NFL Offseason Is in Business: 10 Storylines to Watch
Writing to you from the Philadelphia region and having been a consultant for the Eagles, I admit to some bias in my columns in my riding with the Eagles all season, including their post-Wentz playoff run. Bias or not, it was clear to me early on that this team was as complete as any in the NFL. They had dominating offensive and defensive lines, a perfect mix of veterans and ascending young players, and creative and aggressive coaching. The “team” concept can sound like a cliché, but with this group it was real. On the biggest stage, Tom Brady was Tom Brady. However, this is not tennis or golf, and Brady doesn’t play defense. The Eagles were, to me, the best team in football from September through February, and football is the ultimate team sport. Kudos to old friends Howie Roseman and Doug Pederson, who I wrote about two weeks ago.
NFL fans now face the sobering reality of not seeing another meaningful snap for seven months. The sport with the longest offseason now officially enters that realm, and—as it was for me as an agent and a team executive—it is the busy time of year as a media analyst on the business side of the game. But fear not my loyal readers, I will get you through the long and cold NFL offseason, starting here with the Top 10 business of football issues ahead for 2018:
1. Ratings down, rights fees up. NFL ratings were down in 2016, were down in 2017 and may well be down again in 2018. My response is: So what? In the midst of this ratings decline and the narrative surrounding it, Fox purchased rights to Thursday Night Football, a property some said would be going away, for five years to the tune of $3.3 billion. This represents a $200 million a year increase from what was paid by CBS/NBC combined this past season (up to $660 million a year from $450 million a year). And expect additional revenue for TNF through an OTT (over the top) partner, perhaps a new one following a year each from Twitter and Amazon. My sense is that we will continue to see this lack of correlation between ratings and future media contract increases. Ratings may not be completely meaningless, but they have little to no correlation to future rights deals. The NFL is clearly the most valuable programming a network can buy, whether over the air or digital. These increasing rights fees in the face of a ratings decline represent more tough news for the “NFL is in trouble” crowd.
• WHAT THURSDAY NIGHT FOOTBALL ON FOX MEANS FOR VIEWERS: Richard Deitsch on the new TNF deal.
2. Millennial Nation. Although I don’t believe the “ratings problem” is a threat to the continued prosperity and popularity of the league, I do believe the biggest challenge for the NFL (and all sports properties) is this: How to attract and maintain younger viewers. Roger Goodell recognized this in his State of the NFL address last week in acknowledging the frustration of so many game stoppages interrupting the flow of the game. While the NFL started to address this issue this past season with changes such as eliminating timeouts after kickoffs, using some split screen advertising, etc., it needs to do more. Younger consumers (and even older ones) will not continue to invest three hours of their time for 11 minutes of game action. I continue to believe the NFL product will be closer to two hours than three hours within the next five years. Consumers will demand it.
• CORD CUTTERS, RED-ZONERS AND PROTESTERS: The reasons behind the NFL’s falling ratings.
3. Activism will continue, but will protests? The NFL dearly hopes that the biggest story from its 2017 season will become a footnote in 2018. The league has admirably listened to players and solidified a partnership to invest in social causes in coming years. However, there was no quid pro quo in the deal to require players to stand for the national anthem and the league’s rule only “encouraging,” not requiring, players to stand is still in place. Further, there is a faction of players in the “Kaepernick camp”—a group at odds with the Players Coalition, which made the deal with the NFL—that will still protest. And, of course, there is still an unsigned Kaepernick pursuing a collusion suit against the league. Ultimately, the best remedy for the NFL to have this issue “go away” would be to sign Kaepernick, although no owner seems willing to take this step.
4. Carolina on my mind. The first sale of an NFL franchise since 2014 is proceeding, hastened by Panthers owner Jerry Richardson’s personal misbehavior. Richardson’s surrender of the team will be quite profitable; he’ll likely receive over 10 times the price ($206 million) of what he bought the team for in 1993. With investment bank Allen & Co. and law firm Proskaur Rose LLP handling the sale, the vetting process will be especially thorough for the new owner. We can conservatively expect a new owner in place by the start of the 2018 season. As to price, scarcity creates value; NFL franchises so rarely come up for sale and there is no shortage of billionaires showing interest. My prediction: between $2.3-$2.5 billion.
