How The NFL Became A $20 Billion Annual Business

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Today At A Glance:

The NFL season kicks off with a Thursday Night Football game between the reigning Super Bowl Champion Kansas City Chiefs and the rising Detroit Lions. So today’s newsletter will serve as a “state of the union”-style review of the Shield’s business, including where it’s at, new developments for the 2023-24 season, and all things NFL.

This newsletter is also available via podcast on Apple or Spotify. Enjoy!

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Friends,

Did you know the NFL currently brings in more annual revenue ($19 billion) than the Premier League, La Liga, Bundesliga, Serie A, and Ligue 1….combined?

The first time I heard that stat, it blew my mind. It almost feels incomprehensible that one American sports league, albeit the biggest, would generate more revenue than the top five soccer leagues, especially considering soccer is the world’s most popular sport.

But that one stat showcases the power of the world’s most lucrative sports market.

The NFL has increased its annual revenue by 190% since Roger Goodell became Commissioner in 2006, from $6.54 billion to $19 billion. And with $100 billion media rights agreements kicking in, Goodell is now closing in on his 2027 goal of $25 billion.

Big Four American Sports League By Revenue (2022-23)

• NFL: $19 billion

• MLB: $10.8 billion

• NBA: $10 billion

• NHL: $5.7 billion

Americans love the NFL, plain and simple. The Super Bowl was watched by 115 million people last year, and nearly 20 million fans attended an NFL game. Franchise valuations are now pushing $10 billion, and the NFL’s highest-paid player this year, Lamar Jackson, will take home $80 million in salary and signing bonuses alone.

But that’s just the tip of the iceberg. The NFL looks unstoppable, and 2023-24 looks primed and ready to be the league’s most significant financial year yet.

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New TV Deals Keep Business Booming For The NFL

The NFL makes most of its money through broadcasting agreements. This is where networks like NBC, CBS, Fox, ESPN, and Amazon pay billions of dollars in exchange for the exclusive right to broadcast NFL games, monetizing the content via expensive carriage fees and six-figure (or seven-figure) commercials with advertising partners.

The NFL made about $8 billion per year under their previous deals. But they recently signed media rights packages worth $110 billion over 11 years, most of which officially kick in this year.

Annual Payment By Network Partner

• NBC: $2 billion+ (paying a little less than CBS and Fox) for Sunday Night Football, playoffs and Super Bowl rotation

• CBS: $2 billion+ for Sunday day games, playoffs and Super Bowl rotation

• Fox: $2 billion+ for Sunday day games, playoffs and Super Bowl rotation 

• ESPN: $2.7 billion for Monday Night Football, playoffs, and newly added to Super Bowl Rotation on ABC 

• Amazon: $1 billion for Thursday Night Football and Black Friday game

We all know about the decline of cable television in the United States. But this has historically been a very lucrative business for cable companies, making it an even better business for the NFL.

That’s because NFL regular season games averaged 16.7 million viewers last year. Wild Card Weekend averaged 28.4 million viewers. The division round averaged 37 million viewers. The conference championships averaged 50.3 million viewers. The Super Bowl had 115.1 million viewers. And NFL games represented 82 of the top 100 most-watched US TV broadcasts in 2022, including 23 of the top 25.

In fact, some would argue that the decline of cable TV has actually been a positive for the NFL. That’s because sports (and to a lesser extent live news) are the last appointment viewing broadcasts. So cable companies are forced to increase their bids, even as their profits decline, and streaming companies add another layer of demand.

And now the NFL is getting more aggressive with its scheduling.

Take Black Friday, for instance. Congress passed the Sports Broadcasting Act in 1961, which protected high school and college football by banning the NFL’s ability to broadcast games on Fridays and Saturdays during the Fall football season.

But there is a catch. The Sports Broadcasting Act only bans professional football games on Fridays *after 6 p.m. EST* or any Saturday between September & December.

So, the NFL sweetened its deal with Amazon by allowing the online retailer to broadcast the league’s first Black Friday game.

That tells me two things: 1) The NFL continues to find creative ways to maximize viewership, and 2) they aren’t scared of a potential antitrust lawsuit (the law could be considered vague, stating a “substantial part” of the game can’t take place after 6 p.m.).

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Team Valuations Keep Going Higher

The business of the NFL is firing on all cylinders. A record 18.8 million fans attended games last year. There are five international games in London and Germany this year, including the Jacksonville Jaguars playing back-to-back weeks. And the league office handed out $374.4 million in national revenue (+7.8%) to every team in 2022.

2023 NFL International Schedule

• Week 4 (Oct. 1): Falcons vs. Jaguars at Wembley Stadium in London, U.K.

• Week 5 (Oct. 8): Jaguars vs. Bills at Tottenham Hotspur Stadium in London U.K.

• Week 6 (Oct. 15): Ravens vs Titans at Tottenham Hotspur Stadium in London U.K.

• Week 9 (Nov. 5): Dolphins vs. Chiefs at Frankfurt Stadium in Frankfurt, Germany

• Week 10 (Nov. 12): Colts vs. Patriots at Frankfurt Stadium in Frankfurt, Germany

This increase in business activity is great for Commissioner Roger Goodell, the league, and its players — yet no one is happier than the owners.

The average NFL franchise is now worth $5.14 billion, according to Sportico. This is a 24% increase from 2022, and every team is now worth at least $4 billion.

