The Race Card …

Last week, the Washington Post had a report that Charles Barkley will host a new TV show – to make its debut next year on TNT – where he will examine “race, class and cultural differences” in our society. The working title for the show is “The Race Card”. This program has the potential to be very important and constructive for a wide audience and this program has the potential for self-immolation. Clearly, I would prefer the former outcome but even though I would root for that, I have to acknowledge that “crash and burn” is a real possibility.

Charles Barkley is not shy about sharing his opinions and feelings and his opinions are never ones that are universally held throughout society. Here is an overview of what he will try to do:

“… bring [race and cultural tensions] to the forefront, and create a dialogue, and he’s going to bring a Who’s Who [of people] with him to both dramatize it, to opine on it, to participate. And he hopes it’s sort of a lightning rod, and a really constructive dialogue.”

I can assure you that I will be watching for this program and hoping that it succeeds. And, simply because Charles Barkley has been himself “sort of a lightning rod” in the past, there will be some who tune in because they think this will be equivalent to inviting Howard Stern to a church social.

There was another report that caught my eye recently regarding the Monday Night Football game this year that will be played in Mexico City (Raiders/Texans on 21 November). The game will take place in Azteca Stadium there and the venue seats 98,500 people. The NFL reported that after tickets for the game went on sale, the game was a sellout “within minutes”. This is scheduled as a home game for the Raiders; clearly, this will be the largest home attendance that the team will see this year.

The reason that report caught my eye is because it points to the potential for the NFL to expand revenues in international settings. Roger Goodell – like Charles Barkley – has been a lightning rod for the last several years with regard to his role as the league disciplinarian. [Aside: Back in September 2014, I wrote here that Goodell ought not be the league disciplinarian because it interferes with his main job – growing the revenue for the NFL.] This show of support for the NFL product in an international venue seemed to be an indicator that Goodell’s “vision” for annual revenue of $25B for the NFL by 2027 might just be realistic.

Consider that in 2010, the NFL revenue was $8.5B and in 2015 the NFL revenue was $13.1B. In case your calculator is not handy, that is an increase of 54% in 5 years. If you extrapolate that sort of increasing revenue over the next decade you will see that NFL revenue in 2025 would be in excess of $30B. Since it becomes much more difficult to sustain that level of growth as the base for calculating the growth expands, even the NFL has to accept the reality that growth will slow – – and yet an annual revenue of $25B in 2027 might be achievable.

This is what Roger Goodell is hired by the owners to accomplish; that is why he enjoys support among the owners. By the way, the players ought to appreciate what he is doing – and what he is seeking to accomplish – because roughly half of all the league revenue shows up in players’ contracts. If the league revenue were to grow by $12B in the next decade, then player salaries will grow by $6B. Even if the players may feel that they deserve a slightly higher percentage of the gross revenue than they are currently receiving, it is not as if they are the recipients of chump change.

The way I see it, the single largest obstacle in the way of the NFL growing to the levels that Roger Goodell has envisioned is continued labor peace. The current CBA extends through 2020; that is the timeframe where this growth engine could hit a speed bump – – or it could find a bridge over troubled waters and come to suitable compromise(s). Therein lies the great unknown in all of this.

How will the league grow revenues between now and 2025 – – assuming labor peace beyond 2020?

    1. International expansion: The league maintains they want to put a franchise in London. I think that is not a good idea but it is certainly not so disastrous that it would topple the league if they did it and it turned out to be as bad as I think it would be. I think the NFL can continue to play individual games in international venues (London, Mexico City, Tokyo, Calgary, Berlin, Beijing). With significant attendance at those games, interest there will grow in the NFL product which will open doors for more TV rights fees abroad and for more merchandise sales.

    2. More TV games: Notice, I did not say more games here; while I would enjoy seeing an 18-game NFL regular season schedule, I recognize that player safety issues stand in the way of having that happen in the near future. However, the NFL has gone from “Sunday-only” to “Sunday and Monday” to “Sunday and Sunday Night and Monday” to “Sunday and Sunday Night and Monday and Thursday” in its scheduling. What that does is put more games on the air in a national audience setting. That attracts more viewers; that means ratings go up; that means more ad dollars; that means higher TV rights fees and that increases revenues.

      Saturday is a “set-aside” for the NFL so that they do not poach on the long-standing tradition of college football games on Saturday.

      Therefore, Tuesday and Wednesday are still in play. Do not discount those possibilities…

Finally, since I talked about Charles Barkley above, here is an item from Gregg Drinnan in his Keeping Score blog:

“A piece of advice from the always relevant Charles Barkley: ‘Don’t get in a fight with somebody who’s ugly. They got nothing to lose.’”

But don’t get me wrong, I love sports………

4 thoughts on “The Race Card …”

  1. Regarding NFL revenue growth, I put on my FP&A cap and determined that revenue growth CAGR for 2010-2015 was 9%. Moving to $25B by 2027 would indicate a CAGR of 5.5%, or “mid single digit.” That certainly seems achievable.

  2. The major difference between football and baseball is that no one regular season baseball game is very important. It’s a sport you follow across an entire season and the drama is about the standings. In football, because there are so few games in a season, each game is important. At least, it used to be. Now that almost 40% of the teams make the playoffs, each game is losing some of its significance. So, the NFL’s plan is to put more of those insignificant games on nights when we could be reading a good book or playing games with our kids. I suppose we could do those things even if the games are on, but who really cares if Tampa Bay has a key match-up with the Jaguars on Wednesday night? The NFL on TV is a good thing, up to a point. And it’s damn close right now.

    1. Doug:

      I agree there is a saturation point but I do not think we are at that point yet. Your example of a Tampa/Jax game on a Wednesday nite would not have been a compelling game the last few seasons – – but remember that lots of people bet on any game they will see on TV and then they watch it. There is a core constituency for more TV games – even if some are inconsequential.

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