NFL Commissioner Roger Goodell With Matt Futterman, Wall Street Journal August 14, 2008 Q: Do you go into a season with the mindset of what story you want to tell? What is the big picture for 2008? Commissioner Goodell: No, I think that’s the great thing about football. I’ve said it repeatedly before. We’re the ultimate in reality television. We don’t know what the story is. Stories will unfold. We never would have been able to anticipate the Brett Favre story 45 days ago. Stories develop as the season goes on. Young players come through and perform, whether through injuries by somebody in front of them, or whether they just come in and perform at extremely high levels. I think that’s one of the things that makes the game so great – the unexpected always happens in the NFL. Does last season’s success translate into an improved bottom line? Is there a direct correlation if there’s a huge amount of attention on the field with great stories, or is your reputation pretty well locked in place? It’s not a direct or immediate benefit like that. What it really does to us is it just continues to grow the popularity of our game. When you can have the size of the audience that watched the Super Bowl last year be able to be so entertained and so excited by that game, it carries over into the next year and it develops new fans and it gives people another way to get involved with our game. And that’s what we’re in the business of doing – growing our game. On the current situation with the owners opting out of the CBA and taking the position that the players have been given too much revenue: I don’t look at it like that. I look at it as the labor agreement, when you negotiate a labor agreement, has to work for all parties, in this case, the owners on one level and the players on the other level. And it wasn’t working for the owners. And that’s why they took the step to say, let’s trigger out, which was an option they had, and let’s make sure that we start addressing the issues to make sure it works for all parties. And that’s simply what they did, and so that starts the clock and gives us the ability to start negotiating so that we can address the issues of what wasn’t working for the owners. Of course, if the players have issues that aren’t working for them, we’ll look at that also. But the reality of it is, the labor agreement has got to be flexible enough to address all of these issues and make sure that the game stays strong. In the past would you say the owners have been satisfied with the status quo and generally pleased before this labor agreement? I don’t know if I’d say that. I think there’s always been a give and take in the previous negotiations. It’s a structure where there are different forces at play during a period of time in any agreement, and the forces now are becoming pretty extraordinary. We have significant economic conditions that are changing the environment for owners and for every other business, by the way. Consumers are feeling it directly. We’re all feeling it. So there are factors that we’d have to consider there. There are risks in the marketplace as a result of that that changed the economics for the owners. There are aspects of the arrangement that just aren’t working for the owners that need to be addressed as soon as possible, and that’s why we terminated now. Is big-market/small-market discrepancy at the root of some of this owner dissatisfaction? No, those are two different issues. That was something that got mistakenly mixed together in the last negotiations. Those are two separate issues. The NFL has the greatest amount of revenue sharing of any professional sports league, and it’s one of the fundamental aspects of our league, of why we continue to be successful and why we continue to be the leader in professional sports; because we have done revenue sharing in an intelligent and responsible fashion for all clubs, and it allows all our clubs the ability to be able to get the revenue to compete. The labor issue is, simply, are the labor costs too high? So you’re getting dispute about the labor costs being too high for high-revenue or low-revenue clubs. It’s not working for the majority of clubs, which is why we had a 32-0 vote. So I don’t mix those two issues. We will always look at revenue sharing. We have looked at revenue sharing. We share all of our national revenue equally. We share our gate on a 1/3-2/3 basis, and even some of that is pooled equally in terms of visiting team shares. So I think there are a lot of things that we do very intelligently in our revenue sharing. We have continued to make modifications to that, and we will. But this is about the labor costs. Does the revenue sharing have to be fixed as much as the labor costs do? No. You always modify the revenue sharing based on where we are as a league. Where are the revenues coming from? Are they coming from local or are they national? You obviously have to keep your eye on that and make modifications as you go. We did that when we realigned the league several years ago. What we did is we essentially pooled the VTS, so there were no financial ramifications by realignment. That was an intelligent thing to do and allowed us to make the best possible decision for our fans on how the league is aligned. That’s the kind of intelligent decisions we make on a regular basis so that revenue sharing continues to be one of the fundamental aspects of our success. How important was it to you to get Brett Favre back on the field once he said he wanted to play? I think you have two things here. One is if he decides he wants to play, he has certain rights as a player wanting to play. At the same time, the Green Bay Packers have rights. They held his rights as a player. So they had competing interests there. They had equal rights which needed to be resolved. I was interjected at one level because of a tampering rule, but I was also interjected from the standpoint of he had to be reinstated by the commissioner. I wanted to make sure both rights were respected and that they reached some kind of a compromise that they both felt comfortable with. I don’t make a decision about who signs him or who doesn’t sign him; once he went back to the Packers, they resolved that matter between the two parties, which is the way it should be. Does it feel good knowing Favre is still part of the equation, in terms of being on the field after his great season last year, and the fact that he’s been a face of the NFL for a decade or so? Sure. Having Brett Favre on the field playing in the National Football League is great for us. I’m very direct about that. If he wants to play, it’s a great thing for the NFL, so we welcome him back. But as far as the rights between the team and the player, those are issues that have to be dealt with on the club level. That’s not something the commissioner directly gets involved with, other than to make sure that our policies and procedures are properly respected. Is your biggest frustration these days the NFL Network? I wouldn’t say it’s the biggest. I would say that it’s frustrating for us because we think we have very compelling product and we know there’s demand from our fans. We hear it repeatedly, and we’re looking for broad distribution of the network. We think it’s important to us strategically over the next several years, but more importantly, it’s