USA TODAY International Edition
Bigger NFL problem may be owners
Spa case latest in string of overlords’ troubles
PHOENIX – The billionaire overlords of the NFL arrived by plane and luxury car this week to gather at a posh landmark resort that's hosted 13 U.S. presidents as guests since 1932.
This was their big annual meeting, a summit for team owners and league executives, all of them well fortified against security risks, including bomb-sniffing dogs to patrol the ground around them.
But it was a bit of an awkward moment. One of their most influential members — Patriots owner Robert Kraft — is facing charges of solicitation of prostitution at a spa in Florida, the latest in a string of legal troubles for NFL owners.
“When we get all the information, we'll make determinations,” NFL Commissioner Roger Goodell said Tuesday
at the Arizona Biltmore when asked about the latest case.
Since 2013, NFL owners have been busted for sexual harassment, driving while intoxicated, civil fraud and a tax avoidance scheme. Another owner, Jimmy Haslam of Cleveland, didn’t face charges but served as chief executive of a truck stop company that ripped off customers in a massive fraud case.
In recent years, Goodell and the owners who employ him also have careened from one public relations crisis to the next — over their management of player concussions, their historically lenient treatment of domestic violence and then the cultural storm against players who knelt in protest during the national anthem.
Fortunately for them, they have a product that Americans can’t seem to get enough of, the richest and mostwatched sports league in the country. The NFL continues to thrive despite being run by owners who often are perceived as out of touch and might be the league’s biggest problem. They might even be holding it back.
“Once they became an owner, they instantly become a celebrity and enter into one of the most exclusive clubs in our entire country,” said Solomon Wilcots, a former NFL player and current analyst for Sky Sports in the United Kingdom and Sirius XM NFL Radio. “It has governmental protection (with an antitrust exemption) and can play by different rules that other companies don’t get to play by.”
To gain more context on this exclusive club, USA TODAY looked at how and when owners acquired their teams, how old they are and compared it to owners in the NBA, which is popularly perceived as more nimble, playerfriendly and in step with the times. The contrast is stark.
❚ The NFL is largely a family legacy business. Of the 32 teams, 17 essentially were acquired from family by birthright or marriage instead of being purchased by an entrepreneur from another industry. At least seven additional owners appear poised to hand off future ownership to family members, including the Patriots and Cowboys. In the NBA, only seven of 30 governing owners inherited their teams.
❚ The NFL doesn’t have as much new blood in its ownership ranks. Only 10 teams were sold to new controlling owners since 2000, compared with 19 in the NBA.
❚ NFL ownership also skews older. The average age of the controlling owner is about 68, versus 63 in the NBA. Both leagues have predominantly white, male controlling ownership overseeing mostly black players. So what does that all mean?
It’s debatable. The NFL raked in about $15 billion last year, far more than other leagues. It also doesn’t explain any individual owner’s personal indiscretions.
On the other hand, this context might help explain the cultural underpinnings of a league that sometimes has seemed flat-footed and entitled in an era of fast-moving changes in media, entertainment and society.
“The NFL is an aircraft carrier, and the NBA is the greatest luxury yacht you’ll find out there,” NFL owner consultant Marc Ganis told USA TODAY. “It’s a lot easier to turn around a luxury yacht than it is an aircraft carrier. It’s a lot easier for them to do things.”
Lords of their realm
NFL owners have acquired an almost royal image in American sports, largely because of their wealth and power. On TV, they appear as benevolent patriarchs looking down upon their gladiators from virtual thrones inside stadium suites.
This brand is carefully polished until it cracks under the weight of legal trouble.
❚ In 2013, a judge in New Jersey ruled Vikings owner Zygi Wilf and family members had committed civil fraud against their business partners and violated civil racketeering laws, resulting in a judgment against them of $103 million. That amount was reduced on appeal last year to $32 million. The Wilfs’ attorney, Peter Harvey, told USA TODAY that the appellate court vacated punitive damages and sent the case back to trial court and a new judge.
❚ In 2014, the NFL issued a six-game suspension to Colts owner Jim Irsay after he pleaded guilty to driving while intoxicated.
❚ Last year, the NFL fined Panthers owner Jerry Richardson $2.75 million after an investigation substantiated claims that he sexually harassed employees. He ended up selling the team.
❚ The Internal Revenue Service also found Dolphins owner Stephen Ross and Jets owner Woody Johnson had taken part in separate tax avoidance schemes. A U.S. tax judge in 2017 ruled against Ross and his partners, disallowing a $33 million write-off that the judge determined was worth only $3.4 million. In 2006, Johnson told a Senate subcommittee that his advisers told him that his transaction was legal. He said he settled with the IRS after the IRS made an offer to taxpayers in potentially abusive tax shelters that their penalties would be waived if they disclosed their involvement and paid up. Johnson said he didn’t have “any personal knowledge about the particular steps or details of the transaction.”
❚ Kraft, 77, has pleaded not guilty to two misdemeanor counts after authorities in Florida said they caught him on video soliciting sexual services at a spa that was being investigated for suspected human trafficking.
Several owners declined to comment when approached this week, preferring to get back to other league business behind guarded doors.
In other businesses, such a tally of troubles might damage the company’s moral authority or brand. Not necessarily in the NFL.
