Editor’s note: This story has been revised from the print edition.
During Roger Goodell’s terrible, horrible, no good, very bad season, it seemed that almost every critique of his performance included a mention of how much he earned: $44.2 million, according to the league’s tax return filed in early 2014. Even presumed presidential candidate Jeb Bush brought up Goodell’s pay during a speech as recently as last week. When asked about being considered several years ago for the commissioner job, Bush said, according to published reports: “I saw Roger’s pay package. Wow.”
So it should come as no surprise that the release last week of Goodell’s latest annual pay figure — $35 million, reported in the league’s newly released tax return — would also attract attention, even though the pay period does not cover the months of uproar that shaded the NFL commissioner’s season last year. The pay period, instead, covers calendar year 2013 and was disclosed as part of the NFL’s 2014 fiscal year, which ended March 31, months before Goodell handed down the ill-fated two-game suspension of Ray Rice and a season of turmoil followed for the league.
|Roger Goodell was paid $35M for fiscal 2014.
So why does Goodell’s pay draw such attention? At his recent Super Bowl press conference, no one blinked when The New York Times asked if he would be getting a pay cut, given how storylines played out for Goodell and for the league in 2014.
“One of the things is, in the NFL, you don’t have player contracts like other leagues,” said Jed Hughes, who runs the sports practice at Korn/Ferry, a frequent adviser to NFL teams in their head coach and executive recruitment. “Criticism is deflected from players and goes to the commissioner.” Hughes was referring to the fact that the top players in leagues other than the NFL can be paid close to, or even more than, their
SBJ Podcast Archive:
From Sept. 15, 2014: NFL writer Daniel Kaplan and Executive Editor Abraham Madkour discuss the Ray Rice situation and Roger Goodell's handling of it.
Former MLB Commissioner Bud Selig earned in the range of $30 million a year, sources said, not much more than some top MLB stars. Ryan Howard and Cliff Lee, for example, were each guaranteed a league-high $25 million last year. In the NFL, Aaron Rodgers carries the biggest contract in league history, but that five-year, $110 million deal still averages out to $22 million annually.
Ross Tucker, a former NFL player who now writes about and comments on the sport, said, “People are not happy in life when anyone makes a lot of money. They are more inclined to look at it negatively.”
But the Occupy Wall Street explanation doesn’t cover everything. Walt Disney CEO Bob Iger earned $46 million last year; Les Moonves, the CEO of CBS, earned $62 million, according to their companies’ most recent proxy filings. Social media is not aflame with calls for their heads, even though the NFL does also position itself as a media brand.
“The NFL is the No. 1-rated program in America,” said sports compensation consultant Cathy Griffin, explaining her take on the scrutiny. “The public is overwhelmed with the issue.”
In other words, like anything to do with the NFL, Goodell’s pay is one more piece of grist.
To be sure, Goodell’s compensation does stand as a serious amount of money. When considering the 50 top companies in the country and their executives, Goodell ranks among the highest-compensated executives, said Steven Hall, who founded executive compensation advisory firm Steven Hall and Partners and has worked in the field 37 years.
“In looking at some work that we did related to the Fortune 50 companies, 11 earned over $22 million and the median was $13 million,” he said.
Hall pointed to the former CEO of Wal-Mart, the now-retired Michael Duke. At Wal-Mart, a $475 billion company, Hall earned $5.6 million in fiscal 2014 after earning $20.7 million the year before, according to the company’s proxy filed in April 2014. The NFL is an $11.5 billion-a-year business.
Of course, as Marc Ganis, a sports consultant with close ties to the NFL, points out, it is the owners’ money that’s being spent on the commissioner’s compensation. They are free to pay Goodell what they wish. So while the directors who set the Wal-Mart CEO’s pay have to answer to shareholders, in the case of the NFL, the directors and the shareholders are one and the same: the owners.
The league’s three-member compensation committee comprises Atlanta Falcons owner Arthur Blank, the committee chairman, New England Patriots owner Robert Kraft and Carolina Panthers owner Jerry Richardson. The trio typically meets during the league’s annual meetings in March to set Goodell’s bonus for the preceding season. The bonus is the majority of his pay.
For the most recent pay period, the $35 million compensation represents $4 million in salary and $31 million in bonus pay.
Another factor to consider when assessing the commissioner’s compensation, Hall said, is how irreplaceable the owners consider Goodell. While the commissioner’s critics might scoff at that thought, Goodell is viewed internally in a favorable light in that regard. He has spent more than three decades at the league and knows the ins and outs of the NFL like no outsider could.
The business metrics of the league also are stronger than ever, from a solid labor deal to high TV ratings. Of course, the league’s gains are notwithstanding the botched response to the Rice case and the season of criticism that defined the NFL’s last year.
“If the owners were happy paying him $200 million, it’s up to them,” Griffin said.
There is one way for the NFL to end the annual public discussion and scrutiny of the commissioner’s compensation: change the league’s tax status. The NFL’s tax return, which contains the compensation information, is public because the league’s headquarters is structured as a nonprofit trade group. As such, the disclosure is required by IRS rules. The league has considered changing that status, as MLB did successfully several years ago, but it has yet to make that move.
The NBA has never filed as a nonprofit and so has never had to disclose its commissioner’s pay.