Friday, September 01, 2006

The best there ever was – Paul Tagliabue

Thursday was Paul Tagliabue’s last day as National Football League commissioner. Roger Goodell takes over as commissioner today. If Goodell manages to leave the National Football League in the same shape Tagliabue has left the league in, Roger Goodell will have done an excellent job. In his 17-years at the helm of the NFL, Tagliabue took a business that was running on all cylinders under Pete Rozelle’s leadership, to a business that annually generates $6 billion, an example the entire sports industry should stand and applaud.

Tagliabue replaced Rozelle on October 26, 1989. Tagliabue’s hiring is an often told tale. It took 11 ballots, three ownership meetings in three different cities, and a New York based executive-search firm before the NFL made the best decision the league ever made. Tagliabue was elected on the eleventh and final ballot. The NFL’s old guard were steadfast in supporting Jim Finks, then the vice president and general manager of the New Orleans Saints. The new guard believed Tagliabue was the man to lead the NFL into the 21st century.

''I've had the luxury and benefit of working with Pete Rozelle for 20 years,'' Tagliabue said at a news conference after arriving that fateful afternoon from Washington. ''He's the goal standard for all founders and leaders to come. I hope to have Jim Finks working with me. He called and told me he would be supporting me 100 percent. I told him I wouldn't let him off so easily.''

''I have worked with all of the league and feel no favoritism,'' Tagliabue said. ''I hope now that we can talk about the games and competition instead of the old guard and the new guard. I hope we talk about right guards and left guards rather than that.''

Norman Braman of the Eagles and Victor Kiam (the guy who liked the razor so much he bought the company and then the New England Patriots) played key roles in getting Tagliabue elected. Tagliabue and the two owners shared a number of principals and directions they believed the NFL had to go in 17 years ago.

''I've spoken with Norman already,'' Tagliabue said. ''He wants to get together about the promotion of N.F.L. Properties and the international spring league.''

As Tagliabue exits the National Football League, the NFL as a sports property has become a global brand. The league played a regular season game in Mexico City last year, has plans to play a regular season game in London and next year will send the Patriots and the Seattle Seahawks to Beijing. And NFL Properties now generates more then $1 billon annually.

To those who worked with Rozelle on a day-to-day basis in the 1980’s the only choice the league could have made on October 26, 1989 was Tagliabue.

''In that time,'' Don Weiss, then the N.F.L.'s executive director told The New York Times, ''we have hardly taken any legal step without talking to Tag about it. Not just antitrust cases, but television, expansion, legislation, franchise moves, labor-management, the international spring league. He has a tremendous grasp of what the N.F.L. is. He thinks 'league.' He understands that the 'league' is greater than any one of the 28 franchises. And in discussing a legal case, his first reaction is not whether it's defensible, it's whether it's right and reasonable.''

Fourteen months into his term as commissioner Tagliabue as he would be forced to deal with in the terrible aftermath of The Gulf War, Tagliabue had to consider how the NFL would react to ‘events beyond the scope of football'; Operation Desert Storm. Days after the first President Bush sent Americans into battle, the NFC and AFC championship games where scheduled for Candlestick Park in San Francisco and Rich Stadium in Orchard Park, N.Y. The following Sunday, the Super Bowl, was scheduled to be played before 75,000 fans in Tampa Stadium.

As he told The New York Times’ Ira Berkow, there was no doubt whatsoever in his thought process as to what the NFL would do.

"We can't be paralyzed as a nation," Tagliabue said, "and can't act out of fear. We have to maintain appropriate respect for the situation, and keep appropriate proportion. So we've decided to play the games, but we're going to follow events right up until the kickoffs. There could be a change at any moment."

A month later, Tagliabue started setting the table for the dramatic moves forward the league has made in increasing their television rights fees. The NFL was in the final year of the league's four-year, $3.6 billion contract with five networks: the Big 3 of ABC, CBS and NBC, and the cable networks ESPN and TNT. The vision Tagliabue had was to develop the NFL as a sports property capable of moving beyond the barriers of offering their games on over-the-air carriers in each NFL market.

