March 20 (Bloomberg) -- Paul Tagliabue is retiring in July after 16 years as the National Football League's commissioner, having helped the league complete a labor agreement and $12.5 billion in television contracts in the last year.

Tagliabue, 65, succeeded Pete Rozelle as the NFL's commissioner in 1989 and said in a media conference call today that retirement is ``the right decision for the league.'' He had two years remaining on a three-year extension signed in 2004.

NFL owners 11 days ago accepted an extension to the collective bargaining agreement, assuring six more years of labor peace in the league with $6 billion in revenue last year and the highest television ratings for any U.S. sport.

``The NFL has become the de facto crown jewel of professional sports because it fits the public's desire for how they wanted sports delivered,'' Paul Swangard, managing director of the University of Oregon's Warsaw Sports Marketing Center. ``Tagliabue was able to see that trend coming and put the league in a position where it took full advantage of that opportunity.''

Tagliabue and the NFL didn't address a potential successor. Owners will begin formal discussions on Tagliabue's replacement at their annual meeting this month in Orlando, Florida.

Houston Texans owner Bob McNair said the job should be split in two.

`Football, Business'

``We're a very large enterprise now,'' McNair said in a telephone interview. ``It will be difficult to find a CEO with a strong-enough football background, and a football person with a strong-enough business background. We need to keep growing and expanding.''

Roger Goodell, the league's chief operating officer since 2001, is a leading commissioner candidate, media outlets including ESPN said. Goodell, 47, didn't return a telephone message left at his office.

Other possible contenders mentioned in news media such as Sports Illustrated magazine are Baltimore Ravens President Dick Cass and Atlanta Falcons President and General Manager Rich McKay. ESPN also listed NFL Executive Vice Presidents Jeffrey Pash and Eric Grubman. Cass, through a team spokesman, said he hasn't been approached about the position and that he plans to stay with the Ravens.

`Commissioner' Rice?

U.S. Secretary of State Condoleezza Rice, who sat in Tagliabue's private box at last month's Super Bowl, has said she'd be interested in becoming NFL commissioner someday. Asked at today's State Department briefing in Washington if Rice, 51, might make a play for the job, spokesman Sean McCormack said ``the secretary is enjoying being secretary of state.''

Tagliabue called Pittsburgh Steelers owner Dan Rooney this morning to say he planned to retire, the league said in a statement. Rooney, the chairman of the ownership committee that negotiated Tagliabue's last contract extension, then notified the other 31 teams via e-mail.

``I wanted to pick a time to make this transition when we had all the critical elements of the league in place to be able to move forward and have the momentum we have on all fronts,'' Tagliabue said on the conference call.

Tagliabue made $9.58 million in salary, benefits and deferred compensation in the year ended March 31, 2005, according to public tax documents acquired by the Sports Business Journal. He made $11.3 million the previous year.

Salary Cap

The new labor agreement ended more than a year of negotiations. Owners voted to accept a final offer from the NFL Players Association at the deadline, keeping the league's salary cap that limits team payrolls in place.

Tagliabue said at the time that the agreement ensures competitive balance in the league as well as labor harmony.

The NFL hasn't had a work stoppage since 1987, the longest run for a major professional sport in the U.S.

The NFL last year reached a six-year, $3.6 billion broadcast agreement with General Electric Co.'s NBC for Sunday night games and an eight-year, $8.9 billion contract with Walt Disney Co.'s ESPN for ``Monday Night Football'' telecasts.

CBS Corp. and News Corp.'s Fox are paying the NFL a combined $8 billion over the next six years for Sunday afternoon games, while DirecTV is paying $3.5 billion to show games on satellite television for the next five years.

The NFL under Tagliabue also created its own television network, grew to 32 teams from 28, made changes in the alignment of its divisions and expanded its international presence.

Before becoming commissioner in 1989, Tagliabue was the NFL's principal outside counsel as a partner at the Washington law firm Covington & Burling. Prior to that, he served in the office of the U.S. Secretary of Defense as a policy analyst.

To contact the reporter on this story: Erik Matuszewski in New York at matuszewski@bloomberg.net

Last Updated: March 20, 2006 17:52 EST