2023 NFL Franchise Valuations Rankings with 1-Year Value Change

1. Dallas Cowboys: $9.2 billion (20%) 

2. New York Giants: $7.04 billion (23%) 

3. Los Angeles Rams: $6.94 billion (17%) 

4. New England Patriots: $6.7 billion (14%)

5. San Francisco 49ers: $6.15 billion (19%)

6. New York Jets: $6.11 billion (27%) 

7. Washington Commanders: $6.05 billion (27%)

8. Chicago Bears: $6 billion (20%)

9. Philadelphia Eagles: $5.95 billion (27%)

10. Las Vegas Raiders: $5.77 billion (41%)

11. Houston Texans: $5.35 billion (16%)

12. Miami Dolphins: $5.24 billion (29%) 

13. Atlanta Falcons: $5.15 billion (33%)

14. Denver Broncos: $4.87 billion (5%) 

15. Seattle Seahawks: $4.82 billion (10%)

16. Pittsburgh Steelers: $4.8 billion (13%)

17. Green Bay Packers: $4.75 billion (13%) 

18. Los Angeles Chargers: $4.63 billion (28%)

19. Kansas City Chiefs: $4.52 billion (28%) 

20. Minnesota Vikings: $4.43 billion (19%) 

21. Tennessee Titans: $4.37 billion (33%) 

22. Carolina Panthers: $4.27 billion (27%)

23. Baltimore Ravens: $4.24 billion (23%) 

24. Indianapolis Colts: $4.21 billion (30%) 

25. Cleveland Browns: $4.2 billion (32%)

26. New Orleans Saints: $4.19 billion (29%)

27. Arizona Cardinals: $4.17 billion (32%) 

28. Tampa Bay Buccaneers: $4.15 billion (27%)

29. Buffalo Bills: $4.13 billion (38%) 

30. Detroit Lions: $4.1 billion (43%)

31. Jacksonville Jaguars: $4.04 billion (37%) 

32. Cincinnati Bengals: $4 billion (41%) 

Perhaps the best examples of NFL franchises becoming more valuable are the two most recent transactions: the Denver Broncos selling for a record $4.65 billion in 2022 and the Washington Commanders beating it with a $6.05 billion sale ten months later.

Both these sales represented a significant multiple to their ~$500 million in annual revenue. And Washington’s Dan Snyder walked away with a $5 billion profit even after being one of the NFL’s worst owners and getting hit with a $60 million fine on the way out.

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Record Revenue Leads To Stadium Boom

One downstream effect of NFL teams making more money than ever is a stadium boom across the league, consisting of new builds and expensive renovations.

For example, the Buffalo Bills and Tennessee Titans are both in the process of building multi-billion-dollar stadiums. These stadiums will require hundreds of millions of dollars (or $1B+) in public funding and are scheduled to open in 2026 and 2027.

New NFL Stadiums Being Built

• Buffalo Bills: The outdoor New Highmark Stadium is being built in Orchard Park, New York

  • Cost: $1.4 billion

  • Public funding: $850 million

  • $600 million from the state of New York

  • $250 million from Erie County  

  • Private funding: $550 million 

  • Seats: 62,000

  • Stadium owner: The state of New York

  • Targeted opening: 2026

• Tennessee Titans: New indoor stadium being built in Nashville, Tennessee

  • Cost: $2.1 billion

  • Public funding: $1.26 billion (the most taxpayer money for a US stadium ever)

  • Private funding: $840 million 

  • Seats: 60,000

  • Stadium owner: The Metro Nashville Sports Authority

  • Targeted opening: 2027

Plenty of NFL teams are making upgrades to their existing stadium, too.

For instance, Washington’s new ownership group announced $40 million worth of upgrades to FedEx Field, including new sound systems, video boards, and upgraded suites. The New England Patriots recently finished a $250 million renovation project that included the installation of the largest outdoor video board at a sports stadium in the United States. And the Denver Broncos added a 225 ft high x 73 ft wide scoreboard (tallest in North America) during their $100 million upgrades.

So while the NFL is printing more money than ever, many of the league’s stadiums were built 20+ years ago, and the time has come for owners to invest in the future.

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Fast Facts: Things To Keep In Mind This Football Season

• Super Bowl 58 in Las Vegas will be broadcast on CBS. However, Nickelodeon will also broadcast the first-ever Super Bowl alternate telecast for kids.

• Peacock will be home to two exclusive streaming-only games — a December 23 regular season matchup between the Buffalo Bills and Los Angeles Chargers, and an NFL Wild Card game on January 13, 2024.

• More Monday doubleheaders: Week 1 has always had a Monday doubleheader. But this season, there are 3 Monday night doubleheaders with games on both ESPN and ABC airing simultaneously.

• Lamar Jackson ($82 million) will be the NFL’s highest-paid player in 2023 after signing his 5-year, $260 million extension this summer. Patrick Mahomes ($65.5 million), Daniel Jones ($47.5 million), Deshaun Watson ($46.5 million), and Aaron Rodgers ($45.9 million) round out the top five. This list includes endorsements.

• The five biggest annual endorsement earners are all QBs: Patrick Mahomes ($25 million), Dak Prescott ($14 million), Russell Wilson ($12 million), Aaron Rodgers ($9 million), and Josh Allen ($9 million).

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I hope everyone has a great day. We’ll talk on Friday.

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Huddle Up is a 3x weekly newsletter that breaks down the business and money behind sports. If you are not already a subscriber, sign up and join 100,000+ others who receive it directly in their inbox each week.

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