Reputation matters to every business on the planet. That shouldn’t be clearer than after Monday night when the NFL, which had one of the most pristine, unflappable reputations for an organization in the country, was flagged by every sports fan in the country for unsportsmanlike conduct.
On the final play, on the NFL’s biggest weekly stage – Monday Night Football – temporary referees made one of the egregious errors I’ve ever seen (Full disclosure: I’m a lifelong Packer fan). This explains what’s being dubbed Fail Mary, if you missed it last night.
Could this have happened with the regular union refs? Absolutely. Have bad calls affected the game in the past? No question.
So how does this damage the NFL’s reputation, and potentially damage its bottom line? Whether Commissioner Roger Goodell wants to admit it or not, the league is driven by legal sports gambling. Whether it’s small potato fantasy football leagues or betting on the lines in Las Vegas, the NFL’s record viewership is driven by the financial stakes many have in the outcomes of the game. They took a huge risk – what we call “reputational risk” – by locking out union officials in a contract dispute and replacing them with officials from the lowest levels of college sports and leagues like the Lingerie Football League.
The officials are the ultimate arbiters of the on-the-field product. They enforce the NFL’s complex rule structure and ensure a level playing field for both teams. Fans gripe about officials in every sport. But mostly officials don’t clearly affect the outcome of the game as they did Monday night.
And they don’t affect the pocketbooks for their fans. The reason the NFL’s ratings trump all other leagues isn’t the loyalty of fans like me who tune in every week to watch their team. Its fans who watch multiple games Thursday night, Monday night and all day Sunday to see how their bets might pay off.
According to reports, as much as $250 million changed hands on a call Monday night that no one other than league officials are defending. Rightly or wrongly, all of these NFL customers are blaming the league for putting ill-equipped and underprepared officials on the field to determine the outcome. The league believes it’s protecting the long-term financial viability of its business by keeping the normal officials away from the game as they negotiate an end to a pension program and whether the officials should receive raises.
The second the NFL decided to make the decision to hire third-tier officials to judge their first-tier product, they failed to manage “reputational risk.” The league took a gamble that no one would miss the “real” referees, that fans would keep watching no matter what and the league’s money machine would keep rolling.
Monday night the NFL lost — big. Most of the media is right; this won’t cause fans like me to stop turning into to watch their favorite team play every week. But it might stop me from watching games involving players on my fantasy team. It’s not worth the frustration.
How about those bettors that lost $1 billion on the call Monday night? Vegas sportsbooks have already said that the replacement refs affect the way they set the betting lines. Now the NFL’s reputation has been damaged as has fans’ trust in the game. The replacement refs will now affect the bets themselves – by people holding onto their money until referee behavior is more predictable. That means less interest in the games. That means fewer viewers tuning into games. That means the sponsors paying a premium to get in front of those viewers will start calling Roger Goodell’s office wondering when this lockout will end.
Goodell is about to find out what so many other overconfident executives have found out about their companies’ untouchable reputations. They’re not untouchable.