5. Kissing Cousins. The first shoe has dropped on the veteran quarterback carousel, with the Chiefs trading Alex Smith to Washington. They obviously feel Smith is an upgrade over Kirk Cousins, who they “dated” only to now leave him to marry an older and—to them—more attractive player. As to the rumor that the Redskins could still apply the Franchise Tag on Cousins to try to extract trade compensation: Good luck with that. They would not only carry a $34 million cap charge for Cousins—in addition to a big number for Smith—but also draw a certain grievance from Cousins and the NFLPA. The bargaining history of the Franchise Tag requires the tagging team to have intent to sign, not trade, the player. A Tag would certainly have a chilling effect on Cousins’ marketplace, his first freedom in six years to contract with any other team. The story is a nonstarter.
6. Quarterback Musical Chairs. I do not necessarily agree that veteran quarterbacks like Cousins will sign mega-contracts in free agency, as supply may outstrip demand. Sure, looking at their résumés in a vacuum, it seems like players such as Cousins, Case Keenum, Sam Bradford, and yes, Colin Kaepernick would present teams like Cleveland, Denver, Arizona and the Jets better options than rookies, but what if those teams decide to invest the precious currency of a first-round draft pick in a quarterback (or trade for someone like Nick Foles, where I think it will take a second-round pick to pry him away)? Examples like the Bears’ situation last year, or the Eagles’ situation in 2016, where they invested heavily in a veteran (Mike Glennon and Sam Bradford, respectively) before drafting their future quarterback (Mitchell Trubisky and Carson Wentz) may give caution to some quarterback-needy teams.
7. Free agency 2018. I think NFL free agency in 2018 will look like free agency in recent years: strong contracts for 10-15 golden ticket winners—this year’s crop may include Jarvis Landry, Jimmy Graham, Nate Solder, Allen Robinson and others—in the first 24-48 hours, followed by a game of musical chairs for players before there are no more seats. Perhaps due to the recently added legal tampering period and the lack of visit-taking by free agents (that is sooo 2014), things are moving more quickly than ever. The problem for top NFL players is not the size of the deals; it is the security of the deals. And that will be proven once again in the weeks prior to free agency opening on March 14, as hundreds of millions in potential contract value will be flushed away via the waiver wire, with the numbers on the contract turning to dust.
8. Concussion conundrum. Credit needs to be given where credit is due; the NFL has been on a positive trajectory with player safety for years. However, hiccups involving players such as Cam Newton, Russell Wilson and Tom Savage—each appeared to return to play in a compromised state—continue to plague the league. Here is the problem for the NFL: Truly prioritizing player safety would require removing stars from games. This is the conundrum around player safety, juxtaposed against the NFL presenting its more marketable product. And we, the viewing public, are part of the problem. We bemoan players “playing through” concussions yet don’t want our favorite team’s quarterback missing crunch time after getting “dinged.” The safest concussion policy, which doesn’t seem to be the standard, is simply this: If there is any question whether a player should return to play, he shouldn’t. 2018 should be a watershed year for concussion management with advances made in recent years.
9. What’s a Catch? This question has confounded officials, fans, media, team and league officials and even Goodell. Clearly, it is time to rewrite the rule in a way that errs on the side of more, not fewer, “catches.” Goodell has charged the Competition Committee to “fix this” in its annual March meeting before it presents the “answer” to the full ownership the following week. Virtually any change will be well received, as it will certainly draw less chaos than the present rule, which has been bad for business. Usually, issues that come up during season do not draw much attention in the offseason when the emotions of the moment have passed, but this is one that continues to linger. We will know what a catch is (I think) by April.
10. Legalized gambling? Bet on it. We are at a moment in time for sports betting, and the NFL has been giving mixed messages in opposing gambling yet embracing fantasy, allowing team sponsorship deals with casinos and, of course, relocating the Raiders to Las Vegas. In my opinion, after sitting in the courtroom hearing the arguments, the United States Supreme Court will legalize sport betting either in New Jersey and/or beyond and the NFL must be poised to regulate it and, more importantly, monetize it. I have long suggested the league hire a “Chief Gambling Officer,” much in the way it has a Chief Marketing Officer and Chief Medical Officer, to oversee this important area. And although the NFL will not admit it, it will welcome legalized gambling on its product, knowing what a valuable fan engagement tool it has become.
The business of the NFL is the NFL, never more than the six months ahead with no games on the calendar. Settle in, I’ll guide you through it.
• Question or comment? Email us at talkback@themmqb.com.
