Football is finally back, which marks the return of a number of our favorite things: beer, barbecues, tailgating, fantasy football, cheerleaders, and… tremendous cash injections for the U.S. economy. Although it is not considered “America’s Pastime,” the National Football League (NFL), not a public company, is easily the most profitable professional sports institution in America.
The NFL earned about $10 billion in revenue last year, compared to the MLB’s $8 billion and NBA’s pitiful $4.56 billion. Approximately $5 billion is earned via media rights deals with television companies, and through partnerships with some of the most prominent names on Wall Street. Additionally, you’ve probably noticed the numerous, not-so-subtle NFL advertisements that plague television audiences. Although you may hate them, the NFL doesn’t care. Last year, the NFL generated $1.07 billion in revenue from sponsorships, including a $400 million deal with Microsoft (MSFT) that made the software giant the exclusive “sideline” technology provider of the NFL (all games now feature Microsoft Surface Tablets in the hands of both players and coaches). However, one of the NFL’s largest individual partnerships is with DirecTV (DTV). The television provider is in the final year of its four-year, $4 billion deal that permits the company to air all games to its customers, regardless of locational jurisdiction. Since DirecTV has since been acquired by AT&T (T), the new conglomerate and the NFL are now constructing a deal expected to exceed $4 billion. Bud Light, owned by Anheuser-Busch InBev (BUD), paid $1.2 billion in 2011 to be the official beer of the NFL for the next six years. The NFL will also earn $42 billion from its current deals with NBC, CBS, FOX, and ESPN (DIS); yes, Disney owns ESPN.
It’s important to note that, for as much money as television and media companies invest in NFL partnerships, the broadcasts generate an equal amount of advertising revenue for these companies. Not to mention NFL programming generates an unbeatable amount of product exposure, especially during the Super Bowl (advertisements are priced at a cool $133,000 per second).
Not only does the NFL earn the most money out of all professional American sports organizations, it also has the largest financial impact on the American economy. According to a 2011 analysis, prepared by Edgeworth Economics, regular season football games add $5 billion to the economies of cities with NFL teams. This multi-billion dollar boost comes courtesy of dedicated fans who invigorate local economies during game day. Their impact can be measured by increased hotel bookings, bar and restaurant attendance (within the city and surrounding towns), sporting goods sales, and concession vendors (to name a few); the football season supports about 110,000 jobs within these NFL cities.
In 2010, NFL commissioner Roger Goodell stated that he wants the league’s annual revenue to exceed $25 billion by 2027. If the current state of the NFL’s financial situation, and not its player conduct policies, is any indication of the future, Goodell should have no problem reaching his goal within the next 13 years.