Corporate Social Responsibility / Entertainment / Human Resources / Organizational Strategy

TMZ or Too Many Zzz’s: Were the Baltimore Ravens Sleeping on the Job?

Nika Simonson

Raymell Mourice “Ray” Rice, former running back for the Baltimore Ravens, was released from the team on September 8, 2014 and suspended indefinitely from the National Football League. Video footage that went viral earlier that day was leaked by TMZ, a celebrity news website. The footage shows a physical altercation between Rice and his then fiancée, Janay Palmer, which caused an outrage from the social media world and ultimately led to the end of Ray Rice’s career as a Baltimore Raven.

Rice, now 27, was drafted by the Baltimore Ravens in the second round of the 2008 NFL draft and signed a 4-year deal worth $2.085 million plus a $1.1 million signing bonus. He was selected to play in the Pro-Bowl in 2010 and 2011 and was also voted to the NFL All Pro Team in 2011. On July 16, 2012 Rice agreed to a 5-year, $35 million deal. On February 3, 2013 the Baltimore Ravens won Super Bowl XLVII. At the end of his career, Rice was ranked as the Ravens’ second all-time leading rusher, second all-time leader in rushing touchdowns, and ranked third for combined touchdowns in Ravens history.

On February 15, 2014 Ray Rice and Janay Palmer were both arrested and charged with assault after a physical altercation at the Revel Casino in Atlantic City, New Jersey. On March 27, 2014 a grand jury indicted Rice on third-degree aggravated assault, with a possible jail sentence of three to five years and a fine up to $15,000. The next day, on March 28, 2014 Ray Rice married Janay Palmer. For the incident, Rice was suspended from his first two games of the 2014 NFL season.

On September 8, 2014 TMZ released footage of the physical altercation that took place at the Revel Casino seven months ago. The footage shows Rice and Palmer approaching the elevator, arguing while they are walking. Once inside the elevator, the fighting continues and Rice physically attacks Palmer leaving her unconscious on the elevator floor. Once the doors open, the footage reveals Rice dragging Palmer out of the elevator, still unconscious.

The leaked video caused an outrage within the social media world, as well as an outcry from the general public about the lenient punishment that was given to Rice. NFL commissioner Roger Goodell apologized for the soft-shelled penalty he issued. New guidelines regarding domestic abuse offenses have been set in place. For the first offense it is a six game suspension without pay and a second offense will result in banishment from the NFL for at least one year.

The Baltimore Ravens administration, as well as the NFL, claims to have never seen the elevator footage until it was released by TMZ. The Associated Press, however, has a source who claims that they sent NFL executives a copy of the video and even received a voicemail on April 9, 2014 from the NFL offices confirming the footage had arrived and even describing it as “terrible.” Despite this fact, the jury had still indicted Rice with third-degree aggravated assault against his then fiancé and now wife Janay Palmer back in March. Could there have been an ulterior motive of the Baltimore Ravens to not look into the case and allow it to be buried instead?

The Opportunity Cost of the Truth

As stated earlier, on July 16, 2012 Rice agreed to a 5-year, $35 million deal, including a $15 million signing bonus, $15 million guaranteed, and an annual average salary of $7 million. 2014 denoted the third year of the five year contract. Last season a $7 million option bonus was exercised. To date, Rice has been compensated for $25 million of the $35 million associated with his contract. By releasing Rice the Baltimore Ravens are responsible for $14.25 million in unallocated cap dollars from the signing and option bonuses. This dead money will be split up as $4.75 million to be paid in 2014 and the other $9.5 million in 2015. A breakdown of the deal is displayed in the chart below.

Other ramifications of the scandal include the negative spotlight on the Baltimore Ravens. Offended fans could potentially lead to lower ticket sales, especially considering if they begin to lose games after the loss of one of their star running backs. Merchandise has already been flooding in for returns. Dick’s Sporting Goods and Modells, also a sporting goods store, have both pulled the jersey from their locations. Smyth Jewelers has allowed customers to return any Rice merchandise that was purchased for full store credit. Hersh’s Pizza in Baltimore gave away free pizza to all who came and handed in their Rice jerseys.

The consequences for releasing Ray Rice from the Baltimore Ravens were detrimental. Could this be a reason that the issue was not further looked into in the beginning? Did the Baltimore Ravens turn a blind eye to the scandal to avoid absorbing the heavy cost of dealing with the situation? Besides the two game suspension, the punishment was only delivered to the professional athlete after the video footage went viral and caused public outrage. In a world that is run by revenue, it is a shame that these types of situations are not dealt with on the spot because an organization is trying to avoid the unfavorable financial ramifications. Hopefully in the future, executives, as well as others, can learn from what took place in the NFL this week and take steps to handle similar circumstances early on and without mercy.

Ray Rice

Ray Rice 2

Ray Rice 3


Sources

http://www.spotrac.com/blog/financial-impact-of-the-ray-rice-situation/

http://www.spotrac.com/nfl/baltimore-ravens/ray-rice/

http://www.tmz.com/2014/09/08/ray-rice-elevator-knockout-fiancee-takes-crushing-punch-video/

http://www.baltimoresun.com/sports/ravens/ravens-insider/bal-financial-ramifications-of-ravens-terminating-ray-rices-contract-20140908,0,2715305.story

http://espn.go.com/nfl/story/_/id/11489134/baltimore-ravens-cut-ray-rice-new-video-surfaces

http://www.tmz.com/2014/09/10/ray-rice-elevator-punch-video-nfl-roger-goodell/

http://www.nfl.com/news/story/0ap3000000384861/article/roger-goodell-apologizes-for-decision-in-ray-rice-case

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