Welcome to the blog of Dr. Lisa Burns' Sports, Media & Society class at Quinnipiac University. If you're looking for in-depth analysis of sports media issues, this blog is for you!
Monday, January 24, 2022
Economics of Sports Media Blog 1, Question 1 (Feb. 1)
Sports is one of the biggest money-making
industries in the world. Discuss three reasons why sports organizations
generate so much revenue. Be sure to include specific examples to support your
points. Limit: 13 responses
It is not a secret that sports represent a billion-dollar business. There are various ways that these organizations make a profit. I am going to focus on the NFL. Each NFL stadium has at least 60,000 seats. The price of a seat depends on how close you are to the field and if you are in box seats or a club area. Some tickets are only $75 while others could be roughly $1000. If we were to say that every ticket is $75 and 60,000 of them get sold, we would have a total amount of 4.5 million dollars in ticket sales alone, assuming every ticket is only $75. It also costs money to park at the stadium along with concessions. Another way that NFL teams make money is because “NFL teams have multi-billion-dollar contracts with television providers.” (Armbruster 2021). My family has had season tickets for the New York Giants for over 50 years, and the cost of tickets keeps increasing every year, even though the talent being put on the field is decreasing. Even though a team may not be good, fans will still spend money to see them not only because they want to support their team but because sports is a religion. For me, the Giants could be 17-0 or 0-17, and I still would not hesitate to go to the game. Having people who are obsessed with going to games will mean that NFL ticket sales will continue to increase. Sports teams can charge whatever they want for concessions and people are willing to pay that price because they may want food, a drink, or even a souvenir from the team store. The bottom line is that these teams can charge whatever they want for items, and no one will even bat an eye.
With the current Pandemic, some season ticket holders are not renewing their tickets out of an abundance of caution. What this does is open up seats for other people to buy, and with the NFL, they will never be struggling to get fans to attend games. In Mike Ozanian’s article, “World’s Most Valuable Sports Teams 2021” he mentions that “The average value of the 50 most valuable sports teams has jumped 9.9% from last year, to $3.4 billion, up 55% from five years ago.” (Ozanian 2021). Most NFL stadiums have built new stadiums within the past 20 years, and to offset the cost of building a new stadium, ticket prices have increased, and people are more than happy to pay for them because they want to experience the game in the new stadium. Ozanian says that the top 50 teams on Forbes list of most valuable teams “come from four sports… all of which are propelled by ever-escalating media rights deals…”. Television providers are willing to shell out a large amount of money to get the rights to a team because they realize that the team has an extensive viewership which will, in turn, generate a profit for both sides.
NFL Games are generally watched on Fox, NBC, CBS, Amazon, ESPN, and the NFL Network, but the NFL recently inked a new TV deal with Disney, Fox, NBCUniversal, Viacom CBS, and Amazon. In Alex Weprin’s article, he says, “NFL games are consistently the most popular and most watched programming on television, making the renewals a top priority for the media and entertainment giants… while at the same time allowing them to expand into streaming video.” (Weprin 2021). NFL games are among the most-watched, if not the most-watched live programming, and there is no reason to believe that this would change anytime soon as the game of football continues to get better and better. With all these TV companies throwing money at the NFL, the NFL will continue to be one of the most significant money-making industries in the world, let alone the sports world.
Armbruster, C. (2021, November 10). How do NFL teams make money? TV, sponsorships, ticket sales.. AS.com. Retrieved January 28, 2022, from https://en.as.com/en/2021/11/10/nfl/1636507077_555634.html Ozanian, M. (2021, May 14). World's most valuable sports teams 2021. Forbes. Retrieved January 28, 2022, from https://www.forbes.com/sites/mikeozanian/2021/05/07/worlds-most-valuable-sports-teams-2021/?sh=2bc779c63e9e Weprin, A. (2021, March 19). NFL inks rich new TV deals with Disney, Fox, NBCUniversal, Viacomcbs and Amazon. The Hollywood Reporter. Retrieved January 28, 2022, from https://www.hollywoodreporter.com/tv/tv-news/nfl-new-tv-deals-abc-fox-nbc-cbs-amazon-4139552/
It is clear that sports are one of the biggest money-making industries in the world. Streaming, merchandise, and sponsorships bring in the most revenue to sports organizations. Before streaming, people had to watch sports events and games on major networks. Games were available on CBS, NBC, ABC, and later Fox. People needed to have a cable box and a tv, but now people can easily stream games right from their phone. Another issue was that people did not have access to all games across the country, and would have to spend extra money through the cable company and purchase packages. With new advancements of streaming services, there have been increase in revenue for sports organizations. According to “Streaming, Betting Companies Bolster NFL Ad Market,” by John Ourand from the Sports Business Journal, “DirecTV Stream was the biggest spender. Its $125 million in ad sales is as much as the next five companies in the category. CBS (51%) took the lion’s share of DirecTV Stream’s campaign, with NBC (17%), Fox (16%) and ESPN (16%) sharing the rest” (Ourand 7). In total, there was $304 million spent on in-game ads between ten brands. This revenue was up by 74% from last year. The NFL has been in the works of exclusive streaming with Amazon that would start in 2023. According to “NFL Inks Rich New TV Deals With Disney, Fox, NBCUniversal, ViacomCBS and Amazon,” by Alex Weprin from The Hollywood Reporter, “ABC will be added to the Super Bowl rotation, and Thursday Night Football Rights will be exclusive to Amazon” (Weprin 3). This is expected to bring in $100 billion to the NFL. Mike Hopkins, senior vp of Prime Video and Amazon Studios, stated that “NFL games are the most watched live programming in the United States, and this unprecedented Thursday Night Football package gives tens of millions of new and existing Prime members exclusive access to must-watch live football on Prime video” (Hopkins, Weprin 9). Overall, this provides fans with a broad selection of content and brings in a huge revenue to sports organizations.
Another reason why sports organizations generate so much revenue is because of merchandise. When fans wear merchandise not only are they bringing tremendous amounts of money into the sports organization, but they are literal walking advertisements. According to “Strategies for Sport Organizations to Capitalize on Merchandising.” by Dr. Bonnie Tiell and Dr. Danielle Foster, “The 2020 U.S. market value for collegiate and professional licensed sports merchandise is estimated at $14.82 billion with the MLB and NFL generating approximately $4 billion each from the sale of products bearing team logos” (Tiell, Foster 5). The NFL Dallas Cowboys and MLB New York Yankees are ranked highest for revenue in merchandise sales. One-third of the U.S. Market is connected to collegiate level merchandise such as University of Alabama Crimson Tide, University of Texas Longhorns and the University of Notre Dame Fighting Irish. Another reason sports organizations bring in so much revenue is from sponsorships. In the article, “Microsoft among deals that helped NBA set record $1.46 billion in sponsorship revenue,” by Jabari Young, the Brooklyn Nets among 26 other NBA clubs have patch deals, meaning they wear logos on their jersey. The Brooklyn Nets, Milwauke Bucks, and Indiana Pacers have an agreement with Motorola (Young 7). Peter Laatz stated that “Some teams are getting more than $15 million per year for jersey patches and that is close to the $30 million a naming rights sponsorship can bring in annually” (Laatz, Young 8). Overall, streaming services, merchandising, and sponsorship are the reasons why sports organizations bring in so much revenue.
Dr. Tiell, Bonnie,Dr. Foster, Danielle. “Strategies for Sport Organizations to Capitalize on Merchandising.” Sports Destination Management, https://www.sportsdestinations.com/management/economics/strategies-sport-organizations-capitalize-merchand-21654. Ourand, John. “Streaming, Betting Companies Bolster NFL Ad Market.” Sports Business Journal, 24 Jan. 2022, https://sportsbusinessjournal.com/Journal/Issues/2022/01/24/In-Depth/NFL-ad-spend.aspx. Weprin, Alex. “NFL Inks Rich New TV Deals with Disney, Fox, NBCUniversal, Viacomcbs and Amazon.” The Hollywood Reporter, The Hollywood Reporter, 19 Mar. 2021, https://www.hollywoodreporter.com/tv/tv-news/nfl-new-tv-deals-abc-fox-nbc-cbs-amazon-4139552/. Young, Jabari. “Microsoft among Deals That Helped NBA Set Record $1.46 Billion in Sponsorship Revenue.” CNBC, CNBC, 29 June 2021, https://www.cnbc.com/2021/06/29/nba-set-record-1point46-billion-in-sponsorship-revenue-this-season.html.
Nicole Clemons Sports bring in an insanely large amount of revenue year after year. Teams have been capitalizing on ads, merchandise, and now streaming services. We see commercials of professional athletes partnering with streaming services. Hulu had Damian Lillard and Skylar Diggins-Smith be a part of their commercial to promote live sports to the service. Many leagues are joining these services to spread the views of their games. A lot of people have decided to cut their cable subscriptions and switch to streaming. If leagues did not join in on the streaming platforms, many people would miss the games. The NFL constantly sits atop the list of the most watched, Amazon decided to partner with the NFL and secure a spot no other streaming service has. “The deal with Amazon is significant as it will be the first time that a tech company has secured the primary TV rights to a slate of NFL games.”(Weprin 2021). The pandemic caused, and a lot of teams and leagues to lose money. No games were being played fans were not in attendance and revenue was dropping. The leagues needed a way to bring in money. The NHL looked at merchandise to bring in money. They introduce the “Reverse Retro" collection. Which was a new jersey highlighting nostalgia. “The “throwback” touchpoints appeal to older fans who remember Stanley Cups of the past, while also capitalizing upon a younger audience with Adidas’ unique designs that fit seamlessly into the current popularity of streetwear and athleisure.”(Pitré 2021). By bringing together multiple generations with one jersey more people went out and bought the jersey. When the jerseys came out, I wanted so many of them from favorite teams to the design and colors on others. I think this was a great idea from the NHL jerseys are such a huge part of the fan experience. Being able to wear the same jersey as your favorite athletes, and to collect various jerseys over the years is something very special to fans.
