Roger Goodell agrees to a contract extension with the NFL

Why it matters: Under Goodell, the NFL’s business has boomed

Mr. Goodell is the most powerful executive in American sports, and the NFL is the largest and most powerful league in the country. Replacing it will not be easy. He has spent his entire career – more than 40 years – in the NFL and enjoys unparalleled leadership in the league’s vast and growing operations.

Over the years, Mr. Goodell became a confidant of many owners, listening to their concerns and helping them build new stadiums and complete other projects. He also helped secure labor peace through successive 10-year collective bargaining agreements, and helped negotiate more than $100 billion worth of media deals that will run through the end of the decade.

Teams also continue to sell out for record amounts. The Denver Broncos were purchased last year for $4.65 billion, double what the Carolina Panthers were sold for in 2018. Earlier this year, Daniel Snyder sold the Washington Commanders to a group led by Josh Harris for a record $6 billion.

Background: It pays to be a commissioner.

Mr. Goodell has been handsomely compensated for his help in turning the NFL into a financial juggernaut. His current deal is worth up to $200 million, and is largely based on bonuses and incentives.

The owners paid Mr. Goodell nearly $64 million in 2019-20 and 2020-21 after he helped secure a new labor agreement and lucrative broadcast rights contracts. He also led the league through the pandemic without canceling a game.

For a decade, the compensation committee recommended a pay package that was sent to the full owner for approval. But in 2017, Dallas Cowboys owner Jerry Jones threatened to sue six of the team owners on the committee who were negotiating a new contract for Mr. Goodell. In response, Mr. Goodell’s contract was restructured to rely more on performance-based bonuses rather than guaranteed salaries.

That confrontation included a $2 million fine against Mr. Jones for threatening the other owners. Since then, the owners of three influential committees, totaling about 20 members, have decided annually whether the commissioner has met the goals.

What’s next: The league has more time to search for a successor.

The contract extension will give the owners time to find potential candidates to fill Mr. Goodell’s position.

Inside NFL headquarters, Chief Information Officer Brian Rolapp is a contender. Chicago Bears president Kevin Warren, who previously worked for the Minnesota Vikings and Big Ten, is another potential candidate.

Mr. Goodell will be older when his new deals expire than his predecessors were when they retired. Pete Rozelle resigned from his position in 1989 at the age of 63, and Paul Tagliabue retired in 2006 at the age of 65.

“We’ll see what the future holds,” Mr. Goodell said of his plans after this current extension. “I’m not making any more commitments in the next three years. I’m going to bust my ass.”

Jim Irsay, owner of the Indianapolis Colts, said after a May owners meeting in Eagan, Minn., near Minneapolis, that the league has become so large and complex that owners should consider splitting the commissioner’s duties, with one person focusing on business matters and handling… Other field issues.

“It’s a healthy debate,” Mr. Goodell said. “The job changes over the years. It has changed since I’ve been commissioner. I know we will have the discussions in due course.”

The new contract will also give the league the opportunity to look outside the NFL for a potential replacement.