"We're thinking of something like a season's-ticket concept," said Tagliabue. "Maybe take an attractive game at the end of September, October, November, and December, a four-game package. You get the fans' attention by putting it on a regular basis, just like you do with 'Monday Night Football.' "

Tagliabue’s idea would be the birth of DirecTV’s NFL Sunday Ticket. Major League Baseball, the National Hockey League, the NCAA for both men’s football and basketball each now offer and generate tremendous sources of revenue from a concept first thought of by Paul Tagliabue. The league would wait a few years before moving forward with a ‘season-ticket package’ but it was the NFL who created the opportunity.

The next landmark date during Paul Tagliabue’s tenure took place on January 6, 1993. It took nearly two years, but Tagliabue led the NFL to the finish line with a new collective bargaining agreement with the NFL Players Association. Tagliabue had been beside Rozelle when NFL players went on strike early in the 1987 season leading the owners to use replacement players. Years of litigation followed. Tagliabue was determined to find a solution that didn’t include litigation, a strike, or replacement players.
The key to the NFL’s 1993 CBA, changing the rules of free agency, allowing each team to designate only one player as their franchise player. Every other player could become a free agent once their contract had been completed. The essence of the 1993 CBA remains a key component to the CBA the NFLPA and the league agreed to in March.

Labor peace allowed Tagliabue’s vision of a bigger National Football League to move forward. The league expanded to Charlotte and Jacksonville in 1995 ($140 million for each franchise). The NFL also expanded into Houston ($700 million in 2002) and Cleveland ($540 million in 1999). The four expansion franchises have generated $1.54 billion in expansion fees for NFL owners.

Six years after being hired as the NFL’s seventh commissioner the challenges Tagliabue was facing must have seemed like they were everywhere. First the Rams left Los Angeles for St. Louis and then the Raiders returned to Oakland from Los Angeles. Dallas Cowboys owner Jerry Jones was battling the NFL over local sponsorship rights. Jones believed he could circumvent NFL mandated sponsorships if it benefited the Cowboys.

"Houston talked a few years ago about going to Jacksonville," Tagliabue told The New York Times on November 17, 1995 in a wide-ranging interview at the league's Park Avenue headquarters. "Houston has had a stadium problem for a number of years. Over all you have to keep some perspective on these things. We had similar stadium issues in the 80's. We had those three moves in the 80's. Go back to the 70's, people thought there was 'turmoil.' You had the Giants going to the Yale Bowl. That wasn't exactly regarded as normal times.

"What we're dealing with is the normal process of growth and the fruits of success, frankly."

If you really want to appreciate what makes a great leader you need to look no further then look no further then Tagliabue allowing franchises to move. Tagliabue believed that ship had sailed in 1982 when Al Davis successfully sued the NFL for the right to move the Raiders to Los Angeles from Oakland. Bud Adams moved the Oilers to Nashville and Art Modell moved the Browns to Baltimore. In both cases under Tagliabue’s leadership Houston and Cleveland returned to the league with new owners and stadiums.

Jerry Jones filed a $750 million lawsuit against the NFL in 1995 citing his belief that each NFL franchise had the right to negotiate their own sponsorship agreements.

"Jerry's views aggravate the problem and don't help solve the problem because there are two underlying realities about a sports league that you have to recognize to be successful," Tagliabue said. "You have to operate in markets of different sizes. And No. 2, winning and losing is cyclical. And by definition you're always going to have losing teams in a sports league. You have to sustain your stability in individual markets even when you are losing."

"When you say Jerry wants to dismantle Properties, it is a disservice to Jerry," Tagliabue said.

"Jerry wants to build something new, which is what we have been doing here."

The NFL filed a $300 countersuit against the Cowboys. On December 13m 1996 the NFL and Jones agreed to drop their respective lawsuits.

