Individual Franchises:In 2013, the NFL had about $6 billion in revenues, split evenly (3.1% to each of the 32 teams, or about $187.7 million). With new media contracts set to begin, CBS, NBC, Fox and ESPN will pay $39.6 billion from 2014-2022, which will increase revenue for all. As such, over the past decade or so, franchise values have skyrocketed. Here's a comprehensive list from Forbes on the value of each NFL franchise:
The NFL franchise with the slowest year over year growth was the Arizona Cardinals at 4% and the fastest growing franchise was the New England Patriots at 44%. [Tweet "The Dallas Cowboys are valued at $3.2 billion versus 930 million for the St. Louis Rams"] Interestingly, the NFL is an unincorporated nonprofit 501(c)(6) association which means that the league office is not subject to income tax. That being said, each individual franchise (except the non-profit Green Bay Packers) is subject to tax because of their profitability. Where does all this money come from?
NFL Revenue Streams:
- TV rights: As mentioned before, the league is receiving (and splitting equally among franchises) $39.6 billion from 2014 to 2022. This sets a base revenue for each team that is already relatively high.
- Ticket Sales: On a franchise level, filling stadiums is huge. Despite attendance levels falling slowly, ticket sales represent about $51 million dollars per team on average. With the average NFL ticket costing the fan $84.43 and stadiums having a seating capacity anywhere between 50,805 (TCF Bank Stadium - Minnesota Vikings) and 82,566 (MetLife Stadium - New York Giants & New York Jets), ticket sales are a vital component of any NFL franchise.
- Venue Sales: Now that people are in the stadium, they are hungry and thirsty. As such, stadiums offer a unique opportunity to vendors and franchises alike. For example, the 49ers signed a $ 6.8 million a year deal with Centerplate to sell concessions in their new stadium, with $75,000 to $125,000 per NFC home playoff game added on. Incredibly, this doesn't include beer.
- Merchandising: What fan doesn't own his favorite player's jersey? Between that and team key-chains, hats, cups, socks, etc, NFL teams make quite a bit of money.
- Advertising & Sponsorships: With advertisers willing to spend $4 million for a 30 second spot in the Super Bowl, it's not a surprise that advertising is a huge part of the business model. Everything from stadium walls to the backs of ticket stubs are up for sale by teams, but when you take it to the league level, the official [insert any obscure industry name here] provider of the NFL carries a pretty fat price tag.
- Licensing: The NFL licenses everything - from trademarks to its intellectual property, if you want to use something that has anything NFL-related, be prepared to pay a premium for it.
Personnel Contracts & EndorsementsWith the league itself generating enormous revenues, where does that leave the people running the league and producing the product?
- League Executives: Roger Goodell, the league commissioner, made $ 74 million in 2013 and 2014 combined. Next up is the league's general counsel, Jeff Pash, who made $7.86 million in 2013. Executive vice president, Eric Grubman, landed $4.24 million. These are some pretty big salaries for a non profit.
- Team Executives: General Managers generally make $1-3 million a year and vice presidents anywhere between $180,000-$400,000. For a complete list, click here.
- Referees: Salary here depends on seniority, but on average in 2014, Referees will make $173,000 for what amounts to a few week's of work (20 three hour games during the season, plus training sessions).
- Players: The average NFL salary sits at $2.1 million a year with a career lasting on average 3 years. That being said, the league's highest players get paid much more than that. Here's a list of the top 10 earners in 2014 according to Forbes:
- Matt Ryan ($43.8 million. $42m from his salary and $1.8m from endorsements)
- Matthew Stafford ($33 million. $31.5m from his salary and $1.5m from endorsements)
- Peyton Manning ($27.1 million. $15.1m from his salary and $12m from endorsements)
- Darrelle Revis ($23.8 million.$23m from his salary and $800k from endorsements)
- Geno Atkins ($22.4 million. $22.3m from his salary and $50k from endorsements)
- Aaron Rodgers ($22 million. $14.5m from his salary and $7.5m from endorsements)
- Joe Haden ($21.4 million. $21.2m from his salary and $150k from endorsements)
- (tie) Drew Brees ($21 million. $10m from salary and $11m from endorsements)
- (tie) Eli Manning ($21 million. $13.5m from salary and $7.5 from endorsements)
- Julius Peppers ($20.8 million. $20.4 from salary and $400,000 from endorsements)
[Tweet "Matt Ryan, Atlanta's starting QB, is making $43.8 million this year!"] Overall, the league has a salary cap per team of $133 million that guarantees the players receive 55% of the television money. As such, average salaries increase as the revenues increase.
NFL SponsorsIncredibly, sponsorship money accounted for $ 1.07 billion of the NFL and its 32 teams' revenue in 2013. Gatorade sponsors all NFL properties, Anheuser-Busch InBev sponsors 88% of all properties and TicketMaster sponsors 67%.
The NFL compared to the NBAThe NFL is much, much larger than the NBA, despite only having a 16 game schedule as opposed to an 82 game schedule. Key Comparisons:
- Biggest Franchise Value: New York Knicks at $1.4 billion (although we all know that the LA Clippers commanded a $2B price tag this past Spring following the Donald Sterling debacle), compared to the Dallas Cowboys at $3.2 billion. Subsequently, the Knicks had a 2014 revenue of $287 million, compared to the $560 million generated by the Cowboys.
- TV Deal: The average annual revenue from pacts with ESPN/ABC and TNT is $930 million, compared to around $4 billion yearly for the NFL. However, the current NBA deal is set to expire soon, with revenues expected to increase. Additionally, teams are allowed to make their own local deals, such as the Lakers who signed a 20 year $3.6 billion deal with Time Warner Cable. This is because not all games are televised nationally due to the sheer amount of games a week.
- Player contracts & endorsements: This is where it gets interesting. Since the NBA is much more marketable abroad, NBA stars receive more in compensation than NFL stars. The average salary is much higher than the NFL at $5 million a year. Here's a look at the top 5 salaries in 2014 according to Forbes:
- Kobe Bryant ($64.5 million. $30.5m in salary, $34m in endorsements).
- Lebron James ($61.1 million. $19.1m in salary, $42m in endorsements).
- Derrick Rose ($38.6 million. $17.6m in salary, $21m in endorsements)
- Kevin Durant ($31.8 million. $17.8m in salary, $14m in endorsements)
- Dwayne Wade ($30.7 million, $18.7m in salary, $12m in endorsements)
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