The American Money Machine

Friday, Dec. 17, 2004 By BILL SAPORITO/FOXBORO

Article Tools

Reprints

(4 of 5)
The league has pulled this off despite a decision-making structure that seems perfectly rigged for trouble. There are 32 owners, many of whom are entrepreneurs who tend to follow the golden rule of management: he who has the gold makes the rules. Those owners are assigned to committees charged with handling everything from labor, competition and broadcasting to finding a team for Los Angeles. It's a group that includes NFL rebel Al Davis of the Oakland Raiders, financial ciphers like Malcolm Glazer of the Tampa Bay Buccaneers, nouveau riche types like Daniel Snyder (Redskins) and old-school owners such as the Rooney (Steelers) and Mara (Giants) families.

The trickiest part? No decision or deal can be approved without a 75% majority of the owners. "Nine guys can prevent you from taking a bathroom break," says Denver's Bowlen. For the NFL's front office, the 75% rule practically demands that any new idea or proposal be absolutely compelling, since it must be embraced by a group of powerful individuals who don't necessarily share the same agenda. "It's not that we all like each other and want to have dinner with each other all the time," says Bowlen. "It does force a clarity of thinking," says Harold Henderson, the NFL's labor chief. "You can't present something to them unless you've thought it through thoroughly." Or as Bowlen puts it, if there are 11 or 12 owners who agree to disagree on a proposal, "something must be wrong with it."

Although the Patriots are now one of the NFL's most successful teams, the counterintuitive management lesson that owner Kraft had to learn is that losing is the defining feature of football. "Even in a good year, when you go 10-6, you are going to lose about 40% of your games," he says. So Kraft went long in his management approach. A paper-industry magnate, he says football has a lot in common with the rough-and-tumble paper trade, in which shifting commodity prices can quickly turn gains into losses. But having the right system in place brings profits in the long term.

That's particularly important on the field. "It truly is a marathon, and there are lots of ups and downs. You have to support the people you believe in, especially when things aren't going well," he says. In 2000 Kraft hired Belichick, the coach he had wanted to sign a year earlier. It cost him a first-round draft pick to pry Belichick loose from the Jets. Belichick promptly lost 13 of his first 18 games, but he eventually delivered two Super Bowl titles over the past three years.

Belichick defines the 21st century NFL coach: tech savvy, detail oriented and passionate about personnel--a mini-CEO in his realm. New England spends inordinate amounts of time evaluating playersand not just assessing athletic talent. It looks for personalities that fit into New England's system, which is not star driven. A head coach today, Tagliabue explains, is "someone who is effectively an executive investing half a billion dollars in the next five years." That's the amount of money each coach will have to spend on players over that period, and the salary cap prevents any team from buying its way out of bad choices. Just ask the Washington Redskins, whose owner, Snyder, has been driven to distraction by his team's lack of success on the field, even though his franchise is now worth an estimated $1 billion.