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How can the NFL continue to increase its profits?

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Followers of the NFL in the United States may be surprised as to just how popular the league is on a global scale. There are millions of fans in all parts of the world with Europe being a particular draw for the top level of American football.

One of the reasons for this is the exclusivity of the NFL. There are no leagues that can compete in terms of attracting the best teams and the biggest stars. For that reason, the NFL has enjoyed a monopoly for many years, and it’s reflected in some serious viewing figures.

Impressive figures

At the start of the 2022/23 NFL season, reports confirmed that some 25 million viewers tuned in to watch the game between the Tampa Bay Buccaneers and the Dallas Cowboys. That’s 25 million purely looking to take in a regular season contest.

When the NFL campaign reaches its later stages, the numbers become even more impressive. For Super Bowl LVI in February 2022, a total of 208 million viewers watched at some stage. The event averaged out at a staggering 112.3 million.

The NFL is picked up by all the main broadcasters in the US and beyond. There is huge demand, and a significant number of those viewers tune in via live streaming services. In short, there is a vast audience for the organization to tap into.

       

Where does the money come from?

The NFL benefits from those global viewing figures but direct revenue comes from many other sources. While profits are plowed back into the league, each of the individual franchises also stand to benefit.

TV rights sell for eye watering sums of money while prime time NFL viewing nights also come at a premium for those who want to advertise. For the Super Bowl, things start to get serious.

Reports state that a 30-second ad during the final game of the NFL season can cost a company up to $7 million. Multiply those sums by the number of commercial breaks in the match and this is a multi-million dollar encounter.

Sponsorship is another area where there are no shortages of companies wanting to associate themselves with the NFL and its 32 franchise teams.

Substantial income is generated by merchandising. Who doesn’t go to an NFL game now without wearing their team’s replica shirt? In truth, not everyone will be sporting their franchise’s colors, but this is a key revenue generator.

       

Shirts, helmets, bumper stickers, key rings and much more raise millions of dollars for teams and the NFL as a whole.

Ticket sales offer another direct source. When compared to competing sports such as hockey, NFL tickets cost far more. There may be some debate about that among fans, but this is another significant source.

New frontiers

Since 2018 when the US Supreme Court began to relax the rules on sports betting, the gambling landscape in the country has begun to open up. Not every state is on board, but many have embraced the concept.

It’s easy for many Americans to source markets and NFL odds at Betway are easy to locate. There’s lots of choice throughout the season with many operators looking to take advantage of a new frontier.

In return, revenues generated from licensing, advertising and other sources can help state governments as well as organizations such as the NFL.

Taking the game across the world

The National Football League, like all topflight sporting leagues, has a need to increase profits. The sport simply can’t stand still and there is a constant demand to boost revenue to meet costs and to grow.

While there are professional American football competitions in other parts of the world, they are unable to compete with the popularity of the NFL. This could potentially be an issue for the organizers who are looking to grow the sport outside of the US.

Like any sports fan, followers of the NFL all want to watch a live game. The interest in the sport is reflected in those viewing figures but nothing beats being pitchside.

These reasons have been behind the organization’s desire to host NFL games in the UK. Wembley Stadium has previously been a venue for matches while the league has recently struck a deal with Premier League soccer club Tottenham Hotspur.

New fans equal additional revenue and this is one way in which the NFL can increase its profits.

Increasing the premium

Increased costs may be a taboo subject, especially amongst fans. It’s hoped that the NFL would not up the price of ticket sales and upset the average supporter. However, with increasing costs, the figures involved with advertising and sponsorships may have room for maneuver.

While the sums required to book advertising space are already at serious numbers, there is no shortage of competition for slots. Increased competition can allow the league to look at lifting those prices. It’s not an ideal solution but it’s one that every organization has to consider in the present financial climate.

Research reveals that TV deals are the most lucrative stream of income, and this is another area that can offer increased revenue. When the time comes to auction off those TV rights, there will be significant competition once again.

Potentially, the TV companies can look to offset part of their costs to subscribers. The NFL might want to avoid that but it’s a natural extension.

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