Does The NFL Really Need To Pay Someone $32M To Take The Commissioner’s Job?

News broke this week that the NFL was attempting to extend Commissioner Roger Goodell’s contract from 2019 to 2024. While this was interesting in the face of the fact that three of the highest value franchises loathed the current commissioner (New England, Dallas, and Washington), what was more of note was that the NFL had a committee dedicated to negotiate with Goodell for that extension and that the negotiation was not particularly smooth. Yes, amazingly enough, Roger Goodell, is playing hard to get.

Goodell, who started with the NFL as an intern and never left the league in his career, has been paid an estimated $250M in the first eleven years of his tenure as commissioner. No, that’s not a typo. A quarter of a billion dollars to the lawyer who’s job it is to mediate arguments between thirty-two owners and mete out punishment to players that have violated the rules. His last published salary for 2015 was $32 million. That’s not a typo either. That’s right–the NFL has to bribe Goodell, an insider, with over thirty extra large to continue in his position. That’s more than the average salary of any of the league’s top quarterbacks (number 1 is Derek Carr at $25 million).

Part of the logic in paying Goodell that much quid likely resides in the cognitive dissonance gripping the the market for Fortune 500 CEO’s. If one is the CEO of a $50 million corporation, they should be paid $750,000 per year…$500 million should be $7.5 million per year…$5 billion should be $75 million per year; and so on. Salaries are scaled to the size of the organization in terms of revenue–without regard to responsibilities, influence over stakeholders, innovativeness and constructive disruptiveness, and organizational complexity.

In Goodell’s case this likely means avoiding a strike with the player’s union and negotiating broadcasting rights with media companies, areas that would result in billions of dollars of losses if they were mishandled. It is unlikely, however, that the thirty-two owners give Goodell carte blanche in either of these cases…too much is at stake to allow a captive employee to dictate the future of the pocketbooks of three dozen billionaires.

What is more likely is that Goodell functions as the parliamentarian of the league. He bangs the meetings into order, reminds all parties of the rules, handles traffic between committees, and hugs draftees when they go onto the stage after being selected. Is this worth $32 million or more? Only the owners know, and by negotiating for an extension with Goodell, they seem to be signaling yes.

I’m not so sure. Jobs like that of NFL commissioner seem to be influenced by the demand for perceived decision-making skills, rather than the supply of actual competent decision-makers. It is sort of the bird-in-hand-rather-than-two-in-the-bush logic, or avoiding being penny-wise-and-pound-foolish, if you prefer that metaphor. Regardless it seems that the NFL owners could do better with less money.

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