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Monday, November 12, 2007

COMMISSIONER GOODELL Q&A - NFL Fall Meeting - Philadelphia, PA, 2007

NFL Fall Meeting
Philadelphia, Pennsylvania – October 23, 2007

Roger Goodell: We had a very productive day. We had a long day of meetings, but let me give you the highlights of some of the things we talked about and then I’ll take your questions and answer anything you have outside of this. We began the day with a report on the game. We always do that with a focus on the game and the key factors we look at with respect to the game; points scored, length of the game, pace of the game, and number of penalties. All of that was very positive.

We did a report, within the context of that, on the draft and the changes to the NFL Draft for next year, which I believe you have a release on. We also did a report on the Pro Bowl and some of the changes we’ve been contemplating to try to bring back some excitement to that game. Then we had a very long discussion on the NFL Network. We have the chairman of the NFL Network, Jerry Jones, here who will be happy to answer any questions also. The importance of this to us is as a strategic asset and our future plans with respect to media.

We also had some important votes on the NFL.com business model. It is an important step for us to make our site and all 32 sites, the clubs and our league site, better for our fans and we made some very big steps in that regard today.

We had some discussion on the Buffalo-Toronto proposal. Ralph Wilson addressed the ownership. We had a report on it. We did not take a vote on that, but we will have further discussion.

Then we had a vote on lowering the debt ceiling. All of you are aware of the current market conditions and the credit markets. We as a league like to make sure we are making prudent decisions about our business structure and what we are doing to respond to those credit markets. We have agreed to reduce the debt ceiling by $30 million per club over the next three years. I think that hits the key points and I’ll be happy to take your questions.

Q: Length of Ralph Wilson’s proposal:

RG: It is a five-year proposal. One regular season game and I believe three preseason games.

Q: Any objections?

RG: No. There were a number of issues that we raised for the membership that we would like to address. This is still relatively fresh for all of us so we as a league have a responsibility to look into a number of issues. It was made clear by Mr. Wilson and by the Bills’ people that the county and the state had passed their agreement that they could go forward on this. We don’t have agreement that I know of with respect to the parties in Toronto so we want to see all that and look at all of those issues.

Q: Speaking with Mark Cohon, CFL Commissioner about the proposal…

RG: I did. I believe it was last Friday. I assured him that we continue to have a great interest in the CFL and their continued viability. That is one of the issues that was raised today with respect to this. We would certainly want to understand the impact and have greater discussions with the CFL and the promoters of the games in Toronto to make sure that we do it in a way that is responsive and continues to promote CFL football because we think that has a great heritage. We have been very active in continuing to support that.

Q: Belichick and spying incident…

RG: I do a normal report to the membership which takes 15 minutes or so and then we start focusing on the game with our Competition Committee, but in the context of that we spoke about the integrity of the game and how important it is that all of our fans understand that our game is being played by the same rules. We continue to make sure that all of our clubs and the league are doing everything possible to make sure that our games are played within the rules that we’ve established and that our fans have that confidence. I think that they do and I just reassured them that if they have issues with respect to things that are happening in our game that they contact us so that we can pursue them.

Q: Reaction to charges that this incident is being swept under the rug…

RG: First, we were the ones who brought it out so if we’re sweeping it under the rug…we’re the ones who raised it. I don’t agree with that assessment. I think we dealt with it forcefully, aggressively, and effectively. The thing that you want in discipline is to make sure that it doesn’t happen again and the other clubs understand that there are very significant consequences if policies are violated. I think that message was sent. We also want to send that message to our fans so they understand that all teams are playing by the same rules. The inference that you make in regards to us destroying the tapes, that was our intention from the get-go. There was no purpose for those. We said that we wanted those materials destroyed because we didn’t want anyone to have that material or the notes that could’ve come out from that. We went ahead and did that as we expected to do. Everything that we found was consistent with what we thought.

Q: Shortening on the draft and discussions about moving it to Friday night…

RG: We’ve talked about that. We at this point don’t think that it’s the right move. We think that Saturday is still the better time for us. I don’t anticipate that in the short term but we have evaluated that.

Q: Situation with San Diego…

RG: When I get through here I am going to meet with Dean Spanos and the team people. I haven’t gotten an update because I’ve been in a meeting all day but I understand that there are thousands of people at Qualcomm Stadium and of course public safety is our number one concern. We certainly don’t want to interfere with anything in that area. Of course we also have to work with the local officials to tell us whether the facility is going to be available. In the meantime I think you’re aware that the team is on its way or about to go out to Arizona. They will be working out in that facility for the week. We’ll have to make a decision on the game as soon as we have more information.

Q: Pro Bowl…

RG: The big issue is how we can bring more focus to the Pro Bowl, to our star players, and to the event itself. We have discussed everything, including moving the time of the game to prior to the Super Bowl so that it is in advance and part of the buildup of the Super Bowl. We have also talked about whether we would alter the location on some kind of rotating basis to some site here in the United States, particularly around the Super Bowl or in the Super Bowl site. Hawaii would probably be part of that rotation in some fashion but I would expect some decisions would be made. This isn’t for this year’s Pro Bowl; this is for 14 or 15 months from now.

Q: Debt ceiling…

RG: It was very simple. One of the reasons that the NFL is one of the most admired businesses and sports leagues is because we manage our business properly. When you look at the amount of debt that is out there and where the markets are it is just a prudent business decision.

Any discussion today on the disability issue?

RG: No. We’re doing that first thing in the morning, Paul.

Q: Vote on funding…

RG: There very likely will. There is a resolution on the floor. I would expect a vote, yes.

