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The National Football League, or NFL, is constantly in the news. One area that gets at least some, but not a tremendous amount of, attention is in regard to the NFL and finances. In reality, the facts and statistics associated with the overall finances of the NFL are interesting and worth a consideration — whether or not you are a football fan.
The Essentials of the NFL
The NFL came into existence in the United States in 1920 and, at the time, was called the American Professional Football Association. During its inaugural season, the league played with eleven teams. At this juncture in the 21st century, almost 100 years later, the NFL consists of 32 teams. The teams are placed in two conferences, the National Football Conference (NFC) and the American Football Conference (AFC). Each of the conferences is further broken down into four divisions.
NFL Revenue in the Past 10 Years
The NFL has increased its revenue each year during the past decade. The annual revenue of the NFL in 2004 was about $6 billion in 2004. By 2016, the annual revenue figure reached $13 billion.
The revenue of the NFL outpaces that of other professional sports leagues. For example, the National Basketball Association, NBA, had a 2016 revenue of $7.4 billion while the National Hockey League, NHL, generated $4.4 billion that same year. Major League Baseball, MLB, ranks in second place with $9 billion in revenue in 2016.
Valuation of NFL Franchises
Sometimes referred to as “America’s Team,” the Dallas Cowboys are considered the most valuable franchise in the NFL. The Cowboys have an estimated value of $4.8 billion. This estimate was based upon research undertaken by Forbes magazine.
The average valuation of an NFL franchise is just over $2.5 billion. The franchise with the lowest valuation is the Buffalo Bills at $1.6 billion.
The Cowboys are also the highest grossing team in the NFL. In 2016, the Cowboys generated $840 million. The other four teams that make up the top five earners in the NFL are:
- New England Patriots
- Washington Redskins
- San Francisco 49ers
- New York Giants
NFL and Spectators
In addition to generating more money the other professional sports leagues in the United States, the NFL also outpaces them when it comes to attendance. The average NFL game draws more than 67,000 spectators. The Super Bowl is always one of the biggest single day sporting events on the planet, consistently generating about $4 billion in consumer spending.
NFL and Television
The deals between the NFL and television outlets are also lucrative. For example, the existing deal between the NFL and ESPN, which runs from 2014 to 2021, is worth a total of $15.2 billion.
In 2015, the NFL as a whole generated more than $12 billion in revenue. 50 percent of that revenue comes from deals involving television broadcast rights. The annual average coming from the sale of television rights by the NFL is in excess of $7 billion annually. The other two primary revenue streams associated with the NFL are ticket sales and sponsorships or licensing.
NFL as a Trade Association
The NFL considers itself a trade association, funded and overseen by the owners of the 32 member teams. Up until 2015, the NFL enjoyed a tax exempt status. As a result of increasing public criticism, the league abandoned its tax exempt status in that year.
The revenue generated by the NFL is actually earned at the club or franchise level. Thus, each of the individual franchises is responsible for paying taxes on this revenue.
In recent years, the NFL has been hit with a number of controversies. A majority of these controversies have stemmed from conduct of players. These have included controversies involving illegal drug use and violation of other criminal laws.
The leadership of the NFL has been drawn into these controversies from time to time as well. For example, with the number of NFL players who were accused of domestic violence, a good many people contended that the league failed to appropriately sanction players that ended up involved in this type of misconduct.
Finally, in recent years, a great deal of attention has been focused on permanent injury suffered by players who had repeated concussions while playing for the league. These individuals have been diagnosed with conditions like A.L.S., Parkinson’s disease, and chronic traumatic encephalopathy. 1,753 claims from the more than 20,000 retired players have been filed thus far. Of that number, 233 have been approved for more than $228 million.
Jessica Kane is a professional blogger who focuses on personal finance and other money matters. She currently writes for Checkworks.com, where you can get personal checks and business checks.
Featured image: Pexels