NFL: The Road to $25 Billion

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Anheuser-Busch, the second-biggest sponsor in the NFL, issued a strongly worded statement on Tuesday afternoon, criticizing the league over the recent scandals. But, that’s it, just a statement.

Although the Ray Rice and Adrian Peterson cases continue to tornado through the media, there is this much that is certain: Sponsors are not going anywhere. Except Radisson, which suspended their Vikings sponsorships Monday. They may be the onlt brand to go that far.

But why?

It’s simple, NFL is too lucrative to abandon. Sponsors feel fortunate to just hang with the league.

Last year, sponsorship revenue for the NFL and its 32 teams totaled $1.07 billion, up 5.7 percent from the previous year, easily eclipsing baseball, basketball, and all other competitors in the American sports-business universe.

But Roger Goodell, the NFL commissioner, wants more, much more. He has stated that he wants to reach $25 billion in annual revenues for the league by the year 2027.

It’s an incredibly ambitious goal, but it is also a very achievable one when considering what the league has in store for the future.

Here’s how the NFL can get there:

Advertising

One has only to watch the Super Bowl to understand the power and money associated with NFL advertising. One second will cost a little over one hundred thousand dollars. For a thirty second ad, just do the math. And it was the price in 2009.

There is money at stake. In fact, demographic research has shown that there is a growing number of people who do not even enjoy watching the game of football who gather to watch the commercials featured at commercial breaks and at half-time. The payoff is huge for an advertiser who hits a home run.

Media

The jump in new media money in 2014 is no secret, though it is staggered so the initial years will not see a major jump.How the league handles distribution through alternate platforms, like mobile and tablet, could provide the key for the league reaching its $25 billion revenue goal.

NFL Network and RedZone also look to be key in getting the league to the revenue target.

Tickets Sales

Still the bread and butter of most teams’ local business, this revenue has largely been flat for several years for many clubs, if not down. Like other businesses, the NFL has struggled through the financial problems the country has suffered since 2008.

While the league has filled most of its stadiums, prices have been restrained, so ticket revenue has been very modest. This area could get a boost with new stadiums in Santa Clara and Minnesota, and would get a big bump if a team relocated from a small market to Los Angeles.

Stadiums

The NFL is a spectator sport, and Americans flock to their favorite teams stadium. There is a structured ticket scale which allows just about everyone, regardless of budget, to watch their favorite gladiators do battle. From the nose bleed upper deck, to the fifty yard line, to the private booth, tickets range from the forty to fifty dollar range up to the thousands for a booth.

While you are at the stadium, don't forget the Coke, nachos, beer, and hot dogs. This is also a good source of revenue for the league as you may pay upwards of twenty dollars for a hot dog, nachos and beer.

Licensing and Merchandise



Another major source of revenue for the National Football League is merchandise. With over 32 teams spread across the United States, the NFL is well positioned to market a wide variety of team-related merchandise.

From jerseys and tee shirts to coozies, stadium seats, and even high end personalized golf club sets, there is something available for every fan bearing their teams logo.

At the heart of this operation is the contract signed with manufacturers and retailers to produce and sell the NFL trademark logo and team logo. However, the marketing push is not solely centered on the United States. It is a worldwide effort.

That's how the NFL reach $25 billion in 13 years, and maybe that day would come earlier. That's also the best answer to why most sponsors aren't pulling out of the league right now.

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