Looking back on a busy 2013 in the business of football, we have long since crossed the Rubicon: The business of the NFL is the NFL. Teams are billion dollar assets; the games are merely the storefronts to the greater business.
With that, here are, in no specific order, the 10 biggest stories in the business of the NFL in 2013.
What I considered to be the biggest threat to the NFL’s continued prosperity—concussion litigation brought by thousands of former players against the league – has now been removed, at least for the moment. This surprise development this summer will allow for future franchise valuations to be unencumbered by this potential exposure and continue to skyrocket.
After a summer of court-ordered mediation, a global settlement was reached for $765 million to cover compensation, research and medical monitoring. The settlement awaits final approval from Judge Brody, now being advised by a Special Master on its financial complexities, among them whether the amounts are sufficient to cover decades of potential claimants. I would expect approval sometime next year.
Many have questioned the settlement amount, one that has each owner paying a relatively nominal $24 million over a 20-year period, much of it covered by insurers. The reality is that the former players, facing years of litigation and uncomfortable depositions about the cause of their cognitive decline, decided to take what they could get short term. Once the decision to settle was made, it became a negotiation and, as we know, NFL owners excel in that arena. A requested number in the billions was negotiated down to $765 million.
The NFL has admirably continued its vigilance on head and neck safety beyond the litigation. Time will tell, however, if this care and attention will continue once this settlement is long in the rear view mirror.
Quarterback megadeals and no deals
2013 ushered in a new era of elite contracts for upper-echelon NFL quarterbacks. The list of transactions began with a highly leveraged deal for Super Bowl MVP Joe Flacco, followed by similarly valued extensions for Tony Romo, Aaron Rodgers and Matt Ryan, all ranging from $18-20 million per year with $52-$59 million guaranteed.
In another curious move, Matthew Stafford, with two years still remaining on his bloated rookie contract, leveraged another $43 million in guaranteed money from the Lions. By the time Stafford is 29, his guaranteed earnings will total $94 million. Stafford—yes, Stafford—is on his way to having one of the highest gross earnings in NFL history.
With all of this money spent on quarterbacks, Jay Cutler watches and waits. The Bears deferred a decision on Cutler, who becomes the most intriguing negotiation, or non-negotiation, of 2014. Cutler will either be (1) allowed to enter a free-agent market where he will have multiple suitors, despite his flaws, (2) signed to a long-term contract, after haggling about the comparable contracts above, or (3) given the one-year Franchise Tag, taking him off the market for a $16 million one-year holding pattern. My sense is he will be given the Tag, with the Bears leveraging that lack of security to their advantage in securing a longer deal to their liking.
Locker room antics gone awry
Jonathan Martin’s emotionally charged escape from the Dolphins locker room set off a series of events that—as the Saints bounty story and concussion chronicles—exposed the seamy underbelly of the NFL.
Richie Incognito’s vile comments and racial invectives spurred national conversation about blurred lines between hazing and bullying. The NFL appointed respected attorney Ted Wells to lead an investigation which will certainly peel back further layers of the testosterone-filled culture of an NFL locker room. Expect the NFL to issue new rules of workplace safety and respect for peers, not only for the Dolphins but the entire league.
Meanwhile, both Martin and Incognito were being paid to stay away; in my view, an expensive but smart decision by the Dolphins.
When in management with the Packers I received a lot of strange calls during the long offseason, but they now seem quite benign compared to the one the Patriots received this past summer: One of their players, Aaron Hernandez, was being charged with murder.
The Patriots moved quickly to release Hernandez—the financial consequences were secondary—and scrubbed any mention of him from their website, as if he was never there. Robert Kraft and Bill Belichick tried to move on from the matter as seamlessly as possible, but the stain lingers as Hernandez sits in a jail a couple miles away from the Patriots facility.
Hernandez’s four-year contract was torn up halfway through and replaced with a new one including a $12.5 million bonus, resources that could have been used on others such as Wes Welker.
Incoming Jets general manager John Idzik moved quickly to remove Darrelle Revis and his annual distraction of discontent, securing a first-round pick from Tampa Bay, the only true suitor for Revis.
As part of the trade Revis received a new contract with the Buccaneers with a striking $16 million average per year, zooming past the established top market for cornerbacks. However, the deal contains no guaranteed money; Revis and his agents clearly prioritized getting the highest annual average they could and traded security to do so.
This sets up an interesting future for Revis in Tampa. Will he revert to form and eventually express dissatisfaction with lack of guarantees, even as the highest paid cornerback in football? Will the Buccaneers, with no remaining financial obligation if they were to release Revis, look for a cheaper replacement in the latter part of the contract? This may not end well.
Freeman a free man
Speaking of the Buccaneers, it is always big news when a team demotes its starting quarterback. It is even bigger news when it releases him.
Josh Freeman had started for the Bucs since arriving as a first-round pick in 2009, yet entered this contract year with no negotiations towards a new one. Freeman was benched early in the season, and the finger-pointing began.