Nicole Clemons Cont'd Advertising is also having a huge impact on sports and revenue, a prime example of this is the Super Bowl. The Super Bowl is one if not the most watched event in America. A chance for people to see their teams go head-to-head for the chance to be Super Bowl champions. There are many people who watch the Super Bowl for commercials. Besides the game a lot of the talk is about the commercials. It has become a tradition to watch the commercials to tell your friends the next day which one was your favorite. Which brings advertisers flooding in to have their brand be published for 30 seconds. This year prices will soar to a new high. “Eager to generate millions of dollars in revenue from the Big Game, the Comcast-owned conglomerate is talking to potential advertisers about a price tag of $6 million for a 30-second spot in the event.”(Steinberg 2021). No matter how expensive advertisers will spend the money to have their brand shown on a commercial during the Super Bowl. Weprin, Alex. “NFL Inks Rich New TV Deals with Disney, Fox, NBCUniversal, Viacomcbs and Amazon.” The Hollywood Reporter, The Hollywood Reporter, 19 Mar. 2021, https://www.hollywoodreporter.com/tv/tv-news/nfl-new-tv-deals-abc-fox-nbc-cbs-amazon-4139552/. Pitré, Katherine E. “Top 5 Reverse Retro Jerseys (That Might Actually Be Worth Your Money).” F Newsmagazine, 8 Feb. 2021, https://fnewsmagazine.com/2021/02/top-5-reverse-retro-jerseys-that-might-actually-be-worth-your-money/. Steinberg, Brian. “NBC Seeks Record $6 Million for Super Bowl Commercials (Exclusive).” Variety, Variety, 16 June 2021, https://variety.com/2021/tv/news/super-bowl-commercials-price-record-1234998593/.
d to something that was once just for the fun of the game to a billion dollar industry that has taken over a lot of the ways in which media and value has been changed. There are many ways in which sports accumulate this high number of revenue but the three that will be focused on in this blog post are merchandising and advertising, branding, and the teams.
Merchandising and advertising are super important in the world of sports because of how it not only advertises for the team but for the wide audience, companies will pay good money for their commercials to show up in a slot during a big game. The Super Bowl is a great example of this. The Super Bowl is one of the most watched events in the nation, having millions upon millions of people wanting to watch for either the football itself or the halftime show. The commercial breaks are filled up by some of the most creative and well thought out commercials because of the money in which the companies pay in order for their commercial to be aired throughout this event. This brings in a huge increase in revenue because of how much these companies are paying. On the other side of merchandising and advertising is apparel. Apparel consists of jerseys, tshirts, hats and many other things showing one’s admiration or appreciation of a certain team. In an article from the Medium titled Money in Sports: Where it All Comes From, and Where it All Goes written by Michael Margulis, it explains how merchandising and advertising come in third for rounding out the overall revenue for sports, “due to the fact that it again appeals to the fans, giving them the ability to purchase gear and apparel that the team would wear, making them feel more connected to the organization,” (Margulis). This is something that every fan gives their money to so they have things to wear to games whether they are at home or away.
Branding promotes products in order to get consumers to purchase it. Branding has been around a very long time in the sports world and allowed for sports to be so highly invested in. In the book The Power of Sports; Media and Spectacle in American Culture by Michael Sezario, it explains how branding has been around for so long and is evolving in sports every day, “Professional sport boosted sales for the sporting goods and and athletic clothing industries in the nascent years, it is easy to overlook but every single NBA game is a long-form ad for Spalding,” (Sezario, 106). People who engage in sports are more likely to want to go to a sports store and buy exactly what their favorite players use to be more like them. This gives the stores that contain these products even more revenue because of the way people are enticed to these products.
Brianna Gonsalves There are certain professional teams that have a bigger popularity and a more established franchise than other teams. These teams have very well known players that are used as the spokesperson for the team and are sent out to do more promotional branding. This also gives the overall team more revenue because of their immense popularity. In an article from Forbes titled The World’s Most Valuable Sports Empire 2022, written by Mike Ozanian, it explains how these teams are branching out to make even more money and raise their popularity by even more, “The New York Yankees are Major League Baseball’s most valuable franchise, worth $5.25 billion by Forbes’ count last year. But the team’s owners have stopped there Yankee Global Enterprises also has stakes in reigning MLS champion New York City FC, the YES Network and Legends Hospitality,” (Ozanian). These efforts raised their total sports property up to $6.81 billion. Teams like this have ways to make the franchise more revenue because they know that their popularity is at a steady and all they have to do is keep giving their fans what they want and this will continue to raise the overall sport industry revenue.
Works Cited Margulis, Michael. “Money in Sports: Where It All Comes from, and Where It Goes...” Medium, Medium, 18 Nov. 2015, https://medium.com/@michaelmargulis/money-in-sports-where-it-all-comes-from-and-where-it-goes-48461c192031. Ozanian, Mike. “The World's Most Valuable Sports Empires 2022.” Forbes, Forbes Magazine, 25 Jan. 2022, https://www.forbes.com/sites/mikeozanian/2022/01/21/the-worlds-most-valuable-sports-empires-2022/?sh=633f893e3219. Serazio, Michael. The Power of Sports: Media and Spectacle in American Culture. New York University Press, 2019.
Weekly Blog Sports organizations are some of the most powerful organizations in the world in terms of the amount of money that they make. Sports is something that is done all over the world and has a reach that not many other organizations can compare with. What drives sports is the amount of money that they make because without the money, then teams would not be able to operate on a yearly basis. Each of the four main sports makes huge amounts of money, but the NFL stands out the most as they easily make the most money. There are multiple factors as to why sports are able to make as much money as have been. One of those reasons is just the sheer product that is out on the field that in turn brings in the enormous amounts of money that each league can make. In fact, 106 sports franchises are valued at more than $1 billion across all sports worldwide. Specifically talking about the NFL, they have 29 of the 50 most valuable sports franchises in the world which is just incredible when you think about the amount of power that means for the NFL. In total, the NFL generated $13 billion in the 2018-2019 season. Another reason is TV contracts and how much it can profit the league. Again, sticking with the NFL they will collect $54.6 billion from TV contracts from FOX, CBS, NBC, ESPN, and DirecTV. The power that TV contracts can have over a league is massive as seen by those numbers that the NFL can bring in. Sticking with TV, advertisements play a huge role in the profit of sports leagues. Automakers were the biggest spenders for in-game ads, as they accounted for nearly $830 million. On the same hand, auto part companies spent around $810 million on in-game ads. These were just examples of the biggest spenders which is not even counting other companies that spend money to have their ads be played during NFL games. Every regular season draws millions of viewers which is why companies pay so much for ads, but that price goes up during the playoffs as even more eyes are watching the games and that number goes up even more for the Super Bowl. The last factor is a new one that has only come into play over the last few years and that is sports betting. Over the last few years, sports betting has become more acceptable and the NFL has followed in that thinking. The biggest sportsbooks in the world, DraftKings, FanDuel, and Caesars, have all signed 5-year deals with the NFL to become their official sportsbook for a combined worth of $1 billion. Now with more states legalizing betting, that only helps the NFL and their profit. In a few years, most states if now every state will have sports betting be legal which can allow just about anyone across the country allowed to place a bet. Not only people place bets will improve profit, but those sportsbooks will also pay for ads which they could not have done before they became official sponsors with the NFL.
“Streaming, Betting Companies Bolster NFL Ad Market.” Sports Business Journal, sportsbusinessjournal.com/Journal/Issues/2022/01/24/In-Depth/NFL-ad-spend.aspx. “Technology, Gambling Boost NFL's Sponsorship Revenue.” Front Office Sports, 26 Jan. 2022, frontofficesports.com/technology-gambling-boost-nfls-sponsorship-revenue/. Thursday, TJ Mathewson |. “Major Sports Leagues All Make a Lot of Money, Here's How They Do It:” Global Sport Matters, 24 June 2021, globalsportmatters.com/business/2019/03/07/tv-is-biggest-driver-in-global-sport-league-revenue/.
Danielle Zerbo There are a multitude of reasons as to why sports organizations generate so much revenue, despite being just a game at its core. The first reason as to why sports organizations generate so much revenue is because they can capitalize on their viewership using advertisements. Television networks know that millions of people watch NFL games every week. Therefore, they know that companies are willing to pay a large amount of money to have their advertisements played during commercial breaks. They use this opportunity to generate a large amount of revenue for themselves. A specific example where this way of generating revenue can be understood is the amount of money NBC charges for Super Bowl commercials every year. For the upcoming Super Bowl, NBC is charging companies about six million dollars for thirty seconds of screen time between plays (Steinberg). They know that companies are desperate to get their products in front of such a large audience. That is why they are using this opportunity to, “seek a 9.1% increase over the $5.5 million CBS sought for 30 seconds of ad time in 2021” (Steinberg). That is just one way that sports organizations are generating revenue. In order for companies such as CBS and NBC to charge money for commercials during any sporting event, they must have the rights to broadcast that game. Obtaining the rights to any NFL game, let alone the Super Bowl, requires a large deal that is mutually beneficial to both sides. One of the more recent television deals was between the NFL and Disney, Fox, Amazon, NBCUniversal and ViacomCBS. This deal allocated rights to ABC for the Super Bowl rotation, as well as giving Amazon the sole rights to Thursday Night Football. This deal has a term of eleven years and will bring in over $100 million for the league during that span (Weprin). It is a monumental deal for the NFL. It proves how valuable the league truly is and demonstrates yet another way that sports organizations generate money.
