Case Study #36: NFL’s Recent Policy Enforcement Yields Business Accountability Opportunities

Several external (recessions) and internal (resistance to change) forces inhibit brands from successfully executing innovative business strategies. This blog profiles brands that overcame those forces to competitively enter markets, profitably grow market share or mitigate deleterious impacts of brand dilution. But, what happens when brands operate under increased enforcement of an existing policy?

Last month, NFL Commissioner Roger Goodell fined three football players a total of $175,000 for illegal contact on the field. Goodell notified all 32 teams that increased discipline – including possible first-offense suspension – would be imposed on players that deliver illegal hits to the head or neck of an opposing player. The commissioner’s memo was accompanied by this video: http://cli.gs/N9qjSq

There was some heated debate about Goodell’s enforcement of existing contact policy, particularly from the NFL’s main stakeholders: its fans. A subset of these fans is the customer base: season ticket holders, corporate sponsors and national networks. These customers help sustain the NFL business model.

Did you know that 70% of each team’s revenue is shared equally among all teams (“The highly successful NFL business model, The Casual Truth, February 8, 2010)? This includes money from TV deals, sponsorships, ticket sales and merchandise. The NFL negotiates all of its television contracts as a single entity. Its latest contract, which will run until the end of 2011, will bring in $3.7 billion a year from several national networks (“In a league of its own”, The Economist, April 27, 2006).

In the current scenario where game officials are further empowered to police the field, the following “worst case” impacts may ensue:

1. Frequent interruption of play as game officials evaluate whether a hit is illegal or not
2. Viewership attrition of certain fan micro segments if they feel they won’t see “smash-mouthed, hard-nosed” football anymore
3. Reduction of advertising and sponsorship dollars because target audience and reach may decline
4. Less NFL revenue may affect future plans for construction and upgrades to stadiums
5. NFL may have difficulty negotiating potential demands from the player’s union

While I completely agree with Goodell’s enforcement of existing contact policy, the NFL still has a business to operate. To mitigate revenue attrition while upholding player safety, the NFL may consider these solutions:

1. Use the money collected from the fines to create a fund for the rehabilitation and recovery of young ex-athletes suffering from post career injuries
2. Align with network partners to nationally market and advertise this fund
3. Leverage advanced training technologies so players have the strength and ability to withstand collisions
4. Align with network partners to show transparency of what players do to meet the increased physical demands of the sport
5. Work with helmet and padding manufacturers to improve the quality, durability and reliability of the equipment
6. Align with network partners to demonstrate a commitment to safety that is associated with, but peripheral to policy mandates

Brands can still innovate in the face of policy enforcement. These policies need to be distilled and effectively communicated to ALL stakeholders to avoid discontinuity with current business success and positive brand perception.