about delivering more football to more fans. We would like to get that broad distribution and we’re working hard trying to figure out the best way of doing it. You’ve been making the same argument for the NFLN that a lot of independent channels have been making for a long time. Is there a sense two to three years into it that this argument for broad distribution of the network isn’t going to get anywhere? No, I wouldn’t say that. I think, if you look back at the history, and I’m not an expert as it relates to distribution of cable channels, but it’s not unusual that you have these types of disputes among cable operators and programmers about how they get distribution. So I don’t find that terribly unusual in this industry, from what I’ve observed. We just find it unfortunate the consumer, our fans, are losing at this point in time because they’re not getting this high-quality entertainment, and that’s what we want to try to resolve. We’re going to look at various ways of being able to do that, whether it’s improving the content and the product; how we can make the NFL Network better so we can get the distribution that we believe it deserves. Has it been a money-losing proposition for the NFL so far? No, that’s not the issue. We’re making money on it. Our issue is getting broad distribution so our fans get to see our games. That’s another fundamental aspect of our media policies – to make sure that our games are available to the broadest possible audience. That’s what we’ve done successfully with broadcast television. We’re one of the few sports leagues to be able to continue to place product on broadcast television. We want all of our games, when they appear, not to be in 40 or 45 million homes. We want them in 80 or 85 million homes. It’s proven that our content has that kind of demand. Its ratings and its audience levels are very consistent with the most popular programming, if it’s not the highest programming, in all of entertainment. That’s why we believe there’s demand for our product. If you want to get the broadest distribution, why not just make a deal with ESPN? RG: It depends on what deal you’re talking about with ESPN. What we’re looking for is to get the broadest audience with the best-quality product. We’re looking at what we can do to make this the most attractive programming and most attractive content out there. It has to be done in an intelligent fashion because this is an important strategic asset for us. We want to have something that talks about football 24 hours a day, 365 days a year. We’re not talking about something that’s promoting other sports or other entities. We’re talking about something where people can go to find football 365 days a year. Is it something you think can be solved in the near future? I don’t know. I sure hope so. We’re working towards it, but again, this is a long-term strategy. We’re going to continue to negotiate and try to find creative ways to make sure we get this distribution, and we’ll do it as fast as we possibly can because we know the consumers want it. But we’re only one side of the party here. Is it difficult to keep your eye on that long-term strategy in the face of the short-term headaches? No. I think the most important thing for us to do is always keep the eye on the long-term. The National Football League was not built in a short period of time, and its success is really reliant on us making sure we continue to keep the long-term focus on our challenges and our opportunities going forward. In terms of going forward and how people are going to consume the NFL, and new media, including internet strategies, do you see games being digitally delivered down the road, or would that take too much away from the valuable broadcast packages? The premise is to continue to be successful on broadcast television. What we’re finding with various experiments going on with digital media, whether it be the recent experience with the Olympics, or what we hope to be able to determine through our experiment with NBC this season, are that these digital media opportunities are supplementing and adding to the audience for broadcast television. It appears in the short-term that may be a very positive development. So that would be a reason why we would continue to do these experiments – to learn more about it and learn how we can use these technologies to be able to broaden our television audience. So you’re trying to prove to the broadcast networks that digital media wouldn’t detract from the broadcast audience, but potentially add to it? Again, the fear always is that these are going to detract from the broadcast audience. It doesn’t appear to be the case. In fact, what it does is create greater interest in the broadcast. So what we’re looking toward is what it is we can do with our digital media assets to broaden that audience, to create more excitement, to create more interest, so that we broaden our broadcast audience and become more successful on broadcast television. The broadcast outlets are always going to want more. Are you in a position where you’re going to be able to give it to them? There’s been talk of shortening the preseason and extending the regular season. Do you think you’re heading down that road? That’s a little different. What we’re trying to do is make sure that all of our content is high quality, and it meets the standard of what we think the excellence of the NFL content is. So what we’re looking at is whether the preseason is really that high quality that we expect from NFL programming, and I don’t think it is. So what we’re looking to do is say, can we convert some of that programming into high-quality regular-season programming? We play a 20-game season right now – 4 preseason and 16 regular season. We’re evaluating whether we’re better off with a 17-3 ratio or an 18-2 ratio, again, to improve the quality of that content even further. And it does provide more content in that fashion. Do you have a preference for which way it would go – would you start before Labor Day or go longer? Interestingly enough, we do have the option to move the Super Bowl later. The current analysis would indicate that we would go after Labor Day, a week later in the season or two weeks later in the season. So you’d stick with starting it when you do now? Yes. That’s when football season is. We celebrate the start of football season with Kickoff when we come back from Labor Day and everyone’s done with summer vacation. It’s football season. Do you have to end the season by the Daytona 500? No. Our view is, when we’re getting into that late season, we really own that calendar, and that’s an opportunity for us to continue to build our game. Do you see a team in Very possibly. Our experience in Would an overseas franchise go to I wouldn’t foreclose it. It could go someplace else, but the In the shorter term, could there be an NFL team in I don’t know. Right now we’re doing what we can to try to broaden the fan base for our Buffalo Bills. Several years ago we worked to regionalize that team in western Being from the I think it’s a high priority for us to make sure all of our teams are successful, and we look to see what we can do to make them successful. ### |
Thursday, September 04, 2008
NFL COMMISSIONER ROGER GOODELL WITH WALL STREET JOURNAL
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