“They don’t have any moral authority,” Wilcots said.
The reason for this, he said, is that the owners employ Goodell to take bullets for them instead and often stay out of the limelight until one of them takes the stage after a Super Bowl victory. This week, after another Super Bowl win in February, Kraft isn’t talking like he usually is at the annual meeting and has avoided the news media.
“When it’s a tough time, they send (Goodell) out,” Wilcots told USA TODAY. “When it’s time to collect the trophy, they come out. Think about it.”
Sometimes they’ve gotten in their own way anyway.
‘King-like prestige’
Unlike some owners, former 49ers Super Bowl quarterback Colin Kaepernick hasn’t been under suspicion for crimes or civil fraud. He just wasn’t given the chance to play in the NFL again after he knelt during the national anthem in 2016 to protest social injustice.
Although many celebrated it as an act of courage, the protest also alienated a big part of the fan base, riled up President Donald Trump and violated perhaps the biggest code in the league: Thou shalt not put league revenue at risk.
The NFL struggled with how to handle the larger issue. At one point, Texans owner Robert McNair said “we can’t have inmates running the prison,” infuriating NFL players. McNair apologized at first, then walked back his apology, telling The Wall Street Journal last year that he was referring to league executives as inmates, not players.
“Often they feel like they have the money, power and privilege to kind of do what they want to do,” said Robert W. Turner, a sociologist and assistant professor at George Washington University who played briefly in the NFL and authored a book last year entitled “Not for Long: The Life and Career of the NFL Athlete.”
In the NBA, owners aren’t all angels, either. But the league dealt with its most famous case of owner misbehavior with such swift moral force that it’s now remembered more as a badge of honor for the league than a blight. In 2014, Clippers owner Donald Sterling was heard making racist comments in a recorded conversation. In response, NBA Commissioner Adam Silver immediately banned him and moved to strip him of ownership.
“Never let a good crisis go to waste,” Ganis said, quoting a famous line. “Adam handled that crisis magnificently.” It boosted Silver’s moral authority and enhanced his standing with players.
By contrast, in the NFL, the “Lords of the League can appear overmatched by the moral and cultural moment that confronts them,” author Mark Leibovich wrote in his book last year about the league, “Big Game: The NFL in Dangerous Times.”
The Ray Rice domestic violence case is a famous example. After his arrest in February 2014, the NFL first suspended Rice for two games, matching the typical punishment in the NFL then for domestic violence cases. But after TMZ published a video showing what Rice actually did to his then-fiance — knocking her unconscious in an elevator — the league faced widespread outrage about its leniency. The NFL reacted by suspending Rice indefinitely.
“The power (owners) have and the incredible king-like prestige they’re granted in their various markets is really quite disproportionate to their level of abilities and sort of the kinds of people you would want to surround yourself with in a business,” Leibovich told USA TODAY. “This is not like a Hall of Fame of business people that you would pick to be on the board of Apple or Federal Express or Bank of America.”
There’s a reason for that.
All in the family
At its core, the NFL is a series of large mom-and-pop operations. Most of its teams were inherited from family members, giving it a different culture than in businesses that were built from scratch by taking risks with creative skill and innovation.
Some are living institutions in their communities, such as the Ford family that has controlled the Lions since 1963. On Sunday, Bears owner Virginia Halas McCaskey, 96, was among those who showed up here with their entourages. Her father, NFL legend George “Papa Bear” Halas, founded the team in the 1920s. Her son, George, serves as Bears chairman.
“An industry characterized by family dynasties in which elderly patriarchs run most teams is not well placed to respond creatively to new challenges and opportunities,” Stanford sports economist Roger Noll told USA TODAY.
“In most industries, the primary source of innovation is entrants — new firms, or firms from other industries that are better placed to perceive new opportunities arising from technological change in adjacent markets,” Noll said.
Only five teams have been sold to new controlling owners since 2010, compared with 13 in the NBA. The NFL doesn’t get new ownership very often in part because the franchises are so valuable, with cost control in the form of a salary cap and relatively automatic revenue streams that are shared among the 32 teams.
Forbes estimated that 30 of the 32 franchises had valuations of $2 billion or more, compared with only nine of 30 at that level in the NBA. Families hold on to them because of their worth and shared tradition with multiple generations, such as with the Spanos family and the Chargers.
“It was very important to my mom and dad that it stay in our family,” said Chargers owner Dean Spanos, who took over ownership of the team from his father, Alex. “I think they did an outstanding job of estate planning to make that happen. It’s our goal to keep it in the family, the next two or three generations or as long as they want to.”
To keep owners from getting flatfooted, Spanos notes that staff at NFL headquarters, especially the commissioner, help guide them through fastchanging times. Goodell’s general message to them, he says, has been “don’t be complacent, always be a step ahead of everything.”
Even complacent owners still might find it nearly impossible to lose money on their teams. They collectively operate like a monopoly because of antitrust exemptions granted by Congress in the 1960s, and even a poorly run team is effectively guaranteed to get hundreds of millions of dollars through revenue sharing.
“If I’m an NFL owner, I can literally sit on my hands and I will make money,” Wilcots said.
For them, staying on top just might mean getting out of their own way.