In addition to television rights and commercial revenue, another way that sports organizations generate revenue is through sports betting. It is abundantly clear that sports betting generates an obscenely large revenue every year. The ability to bet on sports is given to the individual states. States have noticed the amount of potential revenue sports betting can generate and have slowly started to legalize it. The most recent state expected to legalize sports betting is North Carolina. The bill that would be passed would immediately allow potential revenue for the state. The bill allows, “for at least ten, but no more than twelve online sports wagering operators to ‘accept sports wagers in the state’” (North Carolina lawmakers to vote to allow online sports betting). However, to become an operating sports wager, a license must be purchased for $500,000, and must be renewed after five years for $100,000. ((North Carolina lawmakers to vote to allow online sports betting). This is a logical investment for sports books because they know that they will make their money back in bets in a short time. This is yet another way that sports organizations generate revenue for a wide variety of people and companies.
Works Cited “North Carolina Lawmakers to Vote to Allow Online Sports Betting.” Sports Business Journal, 2022 Leaders Group, 31 Jan. 2022, https://www.sportsbusinessjournal.com/Daily/Issues/2022/01/31/Betting/NC-Betting.aspx. Steinberg, Brian. “NBC Seeks Record $6 Million for Super Bowl Commercials (Exclusive).” Variety, Variety Media, LLC., 16 June 2021, https://variety.com/2021/tv/news/super-bowl-commercials-price-record-1234998593/. Weprin, Alex. “NFL Inks Rich New TV Deals with Disney, Fox, NBCUniversal, Viacomcbs and Amazon.” The Hollywood Reporter, Penske Media Corporation, 19 Mar. 2021, https://www.hollywoodreporter.com/tv/tv-news/nfl-new-tv-deals-abc-fox-nbc-cbs-amazon-4139552/.
The sports industry is one wealthiest out there. It brings people together from all over and has one of the largest followings. Each season brings in a new set of people that watch and put money on games. Sports teams collect money through various ways, such as merchandise, advertising, fans, streaming, betting, and sponsorships. In the book titled The Power of Sports: Media and Spectacle in American Culture, Micheal Sezario states, “the global sports industry is pegged somewhere between $200 $700 billion. Given that this was, by one count, 60 percent more than the value of the film market.” (Serazio) The entertainment and streaming side of sports has changed throughout the years and has become an important way the industry makes money. They not only collect money from the streaming services themselves but the marketing and advertising side as well. Because sports are so highly watched, companies feel as if this is a great way to get their products viewed. According to the article Streaming, betting companies bolster NFL ad market John Ourand streaming companies were the top three advertising buyers for the NFL, “Ten brands accounted for nearly all of the $304 million spent on in-game ads across all the networks, a figure that is up 74% from last year”. (Ourand) The NFL is named one of the most valuable and most significant places for branding opportunities. Each year people fight for commercial slots in the Super Bowl because it is one of the most-watched events. Other sports have been on a decline, so companies fight for spots for the NFL. NFL games are watched on Fox, CBS, NBC, ESPN, and NFL Network, which are all companies that spent millions of dollars on their ads. Now that gambling and online betting is legal in some places, this has become another money pit for the sports industry. According to the article, More states embrace online sports gambling as popularity soars by Molly Hudson, “Sports betting overall generated $3.16 billion in the first ten months of 2021, surpassing the total revenue for the same 10-month period of 2020 by nearly 230 percent.” (Hudson) These companies, such as DraftKings, FanDuel, and Caesars, have partnered with the NFL making them their official sportsbook. In the article Money in Sports: Where it all Comes From, and Where it Goes. written by Michael Margulis, he states, “Because at the end of the day, the money is always the motive when it comes to sports.” (Margulis) People get so obsessed with the feeling of winning money that they not only bet on the teams and sports they watch but anything they see. Even though sports betting is relatively new, the numbers have exceeded expectations and are sought out to be one of the biggest ways the industry collects money.
Another way that the sports industry makes money is from fan-based revenue. It is one of the most considerable ways the sports industry generates money and will continue for as long as sports are around. Fan-based revenue is a combination of sports betting, season ticket holders, merchandise. Each sports team has a cult of fans that follow them religiously. People want to feel more connected to the organization, which causes them to spend even more money on games and merchandise. According to a Statista chart, sports merchandise revenue is estimated to make over 15 billion dollars by 2023. Each season tickets prices rise, and new merchandise comes out, causing more sales each year. Gough, Christina. “Sports Merchandising Market North America 2009-2023.” Statista, 1 Mar. 2021, https://www.statista.com/statistics/194226/revenue-from-sports-merchandising-in-north-america-since-2004/. Margulis, Michael. “Money in Sports: Where It All Comes from, and Where It Goes...” Medium, Medium, 18 Nov. 2015, https://medium.com/@michaelmargulis/money-in-sports-where-it-all-comes-from-and-where-it-goes-48461c192031. “More States Embrace Online Sports Gambling as Popularity Soars.” NBCNews.com, NBCUniversal News Group, 11 Dec. 2021, https://www.nbcnews.com/politics/politics-news/more-states-embrace-online-sports-gambling-popularity-soars-n1285169. Serazio, Michael. The Power of Sports: Media and Spectacle in American Culture. New York University Press, 2019. “Streaming, Betting Companies Bolster NFL Ad Market.” Sports Business Journal, https://sportsbusinessjournal.com/Journal/Issues/2022/01/24/In-Depth/NFL-ad-spend.aspx.
Joey O’Donoghue It is evident that sports and sports leagues across the nation generate incredible amounts of revenue every year. It is also no secret the true value people hold to their favorite sports teams, so much so that it is comparable to a religion. People want to worship and support their favorite teams in the best ways possible. With that said, there are a multitude of methods sports teams can use having this knowledge that their fans will go to extreme lengths, and spend large amounts of money, simply to show their support to their beloved sports teams. According to an article by Joseph Pompliano, the NFL missed out on an estimated four billion dollars due to not being allowed fan attendance in 2020 (Pompliano 2021). That is a substantial amount of money that NFL fans generate each year in support for their teams! This tribalism aids sports leagues in generating such incredible revenue. The article also notes that “Anywhere from 10% to 40% of overall revenue comes from in-person-related items like tickets, concessions, merchandise, parking passes, and more” (Pompliano 2021). Once again, the fact that fans account for a considerable percentage in generated revenue truly displays the effect that sports as religion has on generating revenue, and that the fans are an essential part of making money in sports leagues. It must be clear by now how die-hard fans of sports teams can contribute to sports’ league’s success, but how about the neutral fan? In other words, how can leagues attract fans, or intrigue people to watch a game in which their favorite team is not a part of? Sports have adapted tremendously over time and become much higher scoring and have more dramatic finishes (I’m sure individuals who have been keeping up with the NFL playoffs this year can attest to this). Sports fans are generally entertained by matches that involve more offense and less defense, or added drama at the end of them, which has become increasingly common in sports over the years. According to Michael Serazio in The Power of Sports, this modern adaptation was all part of the plan. “A three-point line to juice scoring; and the opportunity for overtime to elongate the dramatic dénouement” (Serazio 160). Serazio notes the features that have been added to basketball over the years to induce scoring and add to the dramatic effects. The three-point line was not always present in basketball, but nowadays teams live and die by the three-point shot! And, it is much more entertaining to the casual fan than boring plays to set up lay-ups. Also, more games are coming down to the wire, giving more people reason to tune in to live sports and enjoy a dramatic finish. Due to these adaptations over the years, intended to increase scoring and drama, viewers have grown substantially in many sports leagues which always translates to more revenue.
The truth is, the list goes on and on for reasons why it is feasible for sports leagues to generate lots of revenue. Another intriguing concept that has become increasingly popular and generating revenue is sports betting and fantasy sports. These relatively newer concepts have added more reason for casual sports fans to watch a multitude of games that they never would have tuned in to previously. According to an article by Abigail Gentrup, “Sportsbooks, casinos, and lottery sponsorships brought in the second-highest dollar figure, with fees growing 140%” (Gentrup, 2022). This shows the fact that sports betting and gambling, which are addictive services, have largely contributed to sports league’s revenue. The reason is, they provide intrigue to people and allow them to have a stake in the games they bet on. Not only is there now drama in the result of the match, but added pressure in the sense that the result of a game will win or lose someone money! This has also contributed to an increased amount of viewership, and generated more revenue for major sports leagues. The world of sports is taking over and has an even brighter future. Works Cited Gentrup, Abigail. “Technology, Gambling Boost NFL's Sponsorship Revenue.” Front Office Sports, 26 Jan. 2022, https://frontofficesports.com/technology-gambling-boost-nfls-sponsorship-revenue/. Pompliano, Joseph. “How Do Professional Sports Leagues & Teams Make Money?” Huddle Up, Huddle Up, 11 May 2021, https://huddleup.substack.com/p/how-do-professional-sports-leagues. Serazio, Michael. The Power of Sports: Media and Spectacle in American Culture. New York University Press, 2019.
There is no doubt that the sports industry generates so much revenue across its sports organizations. In Mike Ozanian’s article “World Most Valuable Sports Teams 2021” Sports Organizations such as the Dallas Cowboys, who are currently the most valuable organization in all of sports have a valuation of $5-7 billion, followed by the New York Yankees at $5.25 billion (Ozanian). There are many reasons why sports industries produce so much revenue, but for now I will stay on the topic of the Dallas Cowboys. Dallas Cowboys owner Jerry Jones purchased the franchise back in 1989 for $150 million, he has since added a modern stadium with luxury boxes, a new facility where the team practices called “The Star”, a merchandising business and licensing agreement with the NFL, an equity stake in the stadium management company “Legends”, as well as investments into e-sports and youth sports (Ozanian). Through all of this, the franchise delivered operating profits of $425 million on revenue of $980 million, which was a record (Ozanian). The top valuable franchises and their wealthy owners do various things such as Jerry Jones that generate revenue for their organizations.
