SBJ/Sept. 15-21, 2014/Leagues and Governing Bodies

A league under siege, again

The Ray Rice controversy raises new questions about Roger Goodell and how decisions are made at the most powerful league in sports.

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After a week in which the NFL faced its sharpest criticism in memory, an audience of sports industry insiders, commentators, politicians and even casual fans was left questioning the league’s foundation.

How could the most popular, successful and politically savvy sports organization in America fail so publicly?

Commissioner Roger Goodell attended the NFL opener in Seattle on Sept. 4, a few days before the Ray Rice video became public.
Photo by: GETTY IMAGES
And what changes might that failure force inside 345 Park Ave., where Commissioner Roger Goodell and his inner circle were tarred as liars and seen as operating amid fading public credibility?

SBJ Podcast:
NFL writer Daniel Kaplan and Executive Editor Abraham Madkour discuss the Ray Rice situation, the investigation around the handling of it and how the NFL has fared publicly.

Change is certainly coming in the wake of the Ray Rice firestorm, ranging from how player personal conduct cases are handled to the way security and investigations are structured. In addition, there may be a push for Goodell to hire, well, another Goodell. More precisely, the pre-commissioner Goodell, who was the No. 2 executive at the NFL, acting akin to a chief of staff for his former boss, Paul Tagliabue, before Goodell eliminated the position after he assumed the top job in 2006.

“There was some talk for a while that that role would be filled, and it never was,” said Amy Trask, the former Oakland Raiders CEO who stepped down two years ago and now works for CBS Sports. “If you are to have a chief of staff, so to speak, that person must be comfortable telling you whatever he or she wants without hesitation, irrespective of if it is what you want to hear.”

It’s a role that some see as lacking at the NFL, as Goodell is known to be heavily engaged in a broad scope of issues. A deputy would seemingly ease that workload and let the commissioner focus on larger priorities.

While the deputy commissioner is absent from today’s NFL, it exists very visibly elsewhere. Bill Daly serves in that capacity at the NHL. Mark Tatum has that title at the NBA, replacing Adam Silver in the role when Silver became commissioner earlier this year. At MLB, Rob Manfred has been a clear No. 2 to Commissioner Bud Selig in recent years, and he’ll ascend to commissioner and succeed Selig in January. At NASCAR, Mike Helton effectively serves in that role as a key operator for the series. It’s a role that cuts the workload on the top person and offers him a sounding board.

Goodell, by contrast, has splintered power among key executives responsible for specific business lines: Jeff Pash, the longtime general counsel in charge of player discipline; Eric Grubman, now focused on Los Angeles and other initiatives; and Brian Rolapp, whose portfolio includes media, marketing and consumer products. What’s missing is that clear, singular deputy position.

Power at the NFL is concentrated in Goodell, whom the tabloids feasted on last week.
Not missing, despite the events of last week: Support for Goodell in his current position. Among league insiders, the clear consensus was that so long as Goodell is not shown to have lied or been aware of any cover-up, he’s secure in his job. That’s because, gauged by traditional business metrics, Goodell’s tenure as commissioner has been wildly successful.

Consider some of the other news from the NFL last week, all buried under the avalanche of bad press. Terry Pegula agreed to buy the Buffalo Bills for a record $1.4 billion. “Thursday Night Football” was launched on CBS. TV ratings remained stellar. And NFL Now, the new over-the-top network, was a success in its first regular-season week.

Those inside the league, and those who have recently left, all dismissed the notion that the league’s owners would dump a man who has orchestrated the greatest financial period in the league’s history.

“There is no chance this will affect his tenure as commissioner,” said Marc Ganis, a sports consultant who is close to many NFL owners and to the commissioner. “Concussions were going to take him down, the CBA was going to take him down, Bountygate [with the New Orleans Saints] was going to take him down — and every year there is something.”

Said Subway CMO Tony Pace, when asked about the Rice case and possible fallout: “Terrible event, but hard to see it impacting ratings. NFL is usually 34 out of the top 35 or 36 top-rated shows, so will marketers really not advertise there?”

