Wednesday, September 27, 2017

The Boycott Issue Hits America's Favorite Sport

You couldn't pay me enough to be the owner of an NFL team right now. I almost feel sorry for them. Even if you're not a  fan, by now you've heard about the controversy surrounding NFL free agent Colin Kaepernick, and his decision to kneel during the national anthem last year. You've also probably heard about the President's call for NFL owners to fire players who don't stand while the anthem is played and his prediction of the league's demise if the protests continue. Surprisingly, last Sunday and Monday, some of the same owners who made a business decision to take a pass on  Kaepernick despite his quarterback stats (citing among other things, the potential reactions of their fans) have now themselves made it a point to show solidarity with their players during the anthem. The owners are locking arms with players, some of whom are now protesting for the first time.

Football is big business, earning $13 billion last year, and the owners are sophisticated businessmen with franchises that are worth on average $2.5 billion dollars each. They care about their fans of course, and I'm sure that they monitor the various boycotts. They are also reading about lawmakers calling for funding cuts for teams that boycott. But they also care about their sponsors. Fortunately for the NFL (and for the players who have lucrative deals), most sponsors that have made statements have walked a fine line between supporting both the flag and free speech. The question is, how long will all of this solidarity last? There is no clear correlation between the rating shifts and the protests but as soon as there is definitive proof or sponsors start to pull out, I predict the owners will do a difficult cost-benefit analysis. Most teams aren't like the Green Bay Packers, which has no "owner," but instead has over 100,000 shareholders. Most teams don't have boards of directors or shareholders to answer to. Most of these owners used their own money or have very few business partners. 

The NFL teams owners' decision to maintain support of the players will likely be more difficult than those of the many CEOs who have expressed their disagreement with the President over race-related matters by quitting his advisory boards  (see my previous post ). Those CEOs could point to their own corporate codes of conduct or social responsibility statements. Those CEOs considered the reputational ramifications with their employees and their consumers, and the choice was relatively straightforward, especially because there was a more unified public outrage. The NFL owners, on the other hand, have highly skilled "employees" from a finite pool of talent who have been called SOBs by the President but who are also being booed by the fans, their consumers. The owners can't be fired, and it's very difficult to remove them. Should the owners stick with the players (some of whom are brand new to the protest scene) or should they wait to see the latest polls about what fans think about the leadership of America's favorite sport? Should they fire players, as they probably could under their contracts? The big test may come during a planned boycott by veterans during Veteran's Day Weekend. Perhaps I will be proven wrong, and maybe boycotts will have an effect on what the NFL owners and players do, but I predict the players and owners will want to get back to the business of playing football sooner rather than later.  I'll keep monitoring the situation this Sunday and for the rest of the season.

 

 

http://lawprofessors.typepad.com/business_law/2017/09/the-boycott-issue-hits-americas-favorite-sport.html

Contracts, Corporate Personality, Current Affairs, Marcia Narine Weldon, Sports | Permalink

Comments

Great posting with relevance regarding the intermingling of dissent, business and public relations. Let me preface this comment starting with the anecdote that residents of the US traditionally have “very short memories.” So, it is very difficult to ascertain any lasting impact. There was a time when baseball was the national past-time yet it fell out of favor. I’m quite certain baseball never saw the shift coming.

I think it is worth noting that NFL viewership in 2016 was down significantly. Tracking that in 2017 will be quite interesting. The league has sought to blame declining viewership on weather and poor match-ups rather than protests expressed in the delivery of the entertainment product. Clearly, few in the league are old enough to remember “The Ice Bowl” or a panoply of natural fields. By analogy, as other entertainers have increasingly decided to engage in public political discourse, the box office – with exception for franchises (e.g., Star Wars, Star Trek, Marvel Universe) – have been lackluster and continues to decline. Perhaps the public wants the diversion of entertainment without distraction.

I must confess that I drafted my letter to Roger Goodell on Sunday, 24 September. In general terms, I pointed out that the NFL is an entertainment business cloaked in a sport. Without comment as to merits of the protest and clear support of every person’s right to free speech and expression under the First Amendment, I also pointed out my family’s perspective that the players and owners have not really considered their core demographic. Further the protesters have access to the financing and celebrity necessary to bring attention to their issues without disrupting the league and game. The NFL has spent years reshaping the sport in various ways to broaden its fan base. This has included the honoring of our military veterans post 9-11, notwithstanding fly-overs and precision sky-diving, with the intent of cloaking the league in the blanket of the anthem and flag. They seek to expand their viewership and support by extending themselves into new markets – but should they lose their base demographic I suspect that the gains would not make up for the losses. The old business maxim is, “one dissatisfied customer will cost you more customers than you can develop.”

What has been more interesting is what kind of opening this has provided. The Nashville Predators, who recently contended for the NHL Championship, tweeted out yesterday - - “buy our tickets, attend our games because our players will be standing for the anthem.” As a Nashville resident, my observation is that the Predators are head and shoulders above the Titans with regards to PR and marketing. This is evident because, in a very short time, they have created a hockey market in a Southern climate where – including the influx of non-native Tennesseans from tradition hockey markets – the organization came to Tennessee without having a pre-existing populace having knowledge or enthusiasm for the sport. Whereas, football in a Southeastern Conference State borders on religion to which the vast majority know the catechism by heart.

In light of these events, came across an interesting article on the rights of employees to free speech and expression in a private workplace. Really a nice piece available at: http://www.takingknee.com/uploads/8/1/4/0/8140195/an_employment_stance_on_taking_a_____knee__bramhall.pdf. I circulated it because I thought it would be a very provocative topic in an employment law class.

Looking forward to more postings on this topic.

Posted by: Tom N | Sep 28, 2017 11:53:11 AM

Tennessee advertisers withdrawing from NFL events. See: http://newschannel9.com/news/local/cleveland-businessman-calls-nfl-protests-unpatriotic-pulls-ads-during-games

Posted by: Tom N | Sep 28, 2017 11:57:15 AM

Viewership was down 12.3 and 11.5 percent in weeks 1 and 2. It was down just 7.2% through week 5, so it's recovering a bit. The protests aren't the only reason for the decline. Hurricanes have also contributed. The NFL will meet with the players union and work something out to where players can still show their disapproval of how minorities are treated, but not during the national anthem. If the declines in viewership and revenue continue, this will happen sooner rather than later.

Posted by: Burner Combustion Systems LLC | Oct 13, 2017 11:19:29 PM

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