I.P. Blog: NFL Negative Publicity Affects Value

By Jill StarbuckPellegrino & Associates

Football is inarguably the most anticipated sport in the United States. Boasting more revenue than any other national league in the United States, the NFL generates approximately $9.5 billion annually.[1] However, this year, the league faces considerable negative publicity. Headlines announce lawsuits from cheerleaders suing for low wages, double standard punishment for NFL personnel, an immense increase in concussions, and the Redskins name debate. Also, headlines shout greed over the NFL’s proposal to charge Super Bowl halftime entertainers to perform. Add to the mix lackluster game attendance and a continuous rise in ticket prices, the NFL seems to be struggling. Or is it?

The NFL dodges issues every year. While this year seems to be abundant with various negative issues, the league masters its ability to rectify issues—quickly and smartly. For instance, the league announced new penalties regarding sex violations and domestic abuse in response to public outcry regarding Ray Rice’s initial light punishment. In addressing the concussion issue, the league funded a think-tank for handling concussions in sports around the world. These are just a few examples of how the NFL responds to negative publicity.

The NFL also faced public backlash over its suggestion to charge halftime entertainers at the Super Bowl. Typically, the NFL does not charge Super Bowl halftime entertainers. Nor does it pay them. However, despite the public backlash, the NFL may have a good business point. If advertisers are willing to pay millions for mere seconds on a commercial, why wouldn’t entertainers pay for exposure for a much longer period? On the other hand, approached entertainers such as Katy Perry, Coldplay, and Rihanna do not necessarily need the exposure. They are worth more than $100 million each and their concerts typically sell out. However, other singers/bands who seek more exposure may find it worth the cost, as the halftime show draws tens of millions of viewers.

Another area of so-called greed comes with the live game experience. Fans who want the live experience pay a hefty price, with the average cost of attending a game at nearly $460.00.[2] While the NFL could stand a boost in attendance, attendance remains steady over the last few years. Therefore, although prices have increased, the effect on attendance has been minimal. In the hopes of spiking attendance, the NFL is making efforts to enhance fans’ stadium experience by offering Wi-Fi and cellular standards, fantasy-friendly amenities, gourmet food, more space, and other perks. However, realizing that the cost factor, advanced technology, and comfort keep many fans at home, the league continues to find ways to capitalize on its at-home viewers. Currently, the NFL has network contracts totaling $5 billion annually through 2022.[3]

Negative publicity is never a good thing. However, with a large number of personnel in the public view, negative hype is bound to happen. Yet, the fact remains that the NFL continues to dominate the U.S. sports industry. The league’s ability to tackle negative publicity with solutions helps keep its value stable.

[1] http://www.slideshare.net/q1productions/why-arent-nfl-fans-attending-games

[2] https://www.teammarketing.com/public/uploadedPDFs/nfl%20fci%2014.pdf

[3] http://www.scribd.com/doc/226843916/Why-Aren-t-NFL-Fans-Attending-Games

ICLEF • Indiana Continuing Legal Education Forum, Indianapolis, IN

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