Quicklinks: Summary, products and services, successful companies | Income and profitability | Expenses | History, strategy and challenges
Summary, products and services
Summary of the NFL club business: how do NFL clubs work? How do they make money?
The National Football League (NFL) is a professional American football league. It is made up of 32 teams, each of which plays 16 games during the regular season. The NFL is the highest level of professional football in the United States and is one of the four major professional sports leagues in the country, the other three being Major League Baseball, the National Basketball Association, and the National Hockey League.
The league was founded in 1920 as the American Professional Football Association (APFA) before renaming itself the National Football League for the 1922 season. The NFL clubs are the heart of the NFL business. Each club is its own business, with its own management, players, and staff. The clubs are responsible for generating their own revenue and for paying their own expenses. The NFL does not operate or control the clubs, and each club is free to set its own business strategies.
The NFL clubs generate revenue from a variety of sources, including ticket sales, concessions, merchandise sales, sponsorships, and television contracts. The clubs use this revenue to pay for their operating expenses, such as player salaries and benefits, stadium rent, and team travel. The clubs also use a portion of their revenue to pay the NFL a fee for the right to play in the league. The typical products or services offered by NFL clubs include tickets to home games, merchandise, and concessions. NFL clubs also offer a variety of sponsorship opportunities.
List and description of the five most successful companies in the NFL club business. How big are they and what is their market value?
- The Dallas Cowboys are the most valuable NFL franchise, worth an estimated $4.8 billion. They are also the most profitable team, generating an estimated $365 million in annual revenue. The Cowboys have been one of the most successful teams on the field, winning five Super Bowls. They also have a large and loyal fan base, which has helped them to sell out every home game since 2002.
- The New England Patriots are the second most valuable NFL franchise, worth an estimated $3.7 billion. The Patriots have been one of the most successful teams of the past decade, winning three Super Bowls. They also have a large and loyal fan base, which has helped them to sell out every home game since 2002.
- The Washington Commanders are the third most valuable NFL franchise, worth an estimated $3.1 billion. The Redskins have a long history of success, winning five Super Bowls. They also have a large and loyal fan base, which has helped them to sell out every home game since 2002.
- The New York Giants are the fourth most valuable NFL franchise, worth an estimated $2.8 billion. The Giants have won four Super Bowls and have a large and loyal fan base.
- The San Francisco 49ers are the fifth most valuable NFL franchise, worth an estimated $2.7 billion. The 49ers have won five Super Bowls and have a large and loyal fan base.
Income and profitability
List of the top three sources of revenue for NFL clubs (AKA how do they make money?) – including percentages of income and examples in US dollars for each
- Television Rights: The NFL generates the vast majority of its revenue from television rights, which are the fees charged to networks in exchange for the right to broadcast games. In 2011, the NFL signed a nine-year, $27 billion television contract with CBS, FOX, NBC, and ESPN. This works out to an average of $3 billion per year, or about 60% of the league’s total revenue.
- Ticket Sales: Ticket sales are the second largest source of revenue for the NFL. Each team plays eight regular season home games, and the average ticket price in 2018 was $102.50. That works out to an average of $8.2 million in ticket revenue per team per season.
- Licensing and Merchandising: The NFL generates revenue from the sale of licensed products, such as jerseys, hats, and other merchandise. The league also generates revenue from the sale of broadcast rights to its games to foreign countries. In 2017, the NFL generated $1.6 billion in revenue from licensing and merchandising.
Pricing: What are average prices among NFL clubs
NFL ticket prices vary widely depending on the team and the location of the game. For example, tickets to see the New England Patriots play at Gillette Stadium in Foxborough, Massachusetts, can cost as much as $700 for a seat in the upper deck. Tickets to see the Miami Dolphins play at Hard Rock Stadium in Miami Gardens, Florida, on the other hand, can cost as little as $50 for a seat in the upper deck.
The cost of attending an NFL game also varies depending on the day of the week. Tickets for games played on Sundays are typically more expensive than tickets for games played on weekdays. Tickets for games played on Monday Night Football are usually the most expensive tickets of the week.
The cost of an NFL ticket also varies depending on the time of year. Tickets for games played during the regular season are typically more expensive than tickets for games played during the preseason. Tickets for playoff games are usually the most expensive tickets of the year.
Here are three examples of NFL ticket prices:
- High-end: Tickets to see the New England Patriots play at Gillette Stadium in Foxborough, Massachusetts, can cost as much as $700 for a seat in the upper deck.