Sports betting is another huge way sports organizations generate revenue, as in John Ourand’s article “Streaming, betting companies bolster NFL ad Market” it is stated that the six biggest gaming brands spent more than $160 million advertising during NFL games since the season began. Caesars Entertainment’s $59.1 million investment was the biggest in the category. Nearly half the overall ad revenue from these brands went to CBS, while Fox and NBC each netted about 21%. The $35 million that FanDuel earmarked for CBS’s NFL telecasts made it the network’s sixth-biggest overall spender since the season began (Ourand). Nearly everyone that I personally know is it into sports betting, to the point where it is like a religion to them, this shows that sports betting among many other things are a monumental reason as to why sports organizations generate so much revenue, and there is good reason as to why it is started to become legal in certain states across the nation.
Jerseys, Merchandise, Ticket Sales, and Concessions are another way sports organizations generate revenue. The fans hold so much power in the amount of revenue that these sports organizations receive, every season fans that are obsessed with their favorite team and buy so many kinds of merchandise and go to countless number of games which connects to buying concession products are all factors in providing these organizations their revenue. In Joe Pompliano’s article “How do Professional Sports Teams Make Money?” it is stated that while in-person, fan-centric revenue items like ticket sales, concessions, and merchandise are typically overshadowed by massive broadcasting agreements, the COVID-19 pandemic was a brutal reminder of just how important they are to the overall sports ecosystem (Pompliano). The estimated COVID-19 revenue losses for each league due to no attendance were noticeable. The NFL lost 44 billion, NBA lost $1.5 billion, the MLB lost $3 billion, and Premier League Football lost $2.5 billion (Pompliano). The worst part of all this is that this was only the revenue loss for 2020, 10%-40% of overall revenue comes from in person related items (depending on the league).
Works Cited
How do professional sports teams make money? Roundhill Investments. (n.d.). Retrieved January 31, 2022, from https://www.roundhillinvestments.com/research/prosports/how-do-professional-sports-teams-make-money Streaming, betting companies bolster NFL ad market. Sports Business Journal. (n.d.). Retrieved January 31, 2022, from https://sportsbusinessjournal.com/Journal/Issues/2022/01/24/In-Depth/NFL-ad-spend.aspx Steinberg, B. (2021, June 16). NBC seeks record $6 million for Super Bowl commercials (exclusive). Variety. Retrieved January 31, 2022, from https://variety.com/2021/tv/news/super-bowl-commercials-price-record-1234998593/
Emily Sweeney The sports industry is one of the biggest money-making organizations in the world. Three reasons that the sports industry is so successful in generating revenue is through the speciation of the sports, the streaming of sports, and the advertisements in sports. “The total worth of the sports industry is estimated to be around US $500 billion. Just under half of this turnover is generated by the spectator sports sector”(Torrens Blog). The generation of this revenue creates a base for the sports industry to become one of the biggest money-making markets. An example of the money generated by the spectator sports sector is in person game sales. Even on top of paying anywhere between $60 for a seat in the nosebleeds or thousands of dollars for box seats at Metlife Stadium, sports spectators are also spending money on parking, food and drinks, and oftentimes merchandise as well. Even with COVID-19 causing many in-person events to struggle with revenue, the sports industry has not been hit too hard in that way. This proves that the speciation of sports plays a huge role in why the industry generates such a large revenue. As technology continues to advance and streaming becomes popular in the world of sports, it also becomes a large revenue pool for the industry as a whole. Recently, there has been an example of this in the NFL. “The National Football League has reached broad new agreements with its television partners, including The Walt Disney Co., NBCUniversal, Fox Corp., ViacomCBS and Amazon” (Weprin). This new deal is somewhat common due to the increased likeability of streaming in today's society. “There are a few big changes to the new rights agreement: ABC will be added to the Super Bowl rotation, and Thursday Night Football rights will be exclusive to Amazon” (Weprin). The presentation of exclusive rights to Amazon for Thursday night games and the addition of ABC to the Super Bowl rotation, along with the other aspects of this deal, will result in a large revenue boost for the NFL. “The new agreement is significantly more lucrative for the league, bringing in more than $100 billion for the league over its 11-year term” (Weprin). As media and streaming continues to grow and advance, this could become an even bigger revenue source than it already is. Along with that, because of the popularity of football in particular, the ability to generate revenue through streaming services increases due to competition for exclusivity. So, because “NFL games are consistently the most popular and most watched programming on television, making the renewals a top priority for the media and entertainment giants, which are looking to the league to keep the traditional TV ecosystem alive, while at the same time allowing them to expand into streaming video” (Weprin).
Lastly, capitalizing on advertisements is another reason why sports organizations generate so much revenue. With sports being so popular, advertisers often spend millions of dollars to play their commercials during games. Now, with streaming being present, sports organizations have created new ways to keep the advertisers interested in playing their commercials during games. For example, “Fox rolled out six-second, split screen (comparatively unskippable) commercials during pitching mound visits and offensive huddle opportunities that were priced at half a million bucks a pop” (Serazio). That’s only for six seconds! Sports have continuously found ways like that to adapt and engulf their advertisers in order to keep them happy and spending money. This is why the revenue generated through advertisements is so high as well as the revenue for the sports industry as a whole. Works Cited Serazio, Michael. The Power of Sports: Media and Spectacle in American Culture. New York University Press, 2019. Weprin, Alex. “NFL Inks Rich New TV Deals with Disney, Fox, NBCUniversal, Viacomcbs and Amazon.” The Hollywood Reporter, The Hollywood Reporter, 19 Mar. 2021, https://www.hollywoodreporter.com/tv/tv-news/nfl-new-tv-deals-abc-fox-nbc-cbs-amazon-4139552/. “Why the Sports Industry Is Booming in 2020 (and Which Key Players Are Driving Growth).” Torrens Blog, https://www.torrens.edu.au/blog/why-sports-industry-is-booming-in-2020-which-key-players-driving-growth#.YfhSvC2z1QI.
Danielle Price Professor Burns MSS420 30 January 2022 Weekly Blog: Question 1 The sports industry is by far one of the most lucrative industries in the world. There are various ways revenue is generated in the sports industry. For instance, advertising, merchandising, and cable revenues are just a few ways. Advertising is the biggest factor. The Super Bowl advertisements alone generate a large sum of money. The commercials during this game are extremely popular, and for some people they are the most attractive reason to watch the game in the first place. Advertisers can pay up to “$6 million for a 30-second spot in the event” (Steinberg). These numbers are staggering. The amount that people are willing to pay to advertise their products and services is very high especially during this game due to how many viewers they have. Further, in a CBS broadcast, the Super Bowl LV in 2021 was said to have “generated $545 million in in-game advertising” (Steinberg). It is clear that advertising is a significant money maker for the sports industry, and the Super Bowl is just one prime example. Another way revenue is generated in sports is through merchandising. Typically, if one loves a sport, or a sports team they will have some sort of merchandise representing them. Someone could own a shirt, jersey, shorts, a water bottle, or even a bobblehead which all adds up. For example, an item that became extremely popular was a 2019 adjustable hat for the Raptor’s. Many Canadians were buying this product for 42 dollars. If 2,500 were sold that amounts to 105,000 dollars. The money coming in as a result of selling any of these products is sport revenue (Spma). Over time, the sum of profit from sold merchandise is massive. My brother as a reference owns about 25 jerseys for various professional teams. This is just one person; one sports fanatic and he has paid for about 25 jerseys. Nonetheless, this is referring to just jerseys that he owns. Merchandise might be considered a much smaller factor toward sports revenue, but even this adds up. Lastly, cable revenues such as the Entertainment and Sports Programming Network (ESPN) factor greatly into generated revenue. Networks such as this buys the rights to the games, which leads to revenue. ESPN is said to be a “worldwide leader in cable revenues, pulling in nearly $8 per household in monthly subscriber fees…” (Serazio 7). ESPN is a prime example of this because they gain the rights to have games broadcasted by buying them from organizations such as major league baseball (MLB) which in turn pays the teams. Aside from ESPN, “regional sports networks are also some of the most expensive channels for distributors to maintain…” (Serazio 7). This includes networks such as ABC, CBS, FOX, and NBC which “accounts for more than one-third of all ad sales” (Serazio 7). Therefore, sports programming, and cable revenues also play a role in generating revenue within this industry. Works Cited Serazio, Michael. The Power of Sports: Media and Spectacle in American Culture. New York University Press, 2019. Spma. “Examples of Revenue and Expenses in Various Types of Sport Organizations.” SPort MAnagement (SPMA) Hub, 18 Mar. 2020, https://sportmanagementhub.com/examples-of-revenue-and-expenses-in-sport/. Steinberg, Brian. “NBC Seeks Record $6 Million for Super Bowl Commercials (Exclusive).” Variety, Variety, 16 June 2021, https://variety.com/2021/tv/news/super-bowl-commercials-price-record-1234998593/.
As we know, sports is one of the biggest money-making industries in the world exceedingly surpassing things like film and other entertainment areas. According to Michael Serazio in the book titled The Power of Sports: Media and Spectacle in American Culture, Serazio states that “depending on which estimate one consults, the global sports industry is pegged somewhere between $200 and $700 billion. Given that this was, by one count, 60 percent more than the value of the film market” (Serazio). When we take a deeper look into what exactly is helping to generate these large amounts of money to the sports industry, Serazio continues by stating that “nearly a quarter of all Americans spend money at least once a month on sports, contributing to nearly $70 billion worth of tickets, broadcast rights, sponsorships, and apparel” (Serazio).
