With the Thanksgiving holiday upon us, many Americans are close to partaking in a favorite leisurely past time: Eating turkey, falling asleep and watching football. Turkey Day isn’t just a day full a food, but also NFL football, as six teams will duke it out from 12:30 pm ET to around midnight.
For some fans, these teams — Detroit vs. Chicago, Atlanta vs. New Orleans and Dallas vs. Washington — will be their local favorites squaring off in divisional battles. For much of the country though, these national games will be running in the background, in and out of focus as families gather around the table and share some grub.
It’s got some observers wondering though, just how much money does the NFL make? How much are these teams worth? Who runs the NFL?
So as our part of the Thanksgiving tradition, we here at Option Party felt we would do our holiday part to bring you the financial side of the NFL. Who knows, maybe that will give you something to talk about at the table this year.
Is the NFL Rolling in Dough?
Of the four major sports in the United States, the NFL is the clear leader. In 2016, the NFL reportedly generated revenue of more than $13 billion. The next highest earner in the U.S. was Major League Baseball, generating $9.5 billion in sales and the NBA at $4.8 billion.
Although those figures have trended higher, the NFL remains dominate. But because the league is a privately-held entity, getting data on the league’s financials is not that easy. After digging through countless income statements, balance sheets and 10-Ks, we sometimes take for granted the transparency that comes with public companies.
But lo and behold one team — the Green Bay Packers — are publicly owned. Well, at least to some degree. In any manner, this gives us a better peak into the financial world of the NFL. So for 2017, we found out that the NFL had generated over $8 billion in shareable revenue to its teams. That comes out to roughly $255 million per team.
In fact, the league has found a way to steadily increase revenue each year. That may surprise many fans, who know attendance has stagnated and protests have hindered ratings. However, the NFL remains a star for networks, as television networks contend with a swath of cable-cutting consumers who prefer to watch Netflix rather than ABC.
Perhaps that will come into play during the NFL’s future contract negotiations with broadcasters like ESPN, Fox, CBS, ABC and NBC. But so far, the league’s decisions — like Thursday Night Football — have paid massive dividends.
According to Statistica, the NFL brought in total revenue of $13.68 billion last year. It’s a significant increase from the ~$9.6 billion in revenue it generated just four years prior in 2013. In 2007, before the financial crisis, the NFL generated ~$7.1 billion in sales. So while some may believe that the NFL is on the brink of demise, that’s far from the case.
Given the steady increase in revenue, owners have reaped plenty of profit and made their top assets that much more valuable. The three most valuable franchises are the Dallas Cowboys, New England Patriots and New York Giants at $5 billion, $3.8 billion and $3.3 billion, respectively. The Cowboys are also the highest valued across all four major U.S. sports leagues.
Even the three least valuable franchises are still worth a pretty penny. The Cincinnati Bengals, Detroit Lions and Buffalo Bills are worth $1.8 billion, $1.7 billion and $1.6 billion, respectively. That’s vastly more than the most valuable NHL team, the New York Rangers, at $1.2 billion.
Players Are Cashing In, Too
As network deals and NFL revenue continue higher, so too do the salary caps. Specifically, the salary cap has increased by 44% over the past five years, leading to a tidal wave of big-time contracts.
Green Bay Packers quarterback Aaron Rodgers inked the NFL’s largest contract in August 2018. His contract is for four years and $134 million, while his salary and bonuses near $67 million in the first year alone. Both are records, but will surely be broken over time. For instance, the NFL’s top-10 earners this year will pull in $424 million in compensation this year. That’s up a tremendous 43% from 2017!
So while the players may not like the short turnaround time of playing on Thursday night, they’re clearly seeing it in their checks.
Finally, the players and teams aren’t the only ones raking in the cash. Don’t forget about NFL commissioner Roger Goodell. While far from a fan favorite, the owners love Goodell. He has helped navigate the league to where it is today and lined their pockets with profits. After becoming commissioner in 2006, Goodell earned a reported $212.5 million in his first ten years on the job. In December 2017, he signed a contract extension for five years and up to $200 million if he hits his incentives.
Suffice to say, cabbage might not be on the menu for Thanksgiving dinner, but there’s plenty to go around in the NFL.