How Do NFL Teams Make Money?
Fans want to know how their favorite NFL teams make money. Here’s a look at the various ways NFL teams generate revenue.
How NFL Teams Make Money
NFL teams make money through a variety of different ways. They generate revenue through ticket sales, corporate sponsorships, merchandise sales, and television contracts. NFL teams also receive a portion of the league’s revenue sharing plan. In this article, we’ll take a look at how all of these revenue streams work.
Revenue from National and Local TV Contracts
The revenue that NFL teams generate from national and local TV contracts is the lifeblood of the league. In 2017, the NFL generated $7.8 billion in revenue from national TV contracts with ESPN, NBC, CBS and FOX. This is an increase of $500 million from the previous year.
Local TV deals can be just as lucrative for NFL teams. The Dallas Cowboys, for example, generate more than $250 million per year from their local TV contract with FOX affiliate KDFW. The New England Patriots generate nearly $200 million per year from their local TV contract with CBS affiliate WBZ-TV.
Revenue from Ticket Sales
Ticket sales are a major source of revenue for NFL teams. According to a report from ESPN, the average NFL team generated $43 million in ticket revenue in 2015. That figure includes both home and away games.
ticket prices have increased significantly in recent years. In 2006, the average ticket price was $62. In 2016, the average price had risen to $102. However, there is a wide range of ticket prices across the NFL. The most expensive tickets are for games played by the New England Patriots, who had an average ticket price of $117 in 2016. The least expensive tickets are for games played by the Cleveland Browns, who had an average ticket price of just $53 in 2016.
Teams also generate revenue from luxury suites and club seats. Suite rentals can cost tens of thousands of dollars per game, and club seats can cost hundreds of dollars per game.
Revenue from Merchandise Sales
One of the NFL’s key sources of revenue is from merchandise sales. The league generates billions of dollars in revenue from the sale of jerseys, t-shirts, hats, and other licensed products bearing the logos and colors of NFL teams. In fact, according to a study conducted by Forbes, the NFL is the most lucrative sports league in the world when it comes to merchandise sales.
Revenue from Sponsorships
Sponsorships are a big part of NFL teams’ revenue. Companies will pay to have their name on the stadium, on the team’s website, or on their uniform. For example, in 2014, the Seattle Seahawks sold the naming rights to their home stadium to CenturyLink for $75 million over 25 years. The New England Patriots have a website sponsorship from ExxonMobil, and the Green Bay Packers sell space on their helmets to sponsors.
Even though ticket prices have increased over time, they make up a small percentage of total revenue for an NFL team. In the 2014 season, tickets generated $1.2 billion in revenue, which was only 8% of the NFL’s total revenue that year.
How the NFL Makes Money
The NFL is a multi-billion dollar industry that generates a significant amount of revenue from various sources. The majority of the League’s income is derived from television contracts, ticket sales, and merchandising. In addition, the NFL also generates income from sponsorships, licensing, and radio and internet rights.
Revenue from National and Local TV Contracts
The NFL generates a large portion of its revenue from TV contracts, both from national broadcast networks and from local stations. In 2014, the league signed a nine-year, $27 billion deal with ESPN, CBS, NBC, and Fox. This replaced the previous eight-year, $20.4 billion contract and represented a significant increase in rights fees.
On top of that, the NFL also earns tens of millions of dollars from local TV contracts. These are agreements between the league and individual stations in each market that air NFL games. The amount of money that the NFL receives from these contracts depends on the size of the market and on how well the team is doing. For example, in 2014, the Dallas Cowboys were the most valuable franchise in the league and generated $620 million in revenue. A large portion of that came from their local TV contract, which was worth an estimated $140 million per year.
Revenue from Ticket Sales
NFL teams generate revenue from ticket sales for their home games. The average price of an NFL ticket was $93.94 in 2017, but prices can vary greatly depending on the team and the seat location. For example, tickets to see the New England Patriots play at Gillette Stadium cost an average of $362.94, while tickets to see the Buffalo Bills play at New Era Field cost an average of $77.94.
In addition to ticket revenue, NFL teams also generate revenue from concessions, parking, and other in-stadium sources. Concessions revenues vary widely by stadium, but the average price of a beer at an NFL game was $7.50 in 2017, and the average price of a hot dog was $5.00.