If you are a sports fan, you can take a look in your closet right now knowing that you own at least one or more articles of clothing or objects that supports your favorite team. Once you start to collect these items it becomes impossible to stop. For example, I own at least 5 jerseys for my favorite hockey team and a bunch of other items to decorate my room and show support for my team. It could be something as simple as a hat, sports teams know that they can make a lot of their money on apparel because they know people love to show support for their favorite teams, especially at games. According to an article from Front Office Sports by Pat Evans “global licensed sports merchandise sales were $26.47 billion in 2018, with the potential to jump to nearly $34 billion by 2023” (Evans). Although jersey’s are one of the most popular merchandise you can have “consumers are now focused on buying pieces they can wear to a casual Friday at work, at the bar, or the golf coure.Teams are increasingly partnering with more lifestyle- focused apparel brands like the Vegas golden Knights and its recent partner with Lululemon to create Golden Knights- branded athleisure products. Leagues like the NBA and NHL have allowed teams to build out local licensed apparel to sell in the venue, leading to significant revenue growth. The broader the assortment becomes, the broader the target demographic gets, and you can expand beyond the core consumer, and you’re not bumping up in the closets full of jerseys” (Evans). As we can see, merchandise revenue is continuously growing and adding to sports revenue due to new opportunities in merchandise and its partnerships.
To continue, broadcast rights are another big money-making tactic for the sports industry. NFL games are among the most popular and most watched on television which is why it was fitting to add new TV agreements with multibillion- dollar companies including giving Super bowl rights to top companies like ABC and Thursday Night Football rights to Amazon. The article NFL Inks Rich New TV Deals With Disney, Fox, NBCUniversal, ViacomCBS and Amazon enunciates that “ the NFL last inked deals for the Sunday and Monday games with Disney, NBC, Fox and CBS in 2011, in deals valued at about $27 billion. The new agreement is significantly more lucrative for the league, bringing in more than $100 billion for the league over its 11-year term” (Weprin). These new deals are providing sports fans with a wider span of platforms to access games on adding increasing stability of sports leagues around the world. “The deal with Amazon is significant as it will be the first time a tech company has secured the primary TV rights to a slate of NFL games” (Weprin). How awesome is it that you can now watch live NFL games on amazon?
Serazio, Michael. The Power of Sports: Media and Spectacle in American Culture. New York University Press, 2019.
“Sports Merchandise Opportunities Growing beyond Jerseys, Logo Tees.” Front Office Sports, 5 Aug. 2020, https://frontofficesports.com/sports-merchandise-growth/. Weprin, Alex. “NFL Inks Rich New TV Deals with Disney, Fox, NBCUniversal, Viacomcbs and Amazon.” The Hollywood Reporter, The Hollywood Reporter, 19 Mar. 2021, https://www.hollywoodreporter.com/tv/tv-news/nfl-new-tv-deals-abc-fox-nbc-cbs-amazon-4139552/.
Jason Vent Sports are a multibillion-dollar business and generate extreme amounts of revenue each year through a variety of streams. One of the largest ways that sports leagues bring in revenue is through media rights for companies desiring to display them for their audience. Most leagues have exclusive contracts with a variety of media corporations that allow them to show the leagues games for their viewers in exchange for a hefty amount of capital being paid to the league. CBS and FOX have had a majority hold over the viewing rights for the NFL for several years since the leagues last media contract was signed in 2011. In the new deal just signed, CBS and FOX will keep hold of Sunday afternoon football games, NBC will hang onto Sunday night football and ESPN will continue to have the rights to Monday Night Football. The changing aspects included in the deal allow ABC to be added to the Super Bowl viewership rights rotation for two years and Amazon will have exclusive rights to Thursday Night Football, previously owned by FOX. The deal will run through the 2033 season and will provide the NFL with over $100 billion, a dramatic increase from the prior deal signed in 2011 that only earned the league $27 billion over its waning 11-year run. TV rights are one of the main revenue streams for sports organizations as shown by the massive amounts of cash that the NFL will bring in with the signing of this new deal that will come into effect next season. Sponsorship revenue from external companies is also a major source of revenue for leagues like the NFL. The leagues sponsorship revenue grew 12% over this season to $1.8 billion despite the leagues franchises only bringing in an additional 4% of revenue for rights fees. Sponsorship in total for the league has risen 23% as more companies like Microsoft, DraftKings, FanDuel and Anheuser-Busch have all signed contracts with the league worth hundreds of millions and in some cases billions of dollars to have their products and services be advertised with connection to the league to its hundreds of millions of fans all season. A third revenue stream for the league and sports leagues all over the world is ticket and merchandise sales which bring in a constant revenue all season and all year long. The NFL is partnered with Fanatics and Nike in an exclusive agreement that allows for all Nike branded, NFL official apparel to be sold through Fanatics on the league’s website. This deal may be worth much less than the revenue generated by media agreements but it along with the ticket sales and concessions generated by each team individually is what allows them to keep up with their average almost half a billion-dollar yearly expenses. Teams earn an average of $7 million for each home game played in ticket and concessions sales which no slight source of capital coming by way of each stadiums 70,000 or so seats and average ticket prices of $151, along with all of the high priced concessions sold at all sporting events in the U.S.
Works Cited: “Technology, Gambling Boost NFL’s Sponsorship Revenue.” Front Office Sports, 26 Jan. 2022, frontofficesports.com/technology-gambling-boost-nfls-sponsorship-revenue/. Accessed 31 Jan. 2022. Eckstein, J. (2022, January 30). How the NFL makes money: TV is king, streaming and gambling on Horizon. Investopedia. Retrieved January 31, 2022, from https://www.investopedia.com/articles/personal-finance/062515/how-nfl-makes-money.asp Weprin, A., 2022. NFL Inks Rich New TV Deals – The Hollywood Reporter. [online] Hollywoodreporter.com. Available at: [Accessed 31 January 2022].
Alex Donald The sports industry has been one of the most dominant money making industries since at least the end of the 19th century and there had been a lot of ways that each organization in the industry had been successful to make a profit. For example, I’ll be explaining about how the NBA makes a successful revenue. The NBA revenue is broken down into 4 factors: brand, market, arena, and sport revenues. Arena revenue basically covers profits from the arena where the team plays. It involves ticket prices, merchandise, suite prices, premium seating, concessions, and so on. Also teams that own their arena can also make a profit through non sports related entertainment like concerts for example, if the Staples Center hosts a concert the Los Angeles Lakers and Clippers can get a cut as well. Market revenue is basically the size of the number of people attending a team's home game. Market size really depends on the team's performance throughout the season. For example, the Golden State Warriors might have a higher income in market size than the Oklahoma City Thunder’s income. Also a team with a large market revenue can attract free agents. Brand revenue is basically market size that comes from sales from people who buy a team jersey that doesn’t live in the city they play for. For example, a kid that lives in Miami buys a Lakers jersey creates brand revenue or income for the Lakers. Brand revenue can also increase a player's income through their clothing branding. Players like LeBron James, Steph Curry, Micheal Jordan, Allen Iverson, Dwayne Wade, and so on have their own branding and signed with sports companies such as Adidas, Nike, Champion, Under Armour, and so on. Sports revenue is basically to make equality between large and small market teams in the league which implements trades between teams. However, that is basically how NBA teams and players get their money. NBA owners however, get their money in a more different way. “A simple answer would be that NBA teams and owners make money from a combination of ticket sales, suite sales, naming rights, and local TV and radio deals. Additionally, they also have league wide media, merchandising, and sponsorship revenues”. However, sometimes NBA teams can lose money for a lot of things like having a worst season, choking their leads in the playoffs or finals, and even losing their star player. For example, after the 2018 NBA Finals when the Cleveland Cavaliers got sweaped by the Golden State Warriors, the Cavs lost about 4% in their $1.28 billion value on their operating basis after they traded LeBron James to the Los Angeles Lakers. This process also works for other sports leagues as well. Viju, Joe. “How do NBA Teams Make Money: A Complete NBA Revenue Breakdown”. The Sports Rush. 10 Dec, 2021 https://thesportsrush.com/nba-news-nba-news-how-do-nba-teams-make-money-a-complete-nba-revenue-breakdown/
Matthew Miller
ReplyDeleteIt is not a secret that sports represent a billion-dollar business. There are various ways that these organizations make a profit. I am going to focus on the NFL. Each NFL stadium has at least 60,000 seats. The price of a seat depends on how close you are to the field and if you are in box seats or a club area. Some tickets are only $75 while others could be roughly $1000. If we were to say that every ticket is $75 and 60,000 of them get sold, we would have a total amount of 4.5 million dollars in ticket sales alone, assuming every ticket is only $75. It also costs money to park at the stadium along with concessions. Another way that NFL teams make money is because “NFL teams have multi-billion-dollar contracts with television providers.” (Armbruster 2021). My family has had season tickets for the New York Giants for over 50 years, and the cost of tickets keeps increasing every year, even though the talent being put on the field is decreasing. Even though a team may not be good, fans will still spend money to see them not only because they want to support their team but because sports is a religion. For me, the Giants could be 17-0 or 0-17, and I still would not hesitate to go to the game. Having people who are obsessed with going to games will mean that NFL ticket sales will continue to increase. Sports teams can charge whatever they want for concessions and people are willing to pay that price because they may want food, a drink, or even a souvenir from the team store. The bottom line is that these teams can charge whatever they want for items, and no one will even bat an eye.