Dov Seidman is the founder of LRN, a consulting firm that works for the NFL, and addressed team owners in March on workplace behavior. He said last week that it is important for the NFL to understand its crucial role in American society and realize why the brunt of criticism is falling on it, as opposed to, for example, the judge or the prosecutor who gave Rice probation after seeing the shocking elevator video that was made public last week.

“The NFL is on such a pedestal that society is looking to the NFL for leadership on these issues,” Seidman said. “The NFL has to be able to effectively lead on issues of deep concern to society.”

And that society has been hammering the NFL. This time, the hue and cry has spread beyond sporting circles, with mainstream media, morning talk shows, members of Congress and the National Organization for Women joining the debate.

The NFL, though, is something of a hybrid between those entities, privately owned but ever so public. Andy Dolich, a longtime sports executive, including for the San Francisco 49ers, said, “These are private businesses, but they are owned in large part by the public, especially morally. So it’s going to be a significant challenge [for Goodell].”

A week of headlines

Inside the offices of other leagues, teams, networks and agencies, the conversation among senior executives sounded much like what was being said at watercoolers in offices across the country.

In interviews with two dozen industry insiders — all of them plugged in and long on experience — the observations that emerged followed several common threads.

Headlines turned to whether Goodell knew what was in the video before last Monday.
One was that the league should have realized that its initial two-game suspension of Rice would be seen as soft, especially considering its previous handling of players who were suspended for marijuana possession or, particularly, in the
closely watched animal cruelty case involving Michael Vick. But, the refrain went, because the league is used to getting its way, its leadership likely assumed that the firestorm — which at least three people described as the largest crisis the league has faced under Goodell — would pass.

Another was that with the league’s credibility sustaining hit after hit as the conversation turned to who knew what and when, it would be better served if it put the matter in the hands of outside counsel.

Eventually, it did.

Another common refrain was that the NFL’s status as the nation’s most popular and profitable sport might have rendered it tone deaf, leaving it ill-prepared to deal with what quickly took the shape of a crisis. Several people described the league as arrogant. One went so far as to call it a “bully.” The consensus was that the league would have fared better if it had acted more transparently.

The conversation within sports differed from the mainstream narrative in one key way. While pundits and politicians called loudly and steadily for Goodell’s resignation, none of the executives interviewed for this story last week thought that they would get it.

“A head may roll at the league because of this,” said a former NFL marketing executive, “but it won’t be the emperor’s head. That’s not their style. And [Goodell’s] core competency is politics.’’

From the ranking person at a leading sports marketing firm: “This is the worst I’ve seen the league deal with this kind of situation. Somebody [at the NFL] will take the hit for this, but it isn’t going to be the boss.”

From a senior executive at a network that airs NFL games: “Roger’s going to survive this. But it’s going to be a blight on his legacy. This is something that may fade away but will never be completely forgotten.”

While most of the executives said they thought the league’s business metrics — ratings, attendance and beyond — would surge on unabated, some executives who have worked with NFL sponsors said they were concerned about the effect of the last week, and particularly on the way the league would be perceived by women.

“This will undoubtedly drive NFL affinity down among females, and the NFL cannot put their head in the sand and ignore it,” said Tony Schiller, a partner at Paragon Marketing Group, which has worked with NFL sponsors Anheuser-Bush and Gatorade. “Sponsors need to be thoughtful about how the NFL and its relationship with female fans has been damaged. That should impact activation in the near term. For NFL sponsors who are targeting female fans, it can’t be business as usual.”

Going outside

Late Wednesday, the NFL moved to seize control of its spiraling story when it announced the hiring of former FBI director Robert Mueller to investigate the league’s handling of the Rice case, with two well-regarded owners — John Mara of the New York Giants and Pittsburgh’s Art Rooney II — overseeing the investigation.

It’s not the first time the league has turned to an independent investigator. Less than a year ago, the league hired Ted Wells to investigate the allegations of misconduct in the Miami Dolphins locker room involving Richie Incognito and Jonathan Martin.

But until Wednesday night, the NFL’s failure to do the same in this case provided a further opening for criticism. It also left others who had been through similarly incendiary matters with other leagues questioning the NFL.

