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SBD/February 17, 2014/Leagues and Governing Bodies
Roger Goodell's NFL Compensation Package Exceeds $44M In 12-Month Period
Published February 17, 2014
TOP OF THE HEAP: The pay almost assuredly makes Goodell the highest-paid sports exec. MLB in recent years changed its tax status to for-profit, so it no longer is required to make public its return, but when Commissioner Bud Selig signed his latest two-year contract in ‘12, ESPN reported the final year would pay him $22M, though other sources placed the figure north of that in the $30M range. “Bud Selig has historically been the highest-paid commissioner,” said SportsCorp President Marc Ganis, a consultant with strong ties to both leagues. “These numbers put Roger and Bud in the same league. A number of NFL owners feel Roger should be the highest-paid commissioner based on performance.” Among other leagues, the NBA has never publicly disclosed exec compensation, and with Adam Silver now at the helm, it is unlikely a new commissioner would make more than a long-standing commissioner in a richer sport. The NHL paid Gary Bettman $8.3M in the FY ended June 30, 2012, according its most recently available tax return. “Based on performance and success, it is logical to pay our commissioner competitively relative to other commissioners,” Kraft, Richardson and Blank wrote. The compensation information sent to owners on Friday showed outgoing NFL Network President & CEO Steve Bornstein with pay of $26M for the year-ended March 31, 2013. The trio of owners also wrote in the letter that Bornstein's pay includes “a one-time final contractual payment” of $19.6M related to the long-term appreciation in value of the NFL Network. Bornstein is scheduled to leave the NFL this spring (Daniel Kaplan, Staff Writer).
THE TAX-EXEMPT ISSUE: In N.Y., Ken Belson wrote Goodell's pay "exceeds the amount paid at far larger businesses and highlights the tax-exempt status that the league’s head office -- though not its teams -- has had for decades." NFL outside counsel Jeremy Spector in November wrote that the NFL "paid taxes on every dollar of income it earned." Spector: "Claims that the NFL is using a tax exemption to avoid paying the tax due on these revenues are simply misinformed. The confusion arises from the fact that there is one small part of the NFL, unrelated to all this business activity, that is tax-exempt: the NFL league office.” He wrote that the league office "acts no differently than a trade association that promotes its member companies, and has never claimed to be a charity" (N.Y. TIMES, 2/15). The issue hit Twitter on Friday after the story broke, with the N.Y. Times' Tom Jolly tweeting, "Nice paycheck for a guy who runs a nonprofit." NFL Senior VP/Communications Greg Aiello responded to Jolly, tweeting, "All NFL revenue goes to the teams, who pay the tax. The teams (owners) pay the commissioner. All NFL revenue is subject to tax" (THE DAILY). PRO FOOTBALL TALK's Mike Florio noted taxes "are indeed paid" by the NFL, and the league "felt compelled to point this out on Friday" (PROFOOTBALLTALK.com, 2/14).
FURTHER DETAILS: The WALL STREET JOURNAL's Kevin Clark noted NFL Exec VP & General Counsel Jeff Pash netted $7.8M in the same pay period, while league Exec VP/Business Ventures Eric Grubman made $4.2M. Meanwhile, NFL Ventures, the league's for-profit arm, "shot up in profitability" to $3B in '13 (WALL STREET JOURNAL, 2/15). Ganis said NFL owners decided that Goodell's performance was "worth a little more" than $1M for each of the teams -- "a very rational decision based on the extraordinary results Goodell has delivered for them" (AP, 2/14). PFT's Florio: "Ultimately, anyone is worth precisely what someone else will pay them." Goodell earned his salary "because that's what the 32 teams are willing to pay him to preside over the sport." Florio: "Considering the billions that are being generated on his watch, it’s hard to fault them for it" (PROFOOTBALLTALK.com, 2/14). ESPN.com's Kevin Seifert noted Goodell's average salary over the past two years is $36.5M, which is "more than triple the highest annual total he received in any year" before the NFL's '11 lockout. This "should tell you how pleased team owners are, both with Goodell's performance, and by the new leverage he delivered them in the CBA" (ESPN.com, 2/14).
TWITTER REAX: Panthers TE Greg Olsen tweeted, "Don't understand why everyone is surprised to learn Goodell earnings? He's made the owners and league big money. That's his job= BIG $$." But Octagon Hockey Dir Allan Walsh added, "Thinking of all the permanently disabled fmr NFL players+sham $760M concussion lawsuit settlement while NFL pays Goodell $44.2M annually." Forbes.com's Darren Heitner: "Why so many ppl up-in-arms about Roger Goodell making $44M? It's the fruits of a capitalist society."