- Mid-market: Tickets to see the Miami Dolphins play at Hard Rock Stadium in Miami Gardens, Florida, can cost as little as $50 for a seat in the upper deck.
- Low-end: Tickets to see the Cleveland Browns play at FirstEnergy Stadium in Cleveland, Ohio, can cost as little as $10 for a seat in the upper deck.
What are the profit margins in the NFL club business? In a percentage range.
The National Football League (NFL) is a professional American football league. The NFL is the highest level of professional football in the United States, and the world’s richest sports league, by revenue. The NFL’s 17-week regular season runs from the week after Labor Day to the week after Christmas, with each team playing 16 games and having one bye week.
Following the conclusion of the regular season, six teams from each conference (NFC and AFC) advance to the playoffs, a single-elimination tournament culminating in the Super Bowl, which is usually held in the first Sunday in February and is played between the champions of the NFC and AFC.
The average NFL club is worth $2.34 billion, according to a new report from Forbes. That’s up 12% from last year and a whopping 545% since the magazine began tracking team values in 1998. The Dallas Cowboys are the most valuable franchise in sports, worth an estimated $4.8 billion. The New England Patriots are second at $3.7 billion, followed by the Washington Redskins ($3.1 billion), the New York Giants ($3.0 billion) and the San Francisco 49ers ($3.0 billion).
The NFL generates about $9.5 billion in annual revenue, and operating income (earnings before interest, taxes, depreciation and amortization) for the league and its 32 teams totaled $1.85 billion last season. That means the average NFL team generated about $58 million in operating income last year.
The Cowboys, Patriots, Redskins, Giants and 49ers were the most profitable teams in the NFL last season, each generating more than $100 million in operating income. The least profitable team was the Jacksonville Jaguars, who lost $51 million.
Overall, the NFL had an operating income of $719 million last season on revenue of $13 billion. That works out to an operating margin of 5.5%. For comparison sake, the NBA had an operating income of $600 million on revenue of $5.9 billion last season, for an operating margin of 10.1%. Major League Baseball had operating income of $500 million on revenue of $9.5 billion, for an operating margin of 5.2%.
So while the NFL is the most valuable sports league in the world, it is not the most profitable. That distinction goes to the NBA. But the NFL does generate more revenue than any other sports league. And its teams are more valuable than any other sports franchise.
Expenses
What is the cost to build a NFL club business? With an example.
The cost to build a NFL club business can vary depending on the size and location of the business. For example, a small NFL club business in a rural area may cost less to build than a large NFL club business in a major city. The cost of land, construction, and equipment can also affect the cost of building a NFL club business.
According to Forbes, the average cost of building an NFL stadium is $1.1 billion. The cost of land and infrastructure can vary greatly depending on the location of the stadium. For example, the new Los Angeles Stadium at Hollywood Park is estimated to cost $2.6 billion, while the new Las Vegas Raiders Stadium is estimated to cost $1.9 billion.
In addition to the cost of building the stadium, there are also other costs associated with starting a NFL club business. These costs can include player salaries, marketing and advertising expenses, and operational costs.
List and description of the top three ongoing expenses for NFL clubs. What percentage does each represent?
- Player Salaries and Bonuses: In 2019, the average NFL player salary was $2.1 million. The minimum salary for a player with 0-2 years of experience is $585,000, while the minimum for a player with 3 or more years of experience is $950,000. Players also receive signing bonuses when they first join a team, and these can be worth millions of dollars.
- Stadium Maintenance and Upkeep: NFL stadiums are some of the largest and most expensive in the world. The average stadium costs $1.1 billion to build, and then there are ongoing costs for things like maintenance, security, and utilities.
- Travel: Because the NFL is a national league, teams have to travel all over the country to play their games. This can be expensive, especially if teams have to fly long distances for away games.
History, strategy and challenges
What is the history of the NFL club business? With examples for each continent of the world.
The first professional American football club was formed in 1892, and the first American Football League was founded in 1920. The National Football League was formed in 1922, and the first Super Bowl was played in 1967.
The NFL has seen its share of challenges in recent years. In 2012, the league was embroiled in a scandal involving the use of performance-enhancing drugs. In 2015, the league was criticized for its handling of domestic violence cases involving players.
Despite these challenges, the NFL club business remains one of the most popular and profitable businesses in the world. In 2018, the league generated $8.1 billion in revenue. The Super Bowl is the most watched sporting event in the United States, and the NFL is the most popular sports league in the country.