Jones expressed satisfaction with the settlement, but said of the league when the ‘settlement’ was announced, ''In general, we're still not on the same page.'' There are issues left to resolve, he said, ''kind of states' rights versus the central government.''

It was Pete Rozelle who convinced NFL owners in 1963 for the good of the league the league’s television rights should be sold nationally with each franchise sharing in the revenues equally. The 32 NFL franchises will each receive $106 million annually for the league’s current TV agreement. This chart shows the incredible increase in NFL television rights:

AFC Package
NFC Package
Monday Night Football
Sunday Night Football
Total Amount
$420 million/yr
ESPN (2nd half)
$473 million/yr
TNT (1st half)ESPN (2nd half)
$900 million/yr
FOX ($395 million/yr)
TNT (1st half)ESPN (2nd half)
$1.1 billion/yr
CBS ($500 million/yr)
FOX ($550 million/yr)
ABC ($550 million/yr)
ESPN ($600 million/yr)
$2.2 billion/yr
CBS ($622.5 million/yr)
FOX ($712.5 million/yr)
ESPN ($1.1 billion/yr)
NBC ($650 million/yr)
$3.1 billion/yr

This does not include the DirecTV package that brings the total to $3.6 billion per year.

September 11, 2001 a date will remain etched in the consensus of everyone who was alive that terrible day. Two days later, Tagliabue made the only decision he could concerning the NFL games scheduled for Sunday, September 16, 2001, the second Sunday of the regular season – Tagliabue postponed the 15 scheduled games.

''We wanted to be sensitive, certain, and right,'' a tired Tagliabue said in a conference call with the news media, ''and certainly not superficial.''

He added: ''At a certain point playing our games can contribute to the healing process. Just not at this time.''

Five hours after Tagliabue announced he was postponing the NFL’s slate of games, Major League Baseball announced they would follow the NFL’s lead and postpone their games for the entire week. All Division I-A college football conferences -- some of which earlier had said they would play that week -- called off their weekend games. NASCAR called off it's Winston Cup race in New Hampshire this weekend. In each and every case, it was leadership by example; the sports industry followed the decision Paul Tagliabue believed was in the best interest of the National Football League.

''This was our commissioner's finest hour,'' said Baltimore Ravens owner Art Modell to the New York Times. ''He did the right thing. I wanted our league to take the initiative, to be the pace-setter by making the correct decision quickly and decisively. Paul did just that.''

Paul Tagliabue had many fine hours during a remarkable professional career. He never played competitive football; he was a ‘decent’ basketball player at Georgetown. His legacy ensures the future of the NFL’s next generation. Tagliabue’s final day as NFL commissioner included a meeting where he thanked his staff and signed footballs for his staff.

Last week in his last major media conference the passion Paul Tagliabue had for the NFL, how protective Paul Tagliabue was of the NFL was evident in his reaction to the distasteful remarks HBO’s Bryant Gumbel directed at NFLPA executive director Gene Upshaw.

"Having looked at how other people have had buyer's remorse when they took positions, I guess they suggest to me that maybe he's having buyer's remorse and they call into question his desire to do the job and to do it in a way that we in the NFL would expect it to be done," the commissioner said.

Late Thursday night, Forbes Magazine released their 2006 Business of Football Report adding this note to Tagliabue’s legacy: This year the average NFL team is worth $898 million, 212% more than when Forbes began calculating team values eight years ago. Look at it this way: Football team values have increased 11 times more than the S&P 500 since 1998. Profitability? In 2005, the average NFL team posted $30.8 million in operating income (earnings before interest, taxes, depreciation and amortization), versus $5.3 million in 1997.

Here’s to the winner, a salute to the single greatest leader in the history of the sports industry, a man among men – Paul Tagliabue, the best there will ever be.

For Sports Business News this is Howard Bloom. Sources cited in this Insider Report: The New York Times and Forbes Magazine