We bet you know or at least could guess that our favorite National Football League (NFL) with the annual revenue reaching as much as $15 billion is the most profitable sports league in the USA (and in the whole world!). But do you know what lies behind the NFL’s success? We’ve outlined a few key points in order to understand the general picture better.
First off, it’s all about the superb broadcasting contracts, which reportedly produce most of the league’s total revenue. The fact that football is the most popular and the most-watched sport in the United States leaves TV companies with no other choice but to spend a whopping amount of money to be able to acquire the broadcasting rights. Just imagine that one of the biggest sporting events in the USA that is the Super Bowl was watched by 102 million viewers across the country this year.
Secondly, the NFL generates an income by signing merchandise license agreements. To put it simply, they sell other companies the right to use the NFL trademarks for their own purposes. Still, we should mention that such contracts are said to bring only a small portion of the overall NFL’s income especially compared to TV deals.
Aside from the abovementioned sources of income which are also commonly referred to as “national revenue”, there is so-called “local revenue”. Local revenue is mainly generated through ticket sales and concessions. While these undoubtedly play an important role for the NFL teams, the revenue they bring in is still incomparable with TV deals.
Ultimately, we can say that the NFL’s business model works perfectly but it doesn’t mean that the league isn’t looking into other prospective revenue streams. They are still working on expanding its TV market by securing even more deals. At the same time, they’ve started cooperating with streaming services and signed a few promising deals so far.