The NBA’s Silver, by comparison, immediately hired a special investigator after Donald Sterling’s racist comments became public in
 
Former FBI director Robert Mueller (top) will look into the league’s handling of the Rice case; owners John Mara (above left) and Art Rooney II will oversee the investigation.
Photo by: GETTY IMAGES (3)
late April, bringing in David Anders, partner with league counsel Wachtell, Lipton. The league also brought in outside counsel to investigate the Tim Donaghy referee gambling scandal in 2007, retaining Lawrence Pedowitz, also a partner at Wachtell, Lipton, to review the case.

The NBA did not assign a special investigator after Atlanta Hawks co-owner Bruce Levenson self-reported last week that he wrote an email in 2012 that included racial insensitivities, causing him to move to sell his majority interest in the franchise. But, in that case, the Hawks did, hiring an Atlanta law firm to interview team employees and review more than 20,000 internal documents. It was during that process that investigators came upon Levenson’s email from 2012.

A former longtime NBA team executive said he was struck by the contrast.

“There is always someone outside,” this executive said. “It is for third-party validation. Sometimes when you work in the league office, your optics become skewed. The NBA has always sought validation from third parties, whether it is from people from the FBI or professional law firms.”

The NFL also drew criticism last week for its repeated insistence that it had attempted to secure the security tape of the Rice incident but was unable to do so. Again, the contrast to another league’s handling of a recent case was stark.

While MLB came under fire at times for overstepping its bounds during its investigation of Biogenesis, at one point facing an accusation that its purchase of documents meant for state investigators impeded their pursuit of charges against the clinic, those aggressive tactics paid dividends. The evidence MLB acquired made for strong cases against 14 players connected to PEDs provided by Biogenesis.

MLB has since restructured its department of investigations, dismissing four staffers and hiring former Assistant U.S. Attorney Bryan Seeley to lead the unit. But of the 14 Biogenesis players, only New York Yankees third baseman Alex Rodriguez challenged his penalty, and most of his 211-game suspension held up following a hearing before an independent arbitrator.

MLB officials last week said privately they understood why some observers would want to link the Rice saga to Biogenesis or baseball’s battle against steroids. But they said there were key differences between the issues.

“The accusation here is some kind of cover-up,” said one veteran baseball executive. “That was never really the issue in anything in baseball.”

On the field

League and other executives weren’t the only ones closely monitoring, and commenting on, the developments from the NFL’s headquarters last week. NFL players clearly had their eyes on the story, as well.

NFL agent David Canter, president of DEC Management, said he was at the “Monday Night Football” game that the Arizona Cardinals hosted against the San Diego Chargers at University of Phoenix Stadium, and spoke to many players there.

“Players don’t want to play in a business where the league suspends a player for smoking pot for a season and a guy knocks his wife out — and she was knocked out — and gets two games,” Canter said on Tuesday. “Are we really supposed to believe that the NFL, the most powerful sports organization in the world, did not see this video? It’s hard to believe.”

Canter remained strident later in the week, even with the league having hired an independent investigator.

“Roger already had major credibility issues with players because he has ruled with such a relentless and hardened stance,” he said. “After this Rice debacle, I think his credibility is completely gone from the players’ side, and none of them can nor will ever trust him again. Remember, it’s not just his handling of Rice, but the fines, suspensions, drug policy, how he dealt with the ref and player lockouts, handing of [Indianapolis owner Jim] Irsay, handling of so many other issues that has built up into this snowball of mistrust on the players’ side.”

Veteran NFL agent Peter Schaffer, president of Authentic Athletix, said that players were embarrassed by the state of affairs, on several levels.

“Embarrassed that a man could do this to a woman, embarrassed that the league spends more time on punishment as opposed to counseling, awareness and education, and embarrassed that the league is more worried about their own PR than doing what is right to end domestic violence,” Schaffer said.

Seidman, the consultant, believes the NFL, which recently instituted a new domestic violence punishment standard, has already met the first four of his criteria for correcting a problem: truly acknowledging the error; the correction not being just for public relations; probing the organization for why it got it wrong; and encouraging feedback from the aggrieved.

As for the fifth criteria, truly changing behavior, on that, Seidman said, only time will tell.

Staff writers Bill King, Eric Fisher, Terry Lefton, John Lombardo, Liz Mullen and Don Muret contributed to this report.

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