How NFL Teams Make Money

How NFL Teams Make Money
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    The NFL has been a staple in American sports since 1920
    Even after the President condemned the NFL
    Your San Fransisco quarterback, I'm sure no body ever heard of him
    NFL owners don't want to pick them up because they don't want to get a nasty tweet from Donald Trump, you believe that
    Then there were the TV ratings that took a nosedive in 2016 and 2017
    But it's still proving to be a big success for all 32 NFL teams and their owners
    28 NFL teams are valued over $2 billion
    So how is it that these teams are worth so much?
    To answer that you have to look at how hard it is to start your own franchise
    The last time an NFL franchise was started was back in 2002
    It's rare to start a new NFL team but when it happens owners have to pay something known as a franchise fee
    Some NFL teams have been around since the National Football League started in 1920
    Back then the franchise fee was about 100 bucks
    By 1960, the Dallas Cowboys had to pay a million dollars to enter
    And in 2002 the Houston Texans, which are the newest team to join the league, paid $700 million
    Some NFL teams are still owned by the same families who started their franchise nearly a century ago
    The Chicago Bears were founded for $100 in 1920 by George Halas and as of 2018 the team is still in the family
    It's owned by his 95 year old daughter Virginia McCaskey and it's now worth an estimated $2.9 billion
    And let's say you want to buy your own NFL team, most recent sales have been in the billion dollar range
    The Buffalo Bills went for $1.4 billion and in 2018 the Carolina Panthers were sold for a record $2.2 billion
    So what kind of return are team's getting back from their billion-dollar investment?
    There's only one team we definitely know what they're making every year and that's the Green Bay Packers
    The Packers are non profit corporation, the only one in the league, so we have access to their annual filings
    They made $454.9 million in 2017
    The other 31 teams are privately owned but Forbes releases the valuation for all 32 teams across the league each year
    The values are based around each NFL team stadium along with revenue of historical transactions
    non NFL events held at the stadiums as well as purchase and investment offers for each team
    In 2017 Forbes said the Dallas Cowboys generated $864 million in revenue
    the New England Patriots made $593 million and the New York Giants made $493 million
    But a lot of that income isn't generated by the team itself, it actually comes directly from the NFL
    For the 2017/2018 season the NFL generated a revenue share of over 8 billion dollars from TV deals
    merchandising, and licensing deals
    That's known as the national revenue and no matter how well or how bad your team does
    teams split the national revenue evenly thirty-two ways
    Meaning teams around the league received more than $255 million from the NFL in 2018
    But that's just one way a team generates income
    There's also something called local revenue, that's everything a team generates itself
    For the 2017/2018 season the local revenue for the Packers made up about 43% of the team's total revenue
    Ticket sales and stadium attendance are part of the local revenue
    Not only do NFL teams make money on game day but they can also make money from non NFL events
    by renting out the stadiums for concerts, live events, and tours
    The Green Bay Packers spent more than $370 million to upgrade Lambeau Field including adding thousands of seats to the stadium
    Since renovations began back in 2010, the Packers have seen ticket sales jump from $48 million to $71 million
    But game attendance isn't the only source of revenue for teams
    There are also a lot of corporate sponsors
    Some teams like the Philadelphia Eagles have over 40 corporate sponsors
    In the 2017/2018 season the NFL sponsorship revenue totaled more than 1.3 billion dollars
    These sponsorship deals range from putting company logos on practice jerseys, renting out retail space and stadiums
    to landing the sole naming rights to NFL stadiums themselves
    The New York Giants and New York Jets share a stadium called MetLife Stadium
    And the asking price for the naming rights?
    Well according to the New York Times that deal's worth an estimated $19 million a year for 25 years
    Which remains one the highest naming rights deals in the NFL
    Teams may be generating hundreds of millions of dollars each year but there are a lot of expenses that come with it
    Of the $454.9 million that Green Bay Packers made in the 2017 and 2018 season
    More than $420 million dollars went to expenses
    Most of it went to player costs which made up $212.7 million that year
    Stadium upkeep, marketing, team costs, and general administrative costs totaled $208 million
    So after all the bills are paid, the Green Bay Packers are left with an operating the income of $38.5 million
    The Cowboys Patriots and Giants have huge expenses that eat up a large chunk of yearly revenue too
    The Cowboys' operating income is $365 million
    The Patriots is $235 million and the Giants is $149 million
    But not every NFL team is rolling in cash
    Some NFL teams find themselves strapped for money with large overhead costs for their teams
    Just take the Detroit Lions, the team had a total revenue of $361 million in 2017
    But according to Forbes, the team had an operating income of $4.1 million
    Another issue weighing down on the NFL, a drop in popularity among up-and-coming sports fans and players
    In the wake of the concussion debate, more than 67,000 fewer high schoolers are playing football today than in 2009
    But that controversy isn't affecting the NFL's bottom line
    It's still seeing revenue growth
    From the 2016 season to the 2017 season the NFL's national revenue grows nearly 5%
    The NFL is also seeing a boost in television ratings this season too
    In September the top 15 most watched TV shows were all NFL games
    Our Thursday night game, our first game on Fox and Amazon and NFL Network was up 8% last night
    You know, in '07, 22 of the top hundred programs were NFL games
    Then ten years later in '17, 72 of the top shows were NFL games
    So despite all the controversy it may be a while before NFL teams take a hit
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