The NFL is not dying, but it may be plateauing

The National Football League had an objectively bad year in 2017.

Primetime television ratings are down nearly 10% overall on average this season; players took up the mantle of Colin Kaepernick from last season and began kneeling or raising a fist during the national anthem to protest police brutality, alienating some fans and forcing NFL corporate sponsors to take sides; President Trump fueled the political narrative by targeting the league in tweets and at live rallies; and a polling firm says the NFL is now one of the most divisive brands in America.

Fewer Americans now identify themselves as football fans compared to five years ago, while fans of the NBA and NHL have grown, according to Gallup.

Amidst all this, the NFL extended the contract of its commissioner, Roger Goodell, for five more years at pay of up to $40 million per year if he hits certain metrics.

NFL Commissioner Roger Goodell at a press conference after the NFL owners meeting in Irving, Tex., on Dec. 13, 2017. (AP/LM Otero)
NFL Commissioner Roger Goodell at a press conference after the NFL owners meeting in Irving, Tex., on Dec. 13, 2017. (AP/LM Otero)

Some fans were surprised that the NFL would renew Goodell. (He reportedly wanted lifetime healthcare for his family, and lifetime use of a private jet.) But people too often forget that Goodell works for the team owners, and has one main job, in their eyes: make them money.

Goodell has done his job. The league’s revenue has climbed every year for more than a decade, to $14 billion this year. And the declining ratings do not mean lower revenue for the league, at least not yet, because its television deals are locked in already; it is broadcast networks who stand to lose from the falling ratings, since they will have to give back ad time.

Most of the headwinds against the NFL right now are not Roger Goodell’s fault. Most are not even really the NFL’s fault, either. They are macro business factors that the biggest sports league in the country cannot stop, try as it might. There’s good reason why Michael Lewis, author of “The Big Short,” tells Yahoo Finance the next big short could be the NFL.

Cord-cutting and attractive distractions

The biggest challenge facing live football is simple cord-cutting. Sports fans are increasingly able to find highlights and replay clips online, on platforms like Twitter, Instagram, and Snapchat, so they feel less of a need to pay for cable to watch live games. This trend is hurting ESPN and Fox Sports 1 as well, not to mention viewership of other sports, too, like Nascar racing. (The NBA, on the other hand, has seen its ratings go up.)