Q: What the proposal calls for…

RG: The proposal is essentially a one-time funding to allow us to put some additional funds into the alliance that we’ve created so that there is sufficient funding and that we’d be able to handle issues in an ongoing manner. It is not pension related. It is for medical needs for people that have a specific need that we can take care of.

Q: Joint replacement?

RG: Joint replacement is one of those programs. Also cardiovascular screening and possibly assisted living.

Q: Future of games internationally…

RG: A year ago is when we passed the resolution allowing the regular season series. As you know we are playing in London this week and every indication is that we’re going to have a tremendously successful event. I think it is a logical step for us. Next year would be to add a second market. We’re going step-by-step but the reaction that we’re getting is extraordinary.

Q: Advantages of Bills playing in Toronto…

RG: The key point that was made by Ralph Wilson, and I share this, is that this is to make the team viable in the Buffalo market. It is an extension of the regionalization that they started 10 years ago that I actually had some involvement with, so I understand what they are trying to accomplish. That is to reach out to the broadest audience by regionalizing and the southern Ontario, Toronto area is an important market to them. They are selling more and more tickets there and I think this is an important opportunity to bring more fans to Buffalo from the southern Ontario area.

Q: Just to confirm, is it one preseason and one regular season game every year for five years?

RG: No. It is one regular season game for the next five years and three preseason games starting next year and the third and fifth year.

Q: Regular season games would start next year also?

RG: I believe so, yes.

Q: Alternatives for Chargers game…

RG: I’d be able to give you better information on that in about a half-hour from now. Our staff is working on that. They go everywhere from San Diego to Los Angeles to Texas to Arizona, and in between.

Q: Is scheduling more attractive games one of the options for the NFL Network, i.e. Patriots vs. Colts, in order to have more leverage over cable companies…

RG: First, we believe as it relates to the cable operators that we have a very compelling product outside of our games. We think that the production quality and content that we have on the NFL Network on a year-round basis is in great demand and the consumers want it. That is the issue that we are having with our cable operators. They are trying to restrict the distribution of that to a point that we’re not comfortable. We think that it should be available to a broader audience and that is really the fundamental aspect of our broadcast policy. As it relates to the games, we have a very attractive series of games this year. We are fortunate to have the Cowboys on twice; we have Cowboys and Packers on the second game of the year. We think all of our games are attractive but we have some great matchups that fell in place for us when we set our schedule last April.

Q: How much leverage do these attractive matchups give you right now with the cable companies?

RG: The bottom line is that consumers are the ones who should win here. The consumers should get the product and that is what we are trying to do. We are trying to make sure that our consumers understand that we have a great product, we have some great games that are going to be on, and some of them won’t get to see it because the cable operators are not distributing it. We have one cable operator that happens to be close to here which has taken us from nine million homes to one million homes. That is a significant difference. They have the right to put is in nine million homes. It is not a matter of negotiation. It is just a decision that they made.

Q: Ongoing talks…

RG: There are very little talks that are going on with Comcast right now. We’ve had some discussions with Time Warner recently but right now we don’t see that this is going to get resolved and that is a concern for us. Let me have Jerry speak now.

Q: Assuming the Dallas-Green Bay was on FOX, how much of the country would see that?

RG: There are really only two games that go on a national basis -- NBC’s game on Sunday night and ESPN’s Monday Night Football. Most of our games on Sunday afternoon are regionalized, so if it had been a Sunday afternoon game it would be regionalized like the rest of our Sunday afternoon package and go to a smaller percentage of the country.

We have some games that to go six or seven percent of the country, and that’s one of the reasons why we think the NFL Network is so valuable here. This gives us a chance to bring more football to more fans 365 days a year.

This takes a game that might have gone to 10 or 12 percent of the country to a broader audience now, if it’s fully distributed. That’s our issue.

Q: What is the current number of subscribers, and what could it be if you got the cable companies to go your route?

RG: It’s a tough question to answer. The first part of your question is 35 million. The tough part to answer is it would depend on what you negotiate in terms of distribution levels with those cable operators. They all have different amounts of homes. Comcast, for example, is nine million homes. They were at eight million last year, and their digital package penetration has gone up one million, so the network would have been available in nine million homes this year. People who got that last year don’t have that now. The only way to get that back is to spend $5 to $10 per month for a sports tier.

Q: Any ongoing conversations with Comcast?

RG: We discontinued discussions with them back in August because we weren’t getting anywhere. It was clear they were telling consumers that we were in negotiations, and we weren’t. We were disappointed in the fact that they tiered us, that they took this away from consumers, and now they’re charging consumers more money to get it back again. We thought that was inappropriate.

Q: Same with Time Warner and Cablevision?

RG: From time to time, there are discussions that go on, but I would say that right now we’re not optimistic a deal is going to get done.

Q: When NFLN was first created, did you have an estimate of how many homes you’d be in by this point?

RG: Yes, we’re slightly below that. We were hoping we’d be closer to 50 million homes right now.

Q: Aside from DirecTV, what are the other options you can suggest to fans in an area like Philadelphia, which is monopolized by Comcast?

RG: Telephone companies are now getting in the business of video distribution. Verizon, AT&T – they are now building up these services, which carry the NFL Network.

Last game of the season on NFLN, if the Patriots enter that game 15-0, who would fans be angriest at? The NFL or the cable companies?

RG: I think the reality is they’d probably be angry at all of us. Comcast is a perfect example of that. Last year, eight million people would have been able to see that game. They’re not going to get to see that game this year unless they pay Comcast $8 a month for the next 12 months. We think that’s wrong, and that’s why we’re taking the position we’re taking. We are not going to take our distribution down. We know our fans want to see us. The last time I looked, 95 of the top 100 cable shows in history are NFL games. We know we are the most popular programming on cable television. That’s been proven by the facts.

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