The National Football League has been a staple in American culture since its inception in the year 1920. It is no secret that the players are paid well, the coaches are compensated more than fairly, and a drink at any stadium can cost more than your ticket ran you. The profits in the NFL are astronomical. However, they are often hidden from the public. Luckily, one team, the Green Bay Packers allows public shareholders and releases limited financial statements each year that can give us a glimpse into the revenues and expenses an NFL team may incur. In this paper, I will go over the assumed financials of the NFL based on the information provided by the Packers as well as other information provided from numerous sources. As stated above the …show more content…
A study, called the fan cost index, is conducted regularly for all major sports, this breaks down the average cost of attending the game for a family of four. In 2012 the average NFL ticket cost $78.38, the average beer was priced at $7.28 and hot dogs and soft drinks at $4.84 and $4.57 respectively. With a family of four this would set the fan cost index for the average NFL game at $443.93. The team records revenue on ticket sales and typically 50% of concession sales, Multiply these sales by the number of attendees at a game and you one arrives at a rather large amount per game. But this is not the NFL teams only sources of revenue. The NFL generates massive revenues from its television deals. Currently all 32 NFL teams are located in metropolitan areas that exist within the country’s top 100 television markets by population. Of these metropolitan areas, the NFL has teams in 25 of the 30 largest. The largest NFL teams market is New York reaching 7.3 million household, and the smallest is Green Bay reaching over 441,000 households. This amounts in an estimated television broadcasting deal worth over $7 billion dollars in revenue per year for the NFL (NFL History). As seen below, Facebook recently released data based on account activity that allowed a map to be created showing what markets or areas each team has a majority hold on for television …show more content…
In 2015 the NFL took in over $1.2 billion in sponsorship revenues. These sponsorships ranged from “Gatorade: the official drink of the NFL” valued at $45 million per year to “Nationwide: official insurer of the NFL” valued at $800,000 per year all the way to “Castrol: the official motor oil of the NFL” contract undisclosed. Since 2011 the NFL’s sponsorship revenues have increased by over $250 million dollars and this growth in revenues is expected to continue far into the future. The NFL does have its fair share of expenses as well. The costliest of which being player salaries. In 2015 the average NFL team dished out over $135 million for their 53-man roster. There is also a direct connection between money spent on player salaries and overall success of the team. For example in the 2015 playoffs 9 of the top 10 highest paid teams all qualified. It is also interesting to note that roughly 60% of total player salaries is are attributable to the salaries of the top 10 highest paid players per team. In 2015 the Seattle Seahawks (10-5-1) spent the most on salary expense at over $160 million while the Chicago Bears (3-13) spent the least at only $112 million. Of the top ten highest paid players in the league five are quarterbacks with Drew Bree’s landing the number one spot with a yearly salary worth over $30