The following column is courtesy of NFL Draft Bible’s Ric Serritella, who has previously written on tech issues for Succeed in Football and also is a contributor to NFL Draft Scout.
When it comes to sponsorships and generating new revenue streams, the NFL reigns supreme. Despite its controversies (CTE, anthem protests, blown calls that affect Super Bowl participants and more) the league continues to produce ‘must-see TV’ up to four nights weekly.
Consider this: the four highest-rated TV programs in 2018 were Super Bowl LII, the Super Bowl LII post-game, the NFC Championship and NFC divisional round playoff game.
For more, let’s rewind to the year 2010. NFL commissioner Roger Goodell addressed ownership during league meetings in Orlando, with the declaration that the NFL plans to earn $25 billion per year in revenue by the year 2027.
That’s correct. $25 billion. A ‘b,’ not an ‘m.’
At the time, it seemed like a lofty goal and a long way off, as the entire league had just taken in $8.35 billion in revenue that year. The plan was to generate an additional billion dollars in revenue each year, and as we approach the end of the 2018 season, it now appears that the league might get there even sooner than expected. While official numbers have yet to be released for 2018, revenue is expected to be nearly double that figure from eight years ago, according to this chart.
One big reason for the spike in revenue is the Thursday Night television package rights. In 2016, the NFL increased its TV deal with CBS and NBC to $450M, up from the $300M package sold in 2014. Last January, it was announced that FOX will pay $3 billion over the next five years for the new deal. That is quite a significant increase in a short period time. It’s also roughly $21M in revenue for each NFL owner every year, just from TNF alone.
When the next round of TV packages are put up for bids, negotiations could mirror a scene from the Wild West. New players such as Twitter, Facebook, Amazon and others will be chomping at the bit to secure NFL television licensing rights.
Another factor in the NFL’s rising revenue stream is in this latest report by IEG Research, which states that total sponsorship spending on the NFL and its 32 teams rose 5.1% to $1.39 billion in the 2018-2019 season. A big reason for the spike in sponsorship revenue is the league’s changing attitude toward gambling and fantasy sites. The NFL recently struck a deal with Caesars Entertainment to become the league’s first-ever official casino partner. The deal is reportedly worth $30 million per year. According to IEG’s findings, additional growth was also driven by a spate of new league-wide sponsorships including Intuit, McDonald’s, Pizza Hut and Sleep Number.
From a category perspective, beer companies were the biggest NFL investors, spending 4.3 times more than any other category. Autos and telecoms spent 4.0 times more, while soft drink and technology companies spent 2.9 times as much on football than any other sports category.
The most invested brands were Ticketmaster, which has sponsorships with 100% of NFL Properties. Next up is Budweiser/Bud Light at 88% of the league; Gatorade works with 79% of teams, Microsoft 73%, and Bose 70%. With the NFL increasing its presence globally into new markets such as Mexico and Japan, while expanding the slate of games scheduled in London for 2019 to five and increasing the number of regular-season games abroad, the continued spike of revenue could be even greater in years to come.
While it’s easy for the media to paint Goodell as a villain and question why he remains the commissioner, remember, he’s a hero to the 32 owners who hired him.