Revenue from Merchandise Sales
One of the ways in which NFL teams make money is through revenue from merchandise sales. This includes sales of jerseys, caps, t-shirts, and other officially licensed products bearing the team’s logo and colors. The NFL also generates revenue from the sale of collectibles, such as footballs and other memorabilia.
Teams generate additional revenue from corporate sponsorships and advertising. Many companies purchase advertising space on team websites or on billboards and other signage at the team’s stadium. Some companies also sponsor special events, such as NFL player appearances or tailgating parties before games.
Revenue from Sponsorships
The NFL’s popularity has made it a prime target for sponsorships. Fromjersey sponsorships to stadium naming rights, the league generates a significant portion of its revenue from businesses looking to tap into its large and passionate fan base.
Jersey sponsorships are one of the most visible and lucrative forms of sponsorship in the NFL. In 2018, the league generated $1.8 billion in revenue from jersey sponsorships, up from $1.6 billion the year before. The Dallas Cowboys are the most valuable team in the NFL, in part due to their 10-year, $500 million deal with jersey sponsor AT&T. Other notable jersey sponsorship deals include Microsoft’s partnership with the Seattle Seahawks and Bose’s sponsorship of the New England Patriots.
In addition to jersey sponsorships, businesses can also purchase naming rights to stadiums and other facilities used by NFL teams. For example, MetLife Stadium—home to both the New York Giants and New York Jets—was originally named Giants Stadium before MetLife bought the naming rights in 2011 for an undisclosed sum. In 2017, there was also a shift in stadium naming rights when Mercedes-Benz agreed to pay an estimated $20 million per year for the next 27 years to have its name on the home of the Atlanta Falcons.
How Players Make Money
Football players make a lot of money. The average NFL player salary is $2.7 million per year, with a median salary of $860,000. However, not all of that money comes from their football contracts. In fact, only a small portion of their income is derived from playing football. The majority of their income comes from endorsements and other sources.
Revenue from National and Local TV Contracts
The revenue generated from national and local television contracts is the lifeblood of the NFL. In 2014, the league brought in a staggering $7.2 billion in revenue from these contracts alone. This figure is only expected to rise in the coming years as the NFL continues to be one of the most watched programming on television.
Revenue from Ticket Sales
Ticket prices for an NFL game has increased significantly over the years. In 2009, the average price of an NFL ticket was $76.13. In 2019, the average price of an NFL ticket was $154.81. Prices will continue to increase as demand for tickets rise. The Packers, for example, have been selling out every game since 1960.
According to Forbes, the Packers generated $148 million in revenue from ticket sales in 2017. The Super Bowl champions, the New England Patriots, generated $186 million in revenue from ticket sales in 2017. The Dallas Cowboys, who have the highest average ticket price in the NFL, generated $339 million in revenue from ticket sales in 2017.
The amount of revenue that a team generates from ticket sales depends on the team’s popularity, success, and location. Teams that are located in large markets and have a loyal fan base generate the most revenue from ticket sales.
Revenue from Merchandise Sales
Player jerseys are generally the best-selling items. In 2012, Peyton Manning’s Broncos jersey was the NFL’s best seller, followed by Tom Brady’s Patriots jersey, Drew Brees’ Saints jersey, and Eli Manning’s Giants jersey. According to Darren Rovell of ESPN, an average NFL player jersey costs $100 and is sold in 60 different countries. The NFL reports that a fifth of its fans are international.
Rovell also reports that the NFL made $1.2 billion in revenue from official merchandise sales in 2013. This figure does not include revenue from unofficial merchandise such as t-shirts, hats, and other items sold by non-licensed vendors. The NFL does not release data on how much revenue it generates from unofficial merchandise sales, but it is safe to say that the total figure is much higher than $1.2 billion.
Revenue from Sponsorships
In addition to the revenue they generate from ticket and merchandise sales, NFL teams also bring in money from sponsorships. These deals can be worth millions of dollars to the team, and the amount of money a team receives from sponsorships can vary greatly from year to year. In 2015, for example, the Dallas Cowboys were the most valuable team in the NFL, in large part due to their $315 million in annual sponsorship revenue. By contrast, the Tampa Bay Buccaneers had sponsorship revenue of just $92 million that same year.