With the current Pandemic, some season ticket holders are not renewing their tickets out of an abundance of caution. What this does is open up seats for other people to buy, and with the NFL, they will never be struggling to get fans to attend games. In Mike Ozanian’s article, “World’s Most Valuable Sports Teams 2021” he mentions that “The average value of the 50 most valuable sports teams has jumped 9.9% from last year, to $3.4 billion, up 55% from five years ago.” (Ozanian 2021). Most NFL stadiums have built new stadiums within the past 20 years, and to offset the cost of building a new stadium, ticket prices have increased, and people are more than happy to pay for them because they want to experience the game in the new stadium. Ozanian says that the top 50 teams on Forbes list of most valuable teams “come from four sports… all of which are propelled by ever-escalating media rights deals…”. Television providers are willing to shell out a large amount of money to get the rights to a team because they realize that the team has an extensive viewership which will, in turn, generate a profit for both sides.
Matthew Miller Cont'd
DeleteNFL Games are generally watched on Fox, NBC, CBS, Amazon, ESPN, and the NFL Network, but the NFL recently inked a new TV deal with Disney, Fox, NBCUniversal, Viacom CBS, and Amazon. In Alex Weprin’s article, he says, “NFL games are consistently the most popular and most watched programming on television, making the renewals a top priority for the media and entertainment giants… while at the same time allowing them to expand into streaming video.” (Weprin 2021). NFL games are among the most-watched, if not the most-watched live programming, and there is no reason to believe that this would change anytime soon as the game of football continues to get better and better. With all these TV companies throwing money at the NFL, the NFL will continue to be one of the most significant money-making industries in the world, let alone the sports world.
Armbruster, C. (2021, November 10). How do NFL teams make money? TV, sponsorships, ticket sales.. AS.com. Retrieved January 28, 2022, from https://en.as.com/en/2021/11/10/nfl/1636507077_555634.html
Ozanian, M. (2021, May 14). World's most valuable sports teams 2021. Forbes. Retrieved January 28, 2022, from https://www.forbes.com/sites/mikeozanian/2021/05/07/worlds-most-valuable-sports-teams-2021/?sh=2bc779c63e9e
Weprin, A. (2021, March 19). NFL inks rich new TV deals with Disney, Fox, NBCUniversal, Viacomcbs and Amazon. The Hollywood Reporter. Retrieved January 28, 2022, from https://www.hollywoodreporter.com/tv/tv-news/nfl-new-tv-deals-abc-fox-nbc-cbs-amazon-4139552/
It is clear that sports are one of the biggest money-making industries in the world. Streaming, merchandise, and sponsorships bring in the most revenue to sports organizations. Before streaming, people had to watch sports events and games on major networks. Games were available on CBS, NBC, ABC, and later Fox. People needed to have a cable box and a tv, but now people can easily stream games right from their phone. Another issue was that people did not have access to all games across the country, and would have to spend extra money through the cable company and purchase packages. With new advancements of streaming services, there have been increase in revenue for sports organizations. According to “Streaming, Betting Companies Bolster NFL Ad Market,” by John Ourand from the Sports Business Journal, “DirecTV Stream was the biggest spender. Its $125 million in ad sales is as much as the next five companies in the category. CBS (51%) took the lion’s share of DirecTV Stream’s campaign, with NBC (17%), Fox (16%) and ESPN (16%) sharing the rest” (Ourand 7). In total, there was $304 million spent on in-game ads between ten brands. This revenue was up by 74% from last year. The NFL has been in the works of exclusive streaming with Amazon that would start in 2023. According to “NFL Inks Rich New TV Deals With Disney, Fox, NBCUniversal, ViacomCBS and Amazon,” by Alex Weprin from The Hollywood Reporter, “ABC will be added to the Super Bowl rotation, and Thursday Night Football Rights will be exclusive to Amazon” (Weprin 3). This is expected to bring in $100 billion to the NFL. Mike Hopkins, senior vp of Prime Video and Amazon Studios, stated that “NFL games are the most watched live programming in the United States, and this unprecedented Thursday Night Football package gives tens of millions of new and existing Prime members exclusive access to must-watch live football on Prime video” (Hopkins, Weprin 9). Overall, this provides fans with a broad selection of content and brings in a huge revenue to sports organizations.
ReplyDeleteAnother reason why sports organizations generate so much revenue is because of merchandise. When fans wear merchandise not only are they bringing tremendous amounts of money into the sports organization, but they are literal walking advertisements. According to “Strategies for Sport Organizations to Capitalize on Merchandising.” by Dr. Bonnie Tiell and Dr. Danielle Foster, “The 2020 U.S. market value for collegiate and professional licensed sports merchandise is estimated at $14.82 billion with the MLB and NFL generating approximately $4 billion each from the sale of products bearing team logos” (Tiell, Foster 5). The NFL Dallas Cowboys and MLB New York Yankees are ranked highest for revenue in merchandise sales. One-third of the U.S. Market is connected to collegiate level merchandise such as University of Alabama Crimson Tide, University of Texas Longhorns and the University of Notre Dame Fighting Irish. Another reason sports organizations bring in so much revenue is from sponsorships. In the article, “Microsoft among deals that helped NBA set record $1.46 billion in sponsorship revenue,” by Jabari Young, the Brooklyn Nets among 26 other NBA clubs have patch deals, meaning they wear logos on their jersey. The Brooklyn Nets, Milwauke Bucks, and Indiana Pacers have an agreement with Motorola (Young 7). Peter Laatz stated that “Some teams are getting more than $15 million per year for jersey patches and that is close to the $30 million a naming rights sponsorship can bring in annually” (Laatz, Young 8). Overall, streaming services, merchandising, and sponsorship are the reasons why sports organizations bring in so much revenue.
ReplyDeleteDr. Tiell, Bonnie,Dr. Foster, Danielle. “Strategies for Sport Organizations to Capitalize on Merchandising.” Sports Destination Management, https://www.sportsdestinations.com/management/economics/strategies-sport-organizations-capitalize-merchand-21654.
Ourand, John. “Streaming, Betting Companies Bolster NFL Ad Market.” Sports Business Journal, 24 Jan. 2022, https://sportsbusinessjournal.com/Journal/Issues/2022/01/24/In-Depth/NFL-ad-spend.aspx.
Weprin, Alex. “NFL Inks Rich New TV Deals with Disney, Fox, NBCUniversal, Viacomcbs and Amazon.” The Hollywood Reporter, The Hollywood Reporter, 19 Mar. 2021, https://www.hollywoodreporter.com/tv/tv-news/nfl-new-tv-deals-abc-fox-nbc-cbs-amazon-4139552/.
Young, Jabari. “Microsoft among Deals That Helped NBA Set Record $1.46 Billion in Sponsorship Revenue.” CNBC, CNBC, 29 June 2021, https://www.cnbc.com/2021/06/29/nba-set-record-1point46-billion-in-sponsorship-revenue-this-season.html.
Nicole Clemons
ReplyDeleteSports bring in an insanely large amount of revenue year after year. Teams have been capitalizing on ads, merchandise, and now streaming services. We see commercials of professional athletes partnering with streaming services. Hulu had Damian Lillard and Skylar Diggins-Smith be a part of their commercial to promote live sports to the service. Many leagues are joining these services to spread the views of their games. A lot of people have decided to cut their cable subscriptions and switch to streaming. If leagues did not join in on the streaming platforms, many people would miss the games. The NFL constantly sits atop the list of the most watched, Amazon decided to partner with the NFL and secure a spot no other streaming service has. “The deal with Amazon is significant as it will be the first time that a tech company has secured the primary TV rights to a slate of NFL games.”(Weprin 2021).
The pandemic caused, and a lot of teams and leagues to lose money. No games were being played fans were not in attendance and revenue was dropping. The leagues needed a way to bring in money. The NHL looked at merchandise to bring in money. They introduce the “Reverse Retro" collection. Which was a new jersey highlighting nostalgia. “The “throwback” touchpoints appeal to older fans who remember Stanley Cups of the past, while also capitalizing upon a younger audience with Adidas’ unique designs that fit seamlessly into the current popularity of streetwear and athleisure.”(Pitré 2021). By bringing together multiple generations with one jersey more people went out and bought the jersey. When the jerseys came out, I wanted so many of them from favorite teams to the design and colors on others. I think this was a great idea from the NHL jerseys are such a huge part of the fan experience. Being able to wear the same jersey as your favorite athletes, and to collect various jerseys over the years is something very special to fans.
Nicole Clemons Cont'd
DeleteAdvertising is also having a huge impact on sports and revenue, a prime example of this is the Super Bowl. The Super Bowl is one if not the most watched event in America. A chance for people to see their teams go head-to-head for the chance to be Super Bowl champions. There are many people who watch the Super Bowl for commercials. Besides the game a lot of the talk is about the commercials. It has become a tradition to watch the commercials to tell your friends the next day which one was your favorite. Which brings advertisers flooding in to have their brand be published for 30 seconds. This year prices will soar to a new high. “Eager to generate millions of dollars in revenue from the Big Game, the Comcast-owned conglomerate is talking to potential advertisers about a price tag of $6 million for a 30-second spot in the event.”(Steinberg 2021). No matter how expensive advertisers will spend the money to have their brand shown on a commercial during the Super Bowl.
Weprin, Alex. “NFL Inks Rich New TV Deals with Disney, Fox, NBCUniversal, Viacomcbs and Amazon.” The Hollywood Reporter, The Hollywood Reporter, 19 Mar. 2021, https://www.hollywoodreporter.com/tv/tv-news/nfl-new-tv-deals-abc-fox-nbc-cbs-amazon-4139552/.
Pitré, Katherine E. “Top 5 Reverse Retro Jerseys (That Might Actually Be Worth Your Money).” F Newsmagazine, 8 Feb. 2021, https://fnewsmagazine.com/2021/02/top-5-reverse-retro-jerseys-that-might-actually-be-worth-your-money/.
Steinberg, Brian. “NBC Seeks Record $6 Million for Super Bowl Commercials (Exclusive).” Variety, Variety, 16 June 2021, https://variety.com/2021/tv/news/super-bowl-commercials-price-record-1234998593/.
