The NFL has been a staple in American sports since 1920.Then there were the TV ratings that took a nosedive in 2016 and 2017.But it’s still proving to be a big success for all 32 NFL teams and their owners.28 NFL teams are valued over $2 billion.So how is it that these teams are worth so much?
Since 1920, the NFL has been a fixture in American sports. Then there were the TV ratings, which plummeted in 2016 and 2017. However, it continues to be a huge success for all 32 NFL teams and their owners. 28 NFL franchises are worth more than $2 billion.
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ITS HARD TO START YOUR OWN FRANCHISE
So, what is it about these teams that makes them so valuable? To answer that, consider how difficult it is to launch your own franchise. The last time an NFL franchise was established was in 2002. Starting a new NFL club is uncommon, but when it does happen, owners must pay a franchise fee. Some NFL clubs have existed since the National Football League’s inception in 1920. The franchise cost was around $100 at the time.
By 1960, the Dallas Cowboys had to pay a million dollars to join the league, and the Houston Texans, the league’s newest franchise, had to pay $700 million.
IT’S A FAMILY AFFAIR
Some NFL clubs are still held by the same families who formed them almost a century ago. The Chicago Bears were founded for $100 in 1920 by George Halas, and the team is still owned by the Halas family as of 2018. It is now held by his 95-year-old daughter Virginia McCaskey and is believed to be worth $2.9 billion. And, if you want to own your own NFL franchise, previous sales have been in the billions of dollars. The Buffalo Bills were sold for $1.4 billion, while the Carolina Panthers were sold for a record $2.2 billion in 2018.
So, how much money did the team earn back for their billion-dollar investment? There is just one club whose earnings we know year after year, and that is the Green Bay Packers. Because the Packers are the only non-profit business in the NFL, we have access to their yearly filings. In 2017, they earned $454.9 million. The other 31 clubs are privately owned, although Forbes publishes the league worth for all 32 teams each year.
The figures are based on each NFL club’s stadium, income from previous transactions, non-NFL events hosted at the stadiums, and buy and investment bids for each franchise.
WHERE THE BIG BUCKS COME FROM
However, a large portion of that revenue is earned by the NFL rather than the franchise. The NFL earned more than $8 billion in income through TV rights, merchandise, and licencing partnerships during the 2017/2018 season. This is known as the national revenue, and regardless of how well or poorly your team performs, the national money is divided thirty-two ways. It is, teams got more than $255 million from the NFL in 2018. However, that is only one method a team produces revenue.
LOCAL REVENUE
There’s also local income, which is whatever a team makes on its own. For the 2017/2018 season, the Packers’ local revenue accounted for around 43% of the team’s overall income. Ticket sales and stadium attendance contribute to municipal revenue. Not only do NFL clubs profit on game day, but they may also profit from non-NFL activities.
THE RENT INCOME
Rent income through leasing stadiums for concerts, sporting events, and tours. The Green Bay Packers spent more than $370 million to improve Lambeau Field, including the addition of thousands of seats. Since renovations began in 2010, the Packers’ ticket sales have increased from $48 million to $71 million. However, attendance during games is not the main source of money for teams. There are also several corporate sponsors. Some clubs, such as the Philadelphia Eagles, have more than 40 corporate sponsors.
The NFL’s sponsorship earnings was more than 1.3 billion dollars in the 2017/2018 season. These sponsorship agreements vary from putting business logos on practise jerseys to renting out retail space and stadiums to acquiring sole naming rights to NFL stadiums.
NAMING RIGHTS
MetLife Stadium is shared by the New York Giants and the New York Jets. And how much are the name rights worth? According to the New York Times, the arrangement is worth an estimated $19 million each year for the next 25 years. Which remains one of the most expensive naming rights deals in NFL history.
THE EXPENSES
Teams may generate hundreds of millions of dollars every year, but there are other expenditures that must be met. Green Bay Packers made $454.9 million in the 2017 and 2018 seasons. Expenses totaled more than $420 million dollars. The majority of it went to player costs, which totaled $212.7 million that year.
The overall cost of stadium upkeep, marketing, team expenditures, and general administrative charges was $208 million. After all bills are paid, the Green Bay Packers have an operating income of $38.5 million.
The Cowboys, Patriots, and Giants all have significant costs that consume a significant portion of their annual earnings. The Cowboys make $365 million in operational income.
The Patriots are worth $235 million, while the Giants are worth $149 million. However, not every NFL team is wealthy. Some NFL teams struggle to make ends meet due to high overhead costs. For example, the Detroit Lions had a total revenue of $361 million in 2017, but according to Forbes, the team had an operating income of $4.1 million.
DROP IN THE SPORTS POPULARITY
Another factor impacting on the NFL is a decline in appeal among aspiring sports fans and players. Following the concussion discussion, more than 67,000 fewer high school students play football today than in 2009.
However, the NFL’s bottom line is unaffected . Its revenue is still increasing.The NFL’s national income increased by roughly 5% between the 2016 and 2017 seasons.This season, the NFL is also witnessing an increase in television viewership. The top 15 most viewed TV programming in September were all NFL games.