5 Facts About the Business of the NFL
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Football is not only the most popular sport in America (when measured by average viewership of a game); it is also far and away the most profitable. The National Football League routinely generates several billion dollars more than Major League Baseball, despite the latter’s status as “America’s Pastime.” For a sport with an average of 11 minutes of genuine play during an hour long contest, the money associated with the NFL—including the revenue potential of advertising affiliates, concession sellers and associated merchandising and memorabilia—is almost hard to fathom.
5 Ticket Sales Are Far From the Main Revenue Source
Each NFL team generates a little more than $50 million a year in ticket sales. With 32 teams in the league, that comes out to around $1.6 billion dollars a year! And while that’s a lot of money, it accounts for well under 20% of total annual revenue. Merchandising of all kinds, including hats, beer cozies, jerseys, accounts for more than $2 billion of revenue. Add to that the concessions sold at games (beer, burgers, nachos) and you have several hundred million more dollars. Advertising is of course a huge moneymaker, generating some $3 billion a year for the league. But for football, a game most fans watch on TV, it is licensing that rules the day: in late 2011, the NFL signed a deal with the major broadcasters (FOX, NBC, CBS) worth close to $30 billion over the course of nine years.
4 Only a Small Percentage of Pink NFL Merchandise Revenue Helps Cancer Research
You know all that pink you have been seeing in NFL games recently? Pink pompoms in the hands of cheerleaders, pink arm bands on refs and quarterbacks alike, pink cleats and so on? That’s all to raise awareness of and cash to fight breast cancer. Fans are invited to get in on the action as well, with loads of pink NFL merchandise for sale. But apparently only around 8% of the money raised by this campaign ever finds its way to researchers actually fighting to treat and prevent this terrible disease! (For the record, the NFL siphons off a 25% royalty, and the rest of the gap has to do with how the American Cancer Society spends money internally.)
3 The NFL Will Generate More Than $9 Billion This Year
The NFL stands to reap more than $9 billion of revenue this year, but National Football League commissioner Roger Goodell thinks the league can do much better. In fact, Goodell would like to see nearly triple that amount of cash annually. And he thinks the NFL can get there within 15 years. By renegotiating broadcast rights in the early 2020s, by establishing a new collective bargaining agreement with players and coaches and by exploiting new online and mobile platforms, Goodell projects annual revenue around $25 billion by the year 2027.
2 The Cowboys Are Footballs Most Valuable Team
Forget about a team’s MVP for a minute and instead consider a league’s Most Valuable Team. The Dallas Cowboys wear the crown in that arena: the team is worth an estimated $2.3 billion dollars. That is not their annual revenue, of course, which is a gross of around $540 million a year. But the franchise’s inherent value (and theoretical sale price) sets it above not only other NFL teams, but above most sports outfits worldwide: even most the world’s prominent soccer teams are worth less than half of the Cowboy’s price tag.
1 Commercial Airtime at Super Bowl XLVIII Will Set Records
When Super Bowl XLVIII (that’s number 48) airs on February 2nd, 2014 a thirty second commercial is slated to cost four million dollars. That means advertisers like Budweiser and Hyundai will be paying Fox Sports more than one hundred thirty three thousand dollars for each and every second of airtime during the game’s commercial breaks. That’s an increase of 100 times more than commercials cost during Super Bowl I back in 1967.