Freeman’s camp spoke of a culture of mistrust and over-the-top discipline from coach Greg Schiano, while the team felt Freeman was disengaged and lacked work ethic. The team eventually released Freeman after an unsuccessful attempt at a trade.
Freeman signed for $2 million with the Vikings, appearing in one game where he was woefully unprepared. He also receives his full $8.43 million from Tampa Bay as a vested veteran due termination pay. Not a bad financial reward for a forgetful season. And Freeman may yet draw interest as a free agent in 2014 with so many teams desperate for quarterbacks with any proven experience.
(Lots of) Green and Gold
The Packers’ financial report has long been fodder for debate as to the economic health of the NFL and its teams. During the 2011 CBA negotiations, the NFL owners’ narrative of declining profitability with player costs outpacing team revenues pointed to the Packers’ decreased profit number of $9 million. That has changed.
The 2013 numbers are striking. The Packers cleared a profit of an eye-popping $54.3 million, up 26% from the previous record number from 2012, $42.7 million. While the Packers’ report in 2014 will account for the large extensions in 2013 for Aaron Rodgers and Clay Matthews, the trends are pointing north for team profitability. The Packers’ record profits are another sign of the fact that these are “green and gold” days for NFL owners. Speaking of which…
While the owners’ profit increases, the players are finding contract roadblocks both on the way into the NFL and on the way out.
On the entry side, the drastic reduction at the top of the draft was expected, a clear CBA directive from the owners. However, the rookie clawback continues, mandating (1) all drafted players to sign four-year contracts, essentially eliminating the category of restricted free agents (three-year players with expiring contracts); and (2) there is no opportunity to renegotiate until after a player’s third season, giving teams a convenient excuse to keep players at fixed low figures.
On the exit side, older and accomplished veterans now reluctantly accept short contracts far below what they were used to making. Players recently among the highest-paid at their position—Dwight Freeney, John Abraham, Charles Woodson among them—took modest deals in a soft market, and some—Brian Urlacher, Richard Seymour, Nnamdi Asomugha—left the game entirely rather than play for unfamiliarly low wages.
There were a few “winners” this year in the contract area—Mike Wallace, Percy Harvin, Paul Kruger and Desmond Bryant among them—but the free agent spending spree seems to become shorter with fewer teams participating every year. It is a legitimate question to ask where the money saved on rookies is being allocated, if not to owners’ pockets.
Bring back the replacements
A year after a contentious CBA negotiation and the use of replacement referees during a lockout, the officials (unfortunately) continue to be part of the story of the NFL. Despite—or perhaps because of—the exacting standards detailed by Peter King in this series, there have been high-profile game-affecting or even game-changing errors every week.
From the NFL’s perspective, the goal of last year’s CBA negotiations was to bring more accountability and less entitlement to a group thought to have become too much a part of the game. The NFL sought to hire full-time officials and build a “bench” of referees ready to replace underperforming ones.
While there is only one full-time official at this point, Carl Johnson, the NFL clearly intends to hire more. And there are now 40 “backup” officials, 21 of whom worked in training camps and preseason games.
In evaluating the NFL’s aggressive approach toward the officials, early returns are underwhelming. However, we are only one year into an eight-year deal, and there are growing pains with any change. The quality (and quantity) of NFL referees is a continuing story to watch.
To play or not to play
This year’s rash of injuries has spawned various theories, including a popular one concerning the CBA-mandated reduced offseason and practice time. My sense is that the number of players getting injured overall is similar to any other year but is receiving more attention due to the prominence of the players going down—Aaron Rodgers, Julio Jones, Jay Cutler, Rob Gronkowski, etc.
As to Rodgers, I am uniquely familiar with the Packers’ medical treatment, having been part of those meetings for nine years. Dr. Pat McKenzie, who I admit is a friend, treats Packer players as he treats all his “civilian” patients and approached Aaron’s collarbone injury with the future, not the present, in mind. That approach was frustrating to many outside and inside the organization, but it is simply protecting players from themselves.
It is not uncommon for team doctors to prioritize long term over short term as the Packers; it is less common for teams to empower team doctors to override football decisions. We saw short-term priorities rule in Washington with Robert Griffin III last year; clearly a reason for 2013’s late-season course correction of sitting a healthy Griffin with an eye towards the future.
The inner workings of team decision-making regarding franchise-defining players were on display in 2013.
Other “honorable mention” business of football stories include: the NFL’s increasing presence in London (and lack of presence in Los Angeles); teams’ continuing efforts to improve the game-day experience as at-home options become more advanced; exploratory talks with Google and Netflix about future partnerships, and, of course, the three-year saga of NFL-NFLPA haggling over HGH testing in the NFL.
One thing is always clear in the NFL: We are never lacking for items to discuss behind the game.
Happy New Year to all; looking forward to providing my insights in 2014!