The National Football League – The Ethical Position of America’s Most Powerful Sports League


 

 

Introduction

            The National Football League (NFL) has grown from a small competitor to the American Football League in 1960 to become the most popular sports league in America.  With 32 teams and over $6 billion in annual revenue, the NFL has found its niche amongst sports fans as the new national pastime.  What makes the NFL different is its business model, its all-encompassing fan experience, and the way that the league has been defined from a competitive standpoint.  Major League Baseball has, for quite some time, had a problem with holding onto and creating new fans of their league.  People no longer turn on a random baseball game in mid-July because the games are too long, the competition is too unbalanced and the passion for the league as a whole is not there.  The National Basketball Association has had an incredible amount of success since David Stern’s initiation as commissioner in 1984.  The NBA’s problem is that before the start of each season only about 6 or 7 teams have a realistic chance of winning the NBA Championship. 

 

 

NFL

MLB

NBA

NHL

2008 League Revenue

$7.6 billion

$75.8 billion

$3.8 billion

$2.8 billion

2008 League Income

$1.03 billion

$501 million

$233 million

$184 million

2008 Average Team Value

$1.04 billion

$482 million

$367 million

$223 million

 

*Harvard Business Analysis

 

The NFL has solved both of these problems.  Parity in the NFL has been created by introducing a “hard salary cap” which only allows each team to spend the same amount of money on players.  Likewise, by embracing fantasy football, the needs of the fan and bolstering the strength of the NFL Network, there are more fans of the NFL than any other sport in America.  This paper will touch on the success of the NFL business model as it relates to ethics and address the question of whether the league and Roger Goodell have sacrificed too much in the way of player safety, player retirement, and the fan experience.  Additionally, it will touch on whether or not the NFL’s goal of $27 billion in revenue by 2027 hinders their ability to operate ethically (Kaplan).  The NFL has a history of controversy both on and off the field and this paper will seek to show that decisions related to this controversy do not always correlate to the public mantra and morals that commissioner Goodell has outlined in his tenure.  The NFL has not followed the duties of moral action outlined by Norman Kant and has instead, stemmed the tide of ethical progress by masking business advances with no regard to these important issues.  The social science of business ethics could help the NFL navigate its way to finding a happy medium between reaching its financial goals and adhering to the proper ethical needs of a juggernaut company.

 

Player Safety: A Real NFL Concern?

 

            The NFL finds itself in a tug of war between its goal of reaching $25 Billion in revenue by 2027 and making the game safer for players and more interesting for fans.  So far, they have not sacrificed much in the way of the game product.  In 2011, after a bevy of serious and notorious head injuries to renowned players, the concussion problem came under the spotlight of the national media.  Roger Goodell changed both the on-the-field rules for player safety and the post-play protocols for concussion testing.  Defenseless receivers (those going for the ball in the air and thus not looking for attacking defenders) were now protected and helmet-to-helmet hits were responded to by significant fines from the league office.  There were many outcries against these sanctions but the NFL felt it was the only way to deal with the serious problem of having the fastest, strongest, and most athletic men literally looking to kill one another.  As far as concussion protocols goal, the NFL bolstered the rules by “combining a symptom checklist, a limited neurological examination including a cognitive evaluation, and a balance assessment.”  As Dr. Margot Putukian, member of NFL Head, Neck and Spine Committee and chair of the Return-to-Play Subcommittee has stated, this will make sure that the “injury is identified, and athletes with concussion and more serious head and spine injury can be removed from play” (NFL.com).  Yet, these changes seem to be coming from the exact opposite place of other NFL initiatives in recent years.  For a few years now, Roger Goodell has been in support of increasing the NFL season from 16 to 18 games, an idea that was thwarted by the NFL Players Association and one that the NFL eventually gave up on.  Despite this, the NFL has continued to roll out games on Thursdays, deviating from their typical all Sunday and one Monday night game.  For this season, 2012-2013, the NFL has increased the number of Thursday night games to 12 (Block).  In addition, there is no longer guaranteed byes (*each team is given one bye week a year in which they do not play a game) before the Thursday night games which has some teams playing 3 games in as little as 10 days.  Many head coaches and general managers scrutinized the new policies but the NFL did not listen. 

 

Roger Goodell chose to highlight the opportunity for more teams to be under the national spotlight instead of touching on the hundreds of millions of dollars in revenue the new games would add to the NFL’s balance sheet: “Adding these games to the NFL Network schedule will give more players, teams and cities the primetime stage,” NFL commissioner Roger Goodell said in a statement. “Our fans can now get an early start on the NFL weekend in the season’s first 15 weeks,” he went on.  As this Hollywood Reporter article puts it – “Clearly, the coaches’ concerns are secondary to the huge financial incentives involved”(Block).  The dichotomy of what is said and what is actually undertaken is a huge problem for the ethical sustainable of the most powerful sports and entertainment league in the United States.

