The Republicans held a midterm convention, but many of the analysts said who was going to watch it? because it was the start of the NFL season. If you examine the top 10 highest rating TV shows – most are football related. Football on TV or streaming drives a great number of people to watch it. If you cannot watch the game, the next morning highlights are available. How does a team make money?
A You Tube channel called firstteamfootball did an analysis and it breaks down it a number of parts:
All teams in the NFL belong to a National Revenue Pool or money from national advertising is pooled or shared or the billionaire team owners are involved in a socialist enterprise. In 2026, before the ball is snapped, all teams receive a check for the league for $346 million per club. The revenue sharing ensures all clubs no matter the city size should be competitive or On Any Given Sunday … (a football movie staring Al Pacino).
The National Revenue Pool receives advertising money from the ABC, CBS and NBC. They also receive money from streaming services such as Amazon Prime for Thursday night football and they paid $11 billion for 11 years. Then Amazon Prime has Black Friday games which allows them to integrate shopping into watching the game. Netflix paid $150 million for Christmas double headers to advertise their next season and sell ads.
Local revenue – 34% of ticket sales is shared with the league, luxury suites are not shared. A typical game seat is $150 which a luxury box can easily rent out for $25,000 a game. Premium seating is less than 20% capacity but over 50% of local revenues.
The building of the stadium is partially offset by local taxes (typically on hotels) and tax-free municipal bonds. The average new stadium, the owner pays 25% of the costs. That 73% of the costs translated to $33 billion. In addition, for the new stadiums, the owners add an entertainment area where there are clubs and hotels and gathering spots for fans without tickets. (it can be fun, but you have to stand for the game and it is much less expensive than going in). The average fan buys $42 worth of food and drinks per person. It can easily add up to between $778 to $1500 for a family of four.
If you go to a game often times you see many people wearing the team jersey. How the money flow is depends on where you buy. If you buy online (managed by Fanatics) it goes to revenue sharing. If you buy at the stadium (17% of sales), it is local money. This means and implies different strategies to capture the spending.
The licensed apparel market is estimated to be in the $3.5 billion in revenue. The gross profit margin will be 50 to 60%. It is also important to note companies such as Nike and Fanatics pay up front fees, plus a 12-15% royalty deal. The money goes in the National Revenue Pool.
Advertising revenue is expected to grow at 8% this year and that includes the official partner status. Microsoft co-pilot is the official AI software of the league. The naming of the stadium is between $20 and $30 million per team per year.
The biggest new source of revenue is online gambling which is estimated to be $120 billion a year and the NFL partnered with two companies FanDuel and Draft Kings.
If the team wins the championship what typically happens is high demand for season tickets; more local sponsorship money and a higher valuation of the team.
There are other factors such as player salaries caps, rookie salary numbers, if a team spends too much money they get penalized in order to make the league competitive.
Linking to dividend paying stocks, the product or service is what keeps consumers coming back to use the product or service, but it is helpful to know how your companies make money. It that way, as you watch how the company performs you know what to look for. To continuing doing your homework.
There are more questions than answers, till the next time – to raising questions.
