Why the Whole NFL Could End Up Paying for Saints' Bounties

Penalties for NFLLast week, the NFL announced unprecedented penalties on the New Orleans Saints for its bounty program, including a one-year suspension of head coach Sean Payton, a six-game suspension of assistant head coach Joe Vitt, an indefinite suspension of defensive coordinator Gregg Williams, and a loss of its second-round draft picks in 2012 and 2013.

The Saints will certainly feel the pain. But the biggest loser from the the incident is not the single franchise -- it's the NFL in general. In fact, the whole fiasco -- like past NFL missteps -- could trigger a response that will be felt where it really counts: the bottom line.

Avert Your Eyes, Kids!

Imposing penalties was not just a smart ethical move, but a savvy business decision, too.

The NFL can't afford to appear to tolerate a culture of violence. It has an image to maintain -- a family-friendly image that allows the NFL to gain sponsorship from companies like Marriott (MAR), Visa (V), Verizon (VZ), PepsiCo (PEP), and Papa John's (PZZA). Then there's the revenue from television ad spots. CBS (CBS) estimates that rates will top $4 million for a 30-second spot during next year's Super Bowl game -- up from $3.5 million during this year's contest.

Football attracts the people that these advertisers want to reach -- a demographic that they can't reach through more violent sports like boxing or ultimate fighting. The sport can't afford to have people changing the channel because of offensive behavior.

According to a 2009 study by Scarborough Research, 42% of NFL fans are women. The sport also has a broad viewership among a variety of ages, races, and income brackets -- demographics that generally resemble the U.S. population.

Boxing and ultimate fighting fans, on the other hand, are predominantly male: 72% of ultimate fighting fans and 86% of boxing fans are men. Scarborough Research also identified 62% of Americans 18 and up as football fans, while it identified only 19% as boxing fans and only 16% as fans of ultimate fighting.

What About Obscene Gestures and Wardrobe Malfunctions?

Aside from its crackdown on the bounty system, the NFL has taken a number of other actions to protect its family-friendly image and broad demographic appeal.

• After the Justin Timberlake/Janet Jackson surprise frontal flash, the NFL took pains to keep its halftime shows clean. The league had to sign off on every song, outfit, and dance gyration.

• In 2007, it punted on controversial commercials, most notably ending the erectile dysfunction drugmaker Levitra's sponsorship deal.

• And those who are found conducting themselves in an unsportsmanlike manner -- defined as "flagrant acts or remarks that deride, mock, bait or embarrass an opponent" -- will be dealt a 15-yard penalty and the offending player fined.

The League's official website is pretty clear on what's at stake: "Coaches and players should keep in mind that every NFL game is broadcast on radio and television, and that there are open microphones near the playing field as well as close-up camera shots that permit easy lipreading by viewers. The League and its participants are severely criticized whenever obscene or profane language or obscene gestures are carried or shown on the air."

Defining acceptable on-camera conduct has no doubt helped the NFL maintain its broad fan base and sponsorship. Now bounty penalties will keep the game cleaner and more ethical on the field, as well.

Motley Fool contributor M. Joy Hayes, Ph.D., is the Principal at ethics consulting firm Courageous Ethics. She does not own shares of any of the companies mentioned. The Motley Fool owns shares of Papa John's International and PepsiCo. Motley Fool newsletter services have recommended buying shares of Visa and PepsiCo, as well as creating a diagonal call position in PepsiCo.


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