 

Revenues and Returns: Where is All of the Money Going?

 

            The NFL earned an estimated $7.6 billion in revenue in 2008 with an average team revenue of $1.08 billion.  The deals that the NFL has with Fox, NBC, CBS, and ESPN equate to over $15 billion dollars. 

 

Network Deals

Fox

CBS

NBC

ESPN

DirecTV

Value (Billion $)

4.3

3.7

3.6

8.8

4.0

 

*Harvard Business Analysis

 

Even through a recession the NFL has continued to increase its profits quarter over quarter and “if it maintains its current growth rate, the NFL would reach $31 billion in revenue by 2027 (Fisher)”, $6 billion more than its goal.  So, where is all of this money going?  The NFL is unique in that they offer revenue sharing amongst all of their franchises.  “The goal of this program is to support economic parity by distributing local revenue from large market teams to small market teams”, says an analysis of the NFL business model by Harvard Sports Analysis.  Not only does this sharing model allow all teams, both small market and big, to compete for a Super Bowl year in and year out, it allows the risk of the NFL to be distributed nearly evenly among all 32 teams.  In 2010 the owners opted out of the current collective bargaining agreement based on the fact that they felt like the revenue sharing was not completely fair and that player salaries had jumped too high.  Essentially, billionaire owners were fighting millionaire players for the proper piece of the NFL revenue pie.  Eventually an agreement was reached in 2011 for a new 10-year CBA. 

 

While all of this was going on, retired players were still struggling to receive the proper benefits and support.  Many, with head injuries and without, are having trouble coping with their transition into retirement.  Many of them cannot walk, have trouble remembering, and cannot operate in a lifestyle that does not involve being a gladiator on Sunday.  Junior Seau, a hall of fame linebacker for 20 years in the NFL, shot and killed himself in the chest on May 2nd, 2012.  This event was the boiling point for post-retirement troubles.  It came as a stinging reminder of the depression that many of these players face post-career.  Is the NFL giving enough money to counseling efforts, to pensions, and to retired players in general?  As Kant says, “another concern about contemporary business practices is the extent to which employees have very limited knowledge about the affairs of the company”(Kant, 8).  The question that needs to be asked is whether or not the current players know what they are getting themselves into when they sign a contract to play for an NFL franchise.  Should all players struggle to walk and live when they become 50?  The “National Council of Teachers of Mathematics” did a study on NFL lineman that showed that “while U.S. life expectancy is 77.6 years, recent studies suggest the average for NFL players is 55 and 52 for linemen”(Math, 1).  The Council also showed that, based on a study of 7,000 former players, lineman had a 52% greater risk of dying from heart disease than the general population.  Lineman should not be dying in their forties because they struggle to lose weight that they were forced to gain by their organizations.  As the NFL continues to glide towards their $25 billion dollar revenue goal they ultimately are not doing enough for the people who built the foundation for their continued success – the players.  The NFL needs to be more transparent about where their revenues go and how those revenues are directly helping struggling player both before and after retirement.

 

 

 

Addressing the Fan Experience: It’s all About the Money

 

            Within the last 5 years, the NFL has made it a point to embrace the business of fantasy football.  NFL.com now offers fantasy football leagues, players talk about their teams, and there are television shows (both reality and sitcom) that highlight the modern musings of fantasy football.  The NFL has worked hard to improve the stadium experience by providing more updates for fantasy football by allowing fans to know what is going on across the entire league without missing a beat.  This has all worked to the NFL’s advantage as the buzz on Sundays would not be the same without this billion dollar business (Smith).  Does this push to support fantasy football hinder the ability of the league to operate as a 100% ethical entity?  Do the players hosting fantasy football shows and talking about their skills and their statistics make the league more about the players than the teams?  The NFL has millions of fans of the league as an organization  and they only add to that number with the NFL Network.  NFL RedZone channel shows every single scoring play without commercials across every network  and every game – without commericals.  As Fox Business puts it, “this is like crack for fantasy players “(Smith).  The NFL has smartly and sneakily utilized a controversial area of business to their advantage by embracing it and engaging with it within the everyday business of maintaining their fan base.

