viernes, 2 de agosto de 2019

Business: Investopedia, How The NFL Makes Money

TV is the NFL's golden goose, but gambling and streaming show potential. 

  • By any measure, the NFL is the most successful American sports league in history. For all the talk of North America’s “Big Three” sports (or for hockey fans, Big Four), the reality is that there’s pro football, and then there’s everything else.
  • In 2015, in response to mounting criticism for its quickly growing revenue, the NFL gave up the tax-exempt status it had held since 1947. The league now exists as a trade association made up of and financed by its 32 member teams. 31 of these teams are owned individually, only the Green Bay Packers retains its non-profit status. 
  • The NFL earns the lion’s share of its money with TV deals. According to Statista, more than 50% of the league’s revenue came from TV deals in 2015, a year when the league made about $12 billion. Other revenue streams include ticket sales, merchandising, and licensing rights and corporate sponsorships.
  • Bloomberg estimates it earned around $15 billion during the 2018 season. This is up from estimates of $14.2 billion in 2017 and $13.3 billion in 2016. And the league is showing no intentions of slowing down. Commissioner Roger Goodell has targeted $25 billion in revenue by 2027, or 6% annual growth.

The NFL Business Model 

The NFL groups its revenue streams into two categories: “national revenue” and “local revenue.” 

National revenue consists of TV deals along with merchandising and licensing deals, which are negotiated at the national level by the NFL itself. This money is then divided evenly between the 32 teams regardless of individual performance. According to the Green Bay Packers’ 2018 annual report, the NFL earned over $8.1 billion in national revenue last year, meaning each team received about $255 million in national revenue from the league.

Local revenue, which consists of ticket sales, concessions, and corporate sponsors, is earned by the teams themselves. In 2018, the Packers earned $196 million in local revenue, 43% of their total revenue that year, which was $455 million.

Massive TV deals

Football is, hands down, the most-viewed sport in the U.S. Nineteen of the 20 most-viewed TV broadcasts in U.S. history are Superbowls of various years. In season, NFL games are broadcast live in the USA on Mondays, Thursdays, and Sundays. These games are consistently the highest rated shows on TV, so media companies have shelled out big bucks for the rights to broadcast them.

Future Plans 

TV Growth

Contrary to some claims, TV isn’t dying, at least not when it comes to football. The value of the NFL’s TV deals has skyrocketed in the last few decades; by all accounts, it will likely continue to do so. As a result, the NFL’s biggest focus for reaching its aspirational $25 billion in revenue by 2025 is continuing to secure bigger and bigger TV deals.


Although TV is still king when it comes to watching football, streaming is on the rise. In 2017, Verizon signed a new $2.5 billion deal with the NFL for five years of streaming rights. This is twice the size of the deal Verizon had with the NFL before. In April of 2018, Amazon signed a comparatively small deal of $130 million for two years of streaming rights. If the growth of TV deals in the last few decades are any indication, these deals will also continue to grow rapidly over the coming decades.


Although the NFL has always officially been against sports gambling, that is likely to change soon. In May, the Supreme Court decided to let states determine whether or not to legalize sports gambling. As of July, eight states have already fully legalized the practice, while seven more have passed bills to do so. A legislative wave has begun. To capitalize on this, the NFL could set up betting parlors in stadiums, partner with established casinos, set up online sports gambling portals, etc. The possibilities are vast and there is no way the growth-obsessed NFL won’t explore as many as it can.


Investopedia, How The NFL Makes MoneyJakob Eckstein,  Updated Jul 26, 2019.

Complementary content:

No hay comentarios.:

Publicar un comentario

Bienvenidos todos los comentarios respetuosos.