Inside the NFL's Money Machine

Author:
SI Staff
Publish date:
Mar 11, 2011

Inside the NFL's Money Machine

Gross Football Product

Just how lucrative is the NFL? While the league won't divulge exactly how its $9.3 billion pie breaks down (a sticking point in the ongoing labor talks), the figure nearly equals the estimated revenues of major league baseball ($6 billion to $7 billion), the NBA ($3 billion to $4 billion), and the NHL ($1 billion) combined. Sports Illustrated and Fortune crunched the numbers to provide an unprecedented look at the game's GFP (gross football product). Here are some of the major drivers behind the booming football economy.

Broadcast Rights

Annually, the NFL redistributes upwards of $4 billion in radio, TV and digital earnings across its 32 teams -- $125 million a piece, plus an equal share for the league -- and that number shows no sign of declining. The 19 highest-rated fall TV programs (and 28 of the top 30) were NFL games, and this year's Super Bowl was the most-watched program ever. ESPN pays $1 billion per season (18 games). DirecTV pays $1 billion per season (8 games plus NFL Sunday Ticket). Fox pays $712.5 million per season (102 games). NBC pays $650 million per season (18 games). CBS pays $622.5 million per season (102 games).

Stadium Sponsorships

As more and more teams build new stadiums (the most recent being the New Meadowlands Stadium in 2010, Cowboys Stadium in 2009, and Lucas Oil Stadium in 2008), corporations will pay big to have their name attached to the venue. Teams can collect as much as $25 million to $30 million for stadium naming rights, usually on 10-year deals. Experts say huge pacts may be the way of the past, and have lost their efficacy for the paying corporation, but at least one exception exists in LA: Farmers Insurance has promised to pay $700 million over 30 years to name an L.A. stadium for a team that doesn't exist yet. Reliant Energy pays $10 million per year for stadium naming rights with the Texans (pictured).

Corporate Sponsorships

From credit cards to cameras, from auto makers to pizza, companies pour money into the league's coffers for the right to associate their brands with the NFL. Among those pouring are Pepsi ($560 million over eight years, starting in 2004) and Gatorade ($45 million a year, plus marketing costs and free Gatorade for teams). Nike paid $1.1 billion to land the NFL's apparel sponsorship. Previous partner Reebok had been moving $350 million annually in NFL gear. Verizon paid $720 million over four years to be the NFL's wireless provider. The league will see $700 million in cash from its $1.2 billion, six-year deal with beer sponsor Anheuser-Busch--but teams still cut their own deals when it comes to pouring rights at individual stadiums.

Tickets and Concessions

In 2010 more than 17 million fans passed through NFL turnstiles, paying anywhere from $54.51 (Browns) to $117.84 (Patriots) for the average game ticket. Though the league won't open its books, numbers for the publicly-held Packers offer some insight into what teams reap at the ticket office and concession stands. The Packers reaped $13 million from concessions, parking and local media in 2010, which figures to about $416 million NFL-wide. Green Bay also cleared $60 million from home and away game tickets plus private boxes. Projected over 32 teams, that's close to $2 billion. Attendance at Packers games dropped 0.81% from 2009 to 2010.

Halo Effect

Pro football doesn't just produce cash for the NFL. Local economic activity generated by a single NFL game is estimated at $20 million to $21 million. Over eight home games -- excluding preseason and playoffs -- that's $160 million per year per market and $5.1 billion total earned by peripheral businesses. Says Dan Neely, CEO of Networked Insights: "The NFL is like Procter & Gamble (PG). There's the holding company, the core operation, but then each brand has its own team and world of revenue. Like Tide: that's a P&G product but within that there are different types of Tide and a number of people that make money from it. So the $9.3 billion pie just scratches the surface and doesn't get into how much money is spent around stadiums, merchandise, agents, all the way down to mom-and-pop shops."