Brianna Gonsalves
ReplyDeleted to something that was once just for the fun of the game to a billion dollar industry that has taken over a lot of the ways in which media and value has been changed. There are many ways in which sports accumulate this high number of revenue but the three that will be focused on in this blog post are merchandising and advertising, branding, and the teams.
Merchandising and advertising are super important in the world of sports because of how it not only advertises for the team but for the wide audience, companies will pay good money for their commercials to show up in a slot during a big game. The Super Bowl is a great example of this. The Super Bowl is one of the most watched events in the nation, having millions upon millions of people wanting to watch for either the football itself or the halftime show. The commercial breaks are filled up by some of the most creative and well thought out commercials because of the money in which the companies pay in order for their commercial to be aired throughout this event. This brings in a huge increase in revenue because of how much these companies are paying. On the other side of merchandising and advertising is apparel. Apparel consists of jerseys, tshirts, hats and many other things showing one’s admiration or appreciation of a certain team. In an article from the Medium titled Money in Sports: Where it All Comes From, and Where it All Goes written by Michael Margulis, it explains how merchandising and advertising come in third for rounding out the overall revenue for sports, “due to the fact that it again appeals to the fans, giving them the ability to purchase gear and apparel that the team would wear, making them feel more connected to the organization,” (Margulis). This is something that every fan gives their money to so they have things to wear to games whether they are at home or away.
Branding promotes products in order to get consumers to purchase it. Branding has been around a very long time in the sports world and allowed for sports to be so highly invested in. In the book The Power of Sports; Media and Spectacle in American Culture by Michael Sezario, it explains how branding has been around for so long and is evolving in sports every day, “Professional sport boosted sales for the sporting goods and and athletic clothing industries in the nascent years, it is easy to overlook but every single NBA game is a long-form ad for Spalding,” (Sezario, 106). People who engage in sports are more likely to want to go to a sports store and buy exactly what their favorite players use to be more like them. This gives the stores that contain these products even more revenue because of the way people are enticed to these products.
Brianna Gonsalves
DeleteThere are certain professional teams that have a bigger popularity and a more established franchise than other teams. These teams have very well known players that are used as the spokesperson for the team and are sent out to do more promotional branding. This also gives the overall team more revenue because of their immense popularity. In an article from Forbes titled The World’s Most Valuable Sports Empire 2022, written by Mike Ozanian, it explains how these teams are branching out to make even more money and raise their popularity by even more, “The New York Yankees are Major League Baseball’s most valuable franchise, worth $5.25 billion by Forbes’ count last year. But the team’s owners have stopped there Yankee Global Enterprises also has stakes in reigning MLS champion New York City FC, the YES Network and Legends Hospitality,” (Ozanian). These efforts raised their total sports property up to $6.81 billion. Teams like this have ways to make the franchise more revenue because they know that their popularity is at a steady and all they have to do is keep giving their fans what they want and this will continue to raise the overall sport industry revenue.
Works Cited
Margulis, Michael. “Money in Sports: Where It All Comes from, and Where It Goes...” Medium, Medium, 18 Nov. 2015, https://medium.com/@michaelmargulis/money-in-sports-where-it-all-comes-from-and-where-it-goes-48461c192031.
Ozanian, Mike. “The World's Most Valuable Sports Empires 2022.” Forbes, Forbes Magazine, 25 Jan. 2022, https://www.forbes.com/sites/mikeozanian/2022/01/21/the-worlds-most-valuable-sports-empires-2022/?sh=633f893e3219.
Serazio, Michael. The Power of Sports: Media and Spectacle in American Culture. New York University Press, 2019.
Brandon Krikorian
ReplyDeleteProfessor Burns
30 January 2022
Weekly Blog
Sports organizations are some of the most powerful organizations in the world in terms of the amount of money that they make. Sports is something that is done all over the world and has a reach that not many other organizations can compare with. What drives sports is the amount of money that they make because without the money, then teams would not be able to operate on a yearly basis. Each of the four main sports makes huge amounts of money, but the NFL stands out the most as they easily make the most money. There are multiple factors as to why sports are able to make as much money as have been. One of those reasons is just the sheer product that is out on the field that in turn brings in the enormous amounts of money that each league can make. In fact, 106 sports franchises are valued at more than $1 billion across all sports worldwide. Specifically talking about the NFL, they have 29 of the 50 most valuable sports franchises in the world which is just incredible when you think about the amount of power that means for the NFL. In total, the NFL generated $13 billion in the 2018-2019 season. Another reason is TV contracts and how much it can profit the league. Again, sticking with the NFL they will collect $54.6 billion from TV contracts from FOX, CBS, NBC, ESPN, and DirecTV. The power that TV contracts can have over a league is massive as seen by those numbers that the NFL can bring in. Sticking with TV, advertisements play a huge role in the profit of sports leagues. Automakers were the biggest spenders for in-game ads, as they accounted for nearly $830 million. On the same hand, auto part companies spent around $810 million on in-game ads. These were just examples of the biggest spenders which is not even counting other companies that spend money to have their ads be played during NFL games. Every regular season draws millions of viewers which is why companies pay so much for ads, but that price goes up during the playoffs as even more eyes are watching the games and that number goes up even more for the Super Bowl. The last factor is a new one that has only come into play over the last few years and that is sports betting. Over the last few years, sports betting has become more acceptable and the NFL has followed in that thinking. The biggest sportsbooks in the world, DraftKings, FanDuel, and Caesars, have all signed 5-year deals with the NFL to become their official sportsbook for a combined worth of $1 billion. Now with more states legalizing betting, that only helps the NFL and their profit. In a few years, most states if now every state will have sports betting be legal which can allow just about anyone across the country allowed to place a bet. Not only people place bets will improve profit, but those sportsbooks will also pay for ads which they could not have done before they became official sponsors with the NFL.
“Streaming, Betting Companies Bolster NFL Ad Market.” Sports Business Journal, sportsbusinessjournal.com/Journal/Issues/2022/01/24/In-Depth/NFL-ad-spend.aspx.
“Technology, Gambling Boost NFL's Sponsorship Revenue.” Front Office Sports, 26 Jan. 2022, frontofficesports.com/technology-gambling-boost-nfls-sponsorship-revenue/.
Thursday, TJ Mathewson |. “Major Sports Leagues All Make a Lot of Money, Here's How They Do It:” Global Sport Matters, 24 June 2021, globalsportmatters.com/business/2019/03/07/tv-is-biggest-driver-in-global-sport-league-revenue/.
Danielle Zerbo
ReplyDeleteThere are a multitude of reasons as to why sports organizations generate so much revenue, despite being just a game at its core. The first reason as to why sports organizations generate so much revenue is because they can capitalize on their viewership using advertisements. Television networks know that millions of people watch NFL games every week. Therefore, they know that companies are willing to pay a large amount of money to have their advertisements played during commercial breaks. They use this opportunity to generate a large amount of revenue for themselves. A specific example where this way of generating revenue can be understood is the amount of money NBC charges for Super Bowl commercials every year. For the upcoming Super Bowl, NBC is charging companies about six million dollars for thirty seconds of screen time between plays (Steinberg). They know that companies are desperate to get their products in front of such a large audience. That is why they are using this opportunity to, “seek a 9.1% increase over the $5.5 million CBS sought for 30 seconds of ad time in 2021” (Steinberg). That is just one way that sports organizations are generating revenue.
In order for companies such as CBS and NBC to charge money for commercials during any sporting event, they must have the rights to broadcast that game. Obtaining the rights to any NFL game, let alone the Super Bowl, requires a large deal that is mutually beneficial to both sides. One of the more recent television deals was between the NFL and Disney, Fox, Amazon, NBCUniversal and ViacomCBS. This deal allocated rights to ABC for the Super Bowl rotation, as well as giving Amazon the sole rights to Thursday Night Football. This deal has a term of eleven years and will bring in over $100 million for the league during that span (Weprin). It is a monumental deal for the NFL. It proves how valuable the league truly is and demonstrates yet another way that sports organizations generate money.
In addition to television rights and commercial revenue, another way that sports organizations generate revenue is through sports betting. It is abundantly clear that sports betting generates an obscenely large revenue every year. The ability to bet on sports is given to the individual states. States have noticed the amount of potential revenue sports betting can generate and have slowly started to legalize it. The most recent state expected to legalize sports betting is North Carolina. The bill that would be passed would immediately allow potential revenue for the state. The bill allows, “for at least ten, but no more than twelve online sports wagering operators to ‘accept sports wagers in the state’” (North Carolina lawmakers to vote to allow online sports betting). However, to become an operating sports wager, a license must be purchased for $500,000, and must be renewed after five years for $100,000. ((North Carolina lawmakers to vote to allow online sports betting). This is a logical investment for sports books because they know that they will make their money back in bets in a short time. This is yet another way that sports organizations generate revenue for a wide variety of people and companies.
DeleteWorks Cited
“North Carolina Lawmakers to Vote to Allow Online Sports Betting.” Sports Business Journal, 2022 Leaders Group, 31 Jan. 2022, https://www.sportsbusinessjournal.com/Daily/Issues/2022/01/31/Betting/NC-Betting.aspx.
Steinberg, Brian. “NBC Seeks Record $6 Million for Super Bowl Commercials (Exclusive).” Variety, Variety Media, LLC., 16 June 2021, https://variety.com/2021/tv/news/super-bowl-commercials-price-record-1234998593/.
Weprin, Alex. “NFL Inks Rich New TV Deals with Disney, Fox, NBCUniversal, Viacomcbs and Amazon.” The Hollywood Reporter, Penske Media Corporation, 19 Mar. 2021, https://www.hollywoodreporter.com/tv/tv-news/nfl-new-tv-deals-abc-fox-nbc-cbs-amazon-4139552/.
