted his weekly $855,000 paycheck since the start of the season, and as someone who negotiated contracts as both and agent and team executive for a decade each, I have never understood that decision. In an apparent strategy of “saving himself,” Bell will forfeit $14.5 million this season, with no guarantee of making it up, money that is no pure savings—both in cash and cap—to the Steelers. We will find out in March if there is any positive outcome to Bell’s strategy, one that I am told was not endorsed by either the NFLPA or his agent, but my sense is that is money lost for good. A wish or hope is not a plan.
2. The new standard for NFL contracts. Aaron Rodgers is widely considered the best player in the sport, and now has the contract to match, which he signed before the start of the season. Rodgers’s contract eclipsed previous NFL standards for guaranteed money in one-year cash flow, three-year cash flow, total value and average per year. However, the contract does not include rumored precedent-busting adjustments to a changing quarterback marketplace or increases in the salary cap. The Packers avoided those game-changing precedents by throwing money—a lot of it—Rodgers’s way. Thus, the extension satisfied both parties: Rodgers received the most valuable contract in NFL history, and the Packers maintained their preferred contract structure for their best player.
3. The new standard for NFL contracts … on defense. Aaron Donald and Khalil Mack parlayed training camp holdouts into record-setting contracts, albeit in different ways. After boycotting his second consecutive August with the Rams, Donald secured the most valuable deal ever for a defensive player with a $22.5 million average. One day later, with the top of the market now set, Mack signed essentially the same contract—with $7 million more due to his pre-existing year being $7 million more than Donald’s—upon a trade sending him to the Bears. The two players matched the gold standard of $60 million in new guarantees set by Ndamokung Suh in 2015, with better numbers than Suh in three-year cash and average.
4. The anthem issue and player protests … or not. The NFL’s clumsy “Anthem Policy” allowing owners to discipline players for protest was rescinded, and the season began with nothing put in its place. In doing so, it allowed protests to continue with, surprisingly, little to no attention paid to them. Even inevitable comments from the Tweeter-in-Chief have not triggered reaction from players or owners. The story here is that there is no story.
5. Eric Reid is signed … but grievance continues. In related news to the above, while Colin Kaepernick remains unsigned and apparently unwelcome while pursuing a collusion grievance against the NFL, Reid is playing for the Panthers while pursuing a similar grievance. It took a new owner in David Tepper, unencumbered by the recent past to sign Reid, who continues his protests from the Carolina sideline. As for the collusion cases of both players, I have maintained that if there were indeed smoking guns—emails, texts, phone records, etc.—we would have seen them by now.
6. Fortnite is right. I have maintained that the biggest challenge for the NFL is attracting and maintaining younger viewers in a changing world of content delivery and consumption. The NFL’s new deal with Fortnite, allowing Fortnite players to wear NFL uniforms, is a nod to answering that challenge. No matter the revenue gained, this is the right partner for the NFL at the right time. It provides a touchpoint of engagement for millions of potential NFL fans.
7. Gambling is here: this is not your father’s NFL. The NFL shut down a fantasy football convention a few years ago due to its proximity to a casino, fought sports betting in New Jersey in court for six years and continues to ban players from frequenting casinos. Now, despite advocating federal legislation rather than the current state-by-state patchwork, the league is embracing the new normal. And there are strong business incentives to do so, knowing the lucrative fan engagement tool that sports betting provides. Indeed, individual teams are getting into the act as well, as MGM is now the official gaming partner of the New York Jets. League and team business in sports betting is being watched closely by players, who are starting to rumble about wanting their share of this new revenue stream coming from sports betting. This is an area to watch with in collective bargaining.
8. Sam Bradford a first ballot (business) Hall of Famer. The Cardinals are the latest team to fall under the spell of Bradford. After being signed as a placeholder for Josh Rosen, he was recently released with a parting gift of $16 million. It was reminiscent of two years ago, when the Eagles traded Bradford to the Vikings after handing him an $11 million bonus to be a placeholder for Carson Wentz. Bradford may still add to his astounding $130 million in career earnings as he continues to “win” in a business heavily tilted towards management.
9. Expensive placeholder quarterbacks not needed. Bradford was among a trio of expensive veteran quarterbacks—along with Josh McCown (Jets, $10 million) and Tyrod Taylor (Browns, $16 million)—signed to keep the seat warm for rookies taken at the top of the draft (Baker Mayfield, Sam Darnold and Rosen). In what should now be a lesson for teams debating whether to play young quarterbacks… just do it. Paying quarterbacks who are not in teams’ future plans—and perhaps not even in the teams’ October plans—at or around $1 million per game has not been proven to be worth the investment. A preferred strategy appears to be letting these young quarterbacks go through inevitable growing pains sooner rather than later in the evaluation process. Expensive insurance policies aren’t necessary.
10. Ratings—and future media deals—head north. After an overreaction to a ratings dip in 2016 and ’17, the “NFL’s in trouble” crowd has gone quiet. We are seeing an uptick in ratings across all networks and day parts, as NFL programming continues to deliver as no other programming can. When a new round of media deals is negotiated in a couple of years, the bidders will include traditional linear carriers (CBS, NBC, ESPN, Fox) AND nontraditional digital carriers (Google, Yahoo, Twitter, Amazon, Facebook, etc). And NFL owners will be beneficiaries, as they always seem to be.
As we head into the latter part of a season full of on-field intrigue, off-field business is booming. Despite whatever the latest “crisis” there is, the business of the NFL continues to win.