Tackling NFL's issues

Monday, July 17, 2006

By VINNY DiTRANI

The mission for Paul Tagliabue's successor appears simple enough: Don't screw up things.

The NFL's next commissioner will inherit the most successful sports enterprise in history, one that has long enjoyed enormous growth and prosperity, not to mention labor peace. Looks like all Tagliabue needs to do is flick on the auto pilot switch before he leaves his office in August.

Under that sublime surface, however, is some churning areas of concern the next commish must address. Tagliabue will leave a generally tidy house. He's even tried to deal with some of the issues that might (and in one case, nearly did) provide future headaches.

Among those issues are revenue sharing, which almost ended the long labor peace this past winter; Los Angeles, without an NFL franchise since the Rams and Raiders bailed in 1994; involvement in the international community; and the league's involvement in its own media conglomerate, which includes a vehicle for someday bypassing traditional television arrangements.

Tagliabue recently predicted the sports world might change more in the next 15 years than it has in the past 50. And if you can remember the somewhat primitive nature of sports promotion and marketing in the mid-1950s, that is quite a statement.

Yet the NFL might take a step back instead of forward if the new man doesn't get the in-house act together. Revenue sharing long has been the staple of NFL economics, a route for small-market teams to compete with the large-market clubs. Monies from all television and league sponsorship deals, plus one-third of all ticket revenues, are shared evenly among the 32 teams.

But discrepancies in so-called "local" incomes such as stadium suites, radio and preseason TV rights, retail sales, parking and concessions fees and stadium naming rights have increased the gulf between the haves and have-nots. In 1995, the difference between the top and bottom clubs in revenues was a mere $28 million. Now the gap is five times that, around $140 million.

That's why NFL Players Association head Gene Upshaw insisted a revamped revenue-sharing plan be included in the recent extension of the Collective Bargaining Agreement. Right now plans call for the top 15 revenue-making teams to contribute $30 million apiece to the pool.

The outgoing commissioner has named eight team representatives to a committee to study economic factors for teams to qualify for additional revenues. While league executives have been told to refrain from discussing the matter, one said, "The idea is to be sure the extra money received is reinvested into the football program."

Tagliabue distributed the eight slots evenly among the four quadrants on the revenue-generating list: Houston and Cleveland from the top eight clubs, Green Bay and Seattle from the second tier, the Giants and Detroit from the third level and St. Louis and Buffalo from the bottom eight. The new commissioner must make sure the committee can solve what at the very least is an extremely complex problem.

Revenue sharing could impact the search to fill the Los Angeles market. Teams from the lower-tier markets, especially those without concrete plans for the instant elixir, a new stadium, should be jumping to fill the void. But estimates of up to $800 million in stadium costs to get the Coliseum or Angel Stadium of Anaheim ready for football re-habitation is a daunting figure.

With more expansion very unlikely, the Bills, Chargers, Jaguars and Vikings appear most likely to move to Los Angeles. The new commissioner must spearhead, or reject, a plan by Tagliabue that not one but two teams relocate to halve the stadium costs and return the NFL to the nation's second-largest television market.

Any future expansion might be limited to outside the U.S. if the NFL can create an international presence to tap the foreign financial pipelines. A regular-season game was played in Mexico City last year and there's talk of playing two games in Europe in 2007. Super Bowl XL was televised in 234 countries in 32 languages.

But can the NFL really sustain an international face?

Exhibition games have been successful, but are novelties. NFL Europe has been less than a rousing success, albeit with rosters minus any big-time players.

The new commissioner must weigh the positives of new revenue sources against the negatives of embarrassing failure, even if his findings are not what the new-breed, looking-for-new-revenue-stream owners want to hear.

NFL games attracted some 200 million viewers in 2005, with network games averaging 15.6 million per contest and cable games 8.7 million per viewing. Yet the NFL will not only change its network look this year, but also add another outlet, the NFL Network. While the home-owned franchise has enrolled some 35 million households in two years, it still is not available on most cable systems.

So its first "national" telecast, the Thanksgiving night clash between the Broncos and Chiefs, will be "national" only to those who get the NFL Network (and over-the-air viewers in Denver and Kansas City). The next commissioner must assure his games are made available to the general viewer, not used as a carrot to attract people to his own TV network.

The same is true for potential digital telecasts made available to cellphones or devices that haven't even been invented. Such advances cannot be made at the expense of the longtime NFL stalwarts who like to flop in front of a TV with a beer and a bag of chips to watch their favorite teams.

Tagliabue's successor is walking into a nice gig, but it's a gig that could change drastically in the next few years. Continued success may well depend on how the new Tags handles the standing problems such as revenue sharing and absence from the L.A. market, as well as future endeavors such as international expansion and impending communication evolutions.

E-mail: ditrani@northjersey.com

Copyright © 2006 North Jersey Media Group Inc.

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