 

Ethics Matter: Short Term

 

            In Kantian logic an organization is viewed as a “moral community”(11).  This moral community is outlined as one in which “each member of the organization stands in a moral relationship to all others.”   This is unlike the NFL, wherein Roger Goodell acts as a dictator, making decisions on a different playing field than all others involved.  Is it wrong for him to try to maximize the revenues of the league he controls and the owners with whom he is essentially at service to?  No.  But, then again, is it right for him to accomplish this by masking his actions as those beneficial to the players and the overall landscape of the league? No, it is most assuredly not.  As Kant says “treating the humanity in a person as an end, and not as a means merely, in a business relationship requires two things”(8): not using people and having a business that develops human rational and moral capacities.  The NFL and Roger Goodell need to move towards a place where their goals and the goals of the players and fans can all align. 

 

If sacrifices need to be made then they will have to made, but players are dying too young and safety in the game is not at the forefront of the NFL’s motives.  If the NFL continues down this path then football as a whole will become extinct as less and less parents will trust that their children are in safe hands beginning at even the youth levels.  It only takes quick and short term precautions and sacrifices to treat the players with more humanity.  I believe that the NFL’s business model is sustainable if in turn they choose to focus less on revenue maximization and more on their brand image as it relates to long term ethical sustainability.

 

Ethics Matter: Long Term

 

            The NFL, in the long term, must take a more balanced approach to their strategy and overall goals.  They must take into account the happiness and pleasure of more than just their bottom-line and the owners’ pockets.  They must, in fact, dedicate themselves towards more of a utilitarianism approach.  In utilitarianism, utility is maximized “if and only if the balance of benefit to harm calculated by taking everyone affected by the act in consideration is greater than the balance of benefit to harm resulting from an alternative act” (17).  The act of adding more games to the schedule and playing more games in fewer days does not benefit more people than sticking to the old way.  Goodell must, in the future, remove himself from the financials of these big picture moves and instead determine what actions benefit the most amount of people.  Happiness in the business of football is similar to happiness in the business of life as money should not be the priority – security, sustainability and togetherness are the truly important factors.

 

The NFL is currently at the top of the entire sports stratosphere, setting themselves up for sustainable business success.  Yet, in order to continue on this path the NFL must be more stringent on player safety and more cognizant of brand image issues caused by ugly controversies both in and out of the media.  Roger Goodell has proven to be an able servant to the owners but he must remember that he is also a middle man between both his bosses and the hapless players, who rely on him to properly handle part of their futures and the side effects of playing the most physical game on the planet.  If he does not resort to the corporate wisdom of having only financial concerns and instead builds his product with all parties in mind, the NFL will continue to grow and rise as it has over the last 50 years.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Works Cited

 

 

 

Block, Alex B. “.NFL Network Ups Thursday Night Football Games to 13 for 2012 Season.” Hollywood Reporter. N.p., Feb. 2012. Web. <http://www.hollywoodreporter.com/news/super-bowl-thursday-night-football-nfl-network-286942&gt;.

 

 

 

Bowie, N. E. (2007) A Kantian Approach to Business Ethics, in A Companion to Business Ethics (ed R. E. Frederick), Blackwell Publishers Inc., Malden, Massachusetts, USA.

 

 

 

Fisher, Jake I. “The NFL’s Current Business Model.” Harvard Sports Analysis (2009): 1-22. Sept. 2009. Web. <http://harvardsportsanalysis.files.wordpress.com/2009/09/the-nfl-business-model-and-potential-lockout.pdf&gt;.

 

 

 

Kaplan, Daniel. “Goodell Sets Revenue Goal Of $25B By 2027.” Sports Business Daily (n.d.): n. pag. Sports Business Daily. Apr. 2010. Web. <http://www.sportsbusinessdaily.com/Journal/Issues/2010/04/20100405/This-Weeks-News/Goodell-Sets-Revenue-Goal-Of-$25B-By-2027-For-NFL.aspx&gt;.

 

 

 

 

 

“NFL Announces New Sideline Concussion Assessment Protocol.” National Football League. N.p., Feb. 2011. Web. <http://www.nfl.com/news/story/09000d5d81e78cc4/article/nfl-announces-new-sideline-concussion-assessment-protocol&gt;.

 

 

 

Smith, Seana. “The Business of Fantasy Football.” Fox Business. Fox, 31 Aug. 2012. Web. <http://www.foxbusiness.com/2012/08/31/fantasy-football-drafts/&gt;.

 

 

 

Snoeyenbos, Milton, and James Humber. “Utilitarianism and Business Ethics.” (n.d.): 17-29. Web. <http://moodle.bucknell.edu/file.php/4592/Paper_1_Resources/Snoeyenbos_-_Utilitarianism.pdf&gt;.

 

 

 

“The Highly Successful NFL Business Model.” The Casual Truth. N.p., 10 Feb. 2010. Web. <http://www.thecasualtruth.com/story/highly-successful-nfl-business-model&gt;.

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