NFL Commissioner Roger Goodell apparently thinks he should be paid twice as much as the chairman of Goldman Sachs. For what? What exactly does this NFL commissioner do, other than wrinkle the vast expanse of his forehead over the public relations disasters he creates, provoke fan rage, and refuse to fly commercial? If Cowboys owner Jerry Jones’ goal is to restore some fiscal sanity to his fellow owners, then well done. Someone has to try.
Goodell has made a bid to raise his salary to $49.5 million a year, according to ESPN, which would pay him more than the CEOs of IBM, Time Warner, Hewlett Packard, Disney, Nike, Oracle, Yahoo, and J.P. Morgan Chase, among others. That is indecent. It is crazy. And it is irresponsible. Small wonder Jones threatened to sue the compensation committee, and wants more transparency on Goodell's contract. While the owners fight among themselves, the rest of us can only sit around slack-jawed with wonder at their total loss of good sense, and perspective.
To restore that perspective: Goodell already makes $30 million, more than Steve Wynn, and the CEOs of AT&T, Microsoft, Exxon, Chevron, Johnson & Johnson, Aetna, and Dow Chemical. Again, for what?
The NFL is courting audience disaffection with oversaturation, the concussion crisis drags on, and the fan perception is that the league has dug too relentlessly into their pockets. But go ahead, gentlemen, give the commissioner a deal that appears to be written by Marie Antoinette, while quibbling over settlements for your players' head injuries.
Executive compensation is an emotionally charged subject: CEOs at the largest U.S. firms now make 271 times more than the average worker, according to the Economic Policy Institute, and 74 percent of Americans believe they are overpaid, a conviction that cuts across party affiliations. But at least the CEOs referenced above can be said to have created some value for their companies or shareholders. Bob Iger acquired Pixar, Marvel, and Lucasfilms for Disney, so the stomach doesn't rebel quite as much at his $41 million package.
It is a serious question whether Goodell, who has no accomplishments and presides over tanking TV ratings, has earned a pay cut or even firing, rather than a raise. Jones has every right to demand consideration of this question, even if it means infuriating some of his more complacent fellow owners by dragging the NFL's dealings into the light.
Jones is no different from any other upset major shareholder. Does anyone seriously believe Goodell should make anything close to what Bob freaking Iger makes? The only reason the NFL is even contemplating such a thing is slackness by the compensation committee members, who are so used to dealing in huge sums that they have forgotten what a sensible scale looks like - and have lost their ear for what is offensive. In addition to a raise, Goodell reportedly has asked for a private jet in perpetuity, and lifetime health insurance for himself and his entire family. This, in a league in which NFL players have health benefits for just five years, yet face lifetime neurological damage.
Goodell makes twice what Tom Brady makes. He makes 15 times more than the average NFL player. He makes more by several millions than the CEOs of Ford, Prudential, General Electric, Morgan Stanley and Goodyear. Again, for what? He's never taken a hit, or had an idea.
There is only one legitimate rationale for compensating an executive on this level: When he or she is a one-of-a-kind business talent, who spearheads strategic acquisitions and drives sales, and can demonstrate some connection to the value of the company. Goodell's hazy, vague role as NFL commissioner meets none of the criteria.
The mechanisms of the league's revenue are driven by the owners, the entrepreneurial dealmakers such as Jones and Bob Kraft. The NFL's revenue is around $13 billion, and the main portion of this is a gift from the titanic TV packages negotiated in 2004 and 2011 by the owners' broadcast committee, which was chaired by the Denver Broncos' Pat Bowlen. Now Bowlen was a unique talent and formidable dealmaker, as any TV exec who had to write the check will tell you. Ask the same execs what they think of Goodell. Ask Iger.
Goodell's contract is profoundly out of line with previous commissioners, who did far more for their money. Pete Rozelle was a superb promoter, but owners never let the financial relationship with him get this far out of whack. Rozelle presided over massive growth, and the advents of the Super Bowl and "Monday Night Football," for which at his peak in 1974 the owners rewarded him with a handsome $200,000 a year, the equivalent to $1 million in today's money. He never made more than the game's greatest stars, the Joe Namaths and O.J. Simpsons. Even Paul Tagliabue, under whom revenue grew to $6 billion in 2007, was paid just $10 million.
Jones recognizes all of this. His quarrel with the compensation committee and its chair Arthur Blank is based on a realization that they have slowly, unwittingly let the largesse and complacency of the past few years cloud their judgement. Jones represents a body of owners who have been growing uneasy for some time with Goodell's judgment and the bloat and dysfunction in the Park Avenue executive office. Those who think he is just throwing a tantrum over Ezekiel Elliot's suspension are wrong. Back in May, interestingly, he expressed concern about the league's committee-decisions.
"The committee system works; it's a good one," he told the Sports Business Journal. "But it should never supplant the individual owners being able to think it through and get it together." Important decisions should not be closely held by one "little group," he said.
For the first time since the early 1990s, the NFL's business is showing some underlying weakness. Owners therefore have every right to repent their commitment to extending Goodell's contract. They have every right to ask, is he really the leader you want confronting a new set of problems? Does he really deserve to make twice what the average America CEO makes? Does the league really want to so distend its compensation scale for any commissioner, much less this one?
Sensible corporate leaders understand that when CEO pay gets too high, it impacts operations and morale, distorts judgement, and actually undermines leadership. They understand that it breeds suspicion of poor or careless governance. This is Jones's concern, and it should be shared by every owner in the league.