The sports industry is one wealthiest out there. It brings people together from all over and has one of the largest followings. Each season brings in a new set of people that watch and put money on games. Sports teams collect money through various ways, such as merchandise, advertising, fans, streaming, betting, and sponsorships. In the book titled The Power of Sports: Media and Spectacle in American Culture, Micheal Sezario states, “the global sports industry is pegged somewhere between $200 $700 billion. Given that this was, by one count, 60 percent more than the value of the film market.” (Serazio) The entertainment and streaming side of sports has changed throughout the years and has become an important way the industry makes money. They not only collect money from the streaming services themselves but the marketing and advertising side as well. Because sports are so highly watched, companies feel as if this is a great way to get their products viewed. According to the article Streaming, betting companies bolster NFL ad market John Ourand streaming companies were the top three advertising buyers for the NFL, “Ten brands accounted for nearly all of the $304 million spent on in-game ads across all the networks, a figure that is up 74% from last year”. (Ourand) The NFL is named one of the most valuable and most significant places for branding opportunities. Each year people fight for commercial slots in the Super Bowl because it is one of the most-watched events. Other sports have been on a decline, so companies fight for spots for the NFL. NFL games are watched on Fox, CBS, NBC, ESPN, and NFL Network, which are all companies that spent millions of dollars on their ads.
ReplyDeleteNow that gambling and online betting is legal in some places, this has become another money pit for the sports industry. According to the article, More states embrace online sports gambling as popularity soars by Molly Hudson, “Sports betting overall generated $3.16 billion in the first ten months of 2021, surpassing the total revenue for the same 10-month period of 2020 by nearly 230 percent.” (Hudson) These companies, such as DraftKings, FanDuel, and Caesars, have partnered with the NFL making them their official sportsbook. In the article Money in Sports: Where it all Comes From, and Where it Goes. written by Michael Margulis, he states, “Because at the end of the day, the money is always the motive when it comes to sports.” (Margulis) People get so obsessed with the feeling of winning money that they not only bet on the teams and sports they watch but anything they see. Even though sports betting is relatively new, the numbers have exceeded expectations and are sought out to be one of the biggest ways the industry collects money.
Another way that the sports industry makes money is from fan-based revenue. It is one of the most considerable ways the sports industry generates money and will continue for as long as sports are around. Fan-based revenue is a combination of sports betting, season ticket holders, merchandise. Each sports team has a cult of fans that follow them religiously. People want to feel more connected to the organization, which causes them to spend even more money on games and merchandise. According to a Statista chart, sports merchandise revenue is estimated to make over 15 billion dollars by 2023. Each season tickets prices rise, and new merchandise comes out, causing more sales each year.
ReplyDeleteGough, Christina. “Sports Merchandising Market North America 2009-2023.” Statista, 1 Mar. 2021, https://www.statista.com/statistics/194226/revenue-from-sports-merchandising-in-north-america-since-2004/.
Margulis, Michael. “Money in Sports: Where It All Comes from, and Where It Goes...” Medium, Medium, 18 Nov. 2015, https://medium.com/@michaelmargulis/money-in-sports-where-it-all-comes-from-and-where-it-goes-48461c192031.
“More States Embrace Online Sports Gambling as Popularity Soars.” NBCNews.com, NBCUniversal News Group, 11 Dec. 2021, https://www.nbcnews.com/politics/politics-news/more-states-embrace-online-sports-gambling-popularity-soars-n1285169.
Serazio, Michael. The Power of Sports: Media and Spectacle in American Culture. New York University Press, 2019.
“Streaming, Betting Companies Bolster NFL Ad Market.” Sports Business Journal, https://sportsbusinessjournal.com/Journal/Issues/2022/01/24/In-Depth/NFL-ad-spend.aspx.
Joey O’Donoghue
ReplyDeleteIt is evident that sports and sports leagues across the nation generate incredible amounts of revenue every year. It is also no secret the true value people hold to their favorite sports teams, so much so that it is comparable to a religion. People want to worship and support their favorite teams in the best ways possible. With that said, there are a multitude of methods sports teams can use having this knowledge that their fans will go to extreme lengths, and spend large amounts of money, simply to show their support to their beloved sports teams. According to an article by Joseph Pompliano, the NFL missed out on an estimated four billion dollars due to not being allowed fan attendance in 2020 (Pompliano 2021). That is a substantial amount of money that NFL fans generate each year in support for their teams! This tribalism aids sports leagues in generating such incredible revenue. The article also notes that “Anywhere from 10% to 40% of overall revenue comes from in-person-related items like tickets, concessions, merchandise, parking passes, and more” (Pompliano 2021). Once again, the fact that fans account for a considerable percentage in generated revenue truly displays the effect that sports as religion has on generating revenue, and that the fans are an essential part of making money in sports leagues.
It must be clear by now how die-hard fans of sports teams can contribute to sports’ league’s success, but how about the neutral fan? In other words, how can leagues attract fans, or intrigue people to watch a game in which their favorite team is not a part of? Sports have adapted tremendously over time and become much higher scoring and have more dramatic finishes (I’m sure individuals who have been keeping up with the NFL playoffs this year can attest to this). Sports fans are generally entertained by matches that involve more offense and less defense, or added drama at the end of them, which has become increasingly common in sports over the years. According to Michael Serazio in The Power of Sports, this modern adaptation was all part of the plan. “A three-point line to juice scoring; and the opportunity for overtime to elongate the dramatic dénouement” (Serazio 160). Serazio notes the features that have been added to basketball over the years to induce scoring and add to the dramatic effects. The three-point line was not always present in basketball, but nowadays teams live and die by the three-point shot! And, it is much more entertaining to the casual fan than boring plays to set up lay-ups. Also, more games are coming down to the wire, giving more people reason to tune in to live sports and enjoy a dramatic finish. Due to these adaptations over the years, intended to increase scoring and drama, viewers have grown substantially in many sports leagues which always translates to more revenue.
The truth is, the list goes on and on for reasons why it is feasible for sports leagues to generate lots of revenue. Another intriguing concept that has become increasingly popular and generating revenue is sports betting and fantasy sports. These relatively newer concepts have added more reason for casual sports fans to watch a multitude of games that they never would have tuned in to previously. According to an article by Abigail Gentrup, “Sportsbooks, casinos, and lottery sponsorships brought in the second-highest dollar figure, with fees growing 140%” (Gentrup, 2022). This shows the fact that sports betting and gambling, which are addictive services, have largely contributed to sports league’s revenue. The reason is, they provide intrigue to people and allow them to have a stake in the games they bet on. Not only is there now drama in the result of the match, but added pressure in the sense that the result of a game will win or lose someone money! This has also contributed to an increased amount of viewership, and generated more revenue for major sports leagues. The world of sports is taking over and has an even brighter future.
DeleteWorks Cited
Gentrup, Abigail. “Technology, Gambling Boost NFL's Sponsorship Revenue.” Front Office Sports, 26 Jan. 2022, https://frontofficesports.com/technology-gambling-boost-nfls-sponsorship-revenue/.
Pompliano, Joseph. “How Do Professional Sports Leagues & Teams Make Money?” Huddle Up, Huddle Up, 11 May 2021, https://huddleup.substack.com/p/how-do-professional-sports-leagues.
Serazio, Michael. The Power of Sports: Media and Spectacle in American Culture. New York University Press, 2019.
Blake Guerriero
ReplyDeleteThere is no doubt that the sports industry generates so much revenue across its sports organizations. In Mike Ozanian’s article “World Most Valuable Sports Teams 2021” Sports Organizations such as the Dallas Cowboys, who are currently the most valuable organization in all of sports have a valuation of $5-7 billion, followed by the New York Yankees at $5.25 billion (Ozanian). There are many reasons why sports industries produce so much revenue, but for now I will stay on the topic of the Dallas Cowboys. Dallas Cowboys owner Jerry Jones purchased the franchise back in 1989 for $150 million, he has since added a modern stadium with luxury boxes, a new facility where the team practices called “The Star”, a merchandising business and licensing agreement with the NFL, an equity stake in the stadium management company “Legends”, as well as investments into e-sports and youth sports (Ozanian). Through all of this, the franchise delivered operating profits of $425 million on revenue of $980 million, which was a record (Ozanian). The top valuable franchises and their wealthy owners do various things such as Jerry Jones that generate revenue for their organizations.
Sports betting is another huge way sports organizations generate revenue, as in John Ourand’s article “Streaming, betting companies bolster NFL ad Market” it is stated that the six biggest gaming brands spent more than $160 million advertising during NFL games since the season began. Caesars Entertainment’s $59.1 million investment was the biggest in the category. Nearly half the overall ad revenue from these brands went to CBS, while Fox and NBC each netted about 21%. The $35 million that FanDuel earmarked for CBS’s NFL telecasts made it the network’s sixth-biggest overall spender since the season began (Ourand). Nearly everyone that I personally know is it into sports betting, to the point where it is like a religion to them, this shows that sports betting among many other things are a monumental reason as to why sports organizations generate so much revenue, and there is good reason as to why it is started to become legal in certain states across the nation.
Blake Guerriero
DeleteJerseys, Merchandise, Ticket Sales, and Concessions are another way sports organizations generate revenue. The fans hold so much power in the amount of revenue that these sports organizations receive, every season fans that are obsessed with their favorite team and buy so many kinds of merchandise and go to countless number of games which connects to buying concession products are all factors in providing these organizations their revenue. In Joe Pompliano’s article “How do Professional Sports Teams Make Money?” it is stated that while in-person, fan-centric revenue items like ticket sales, concessions, and merchandise are typically overshadowed by massive broadcasting agreements, the COVID-19 pandemic was a brutal reminder of just how important they are to the overall sports ecosystem (Pompliano). The estimated COVID-19 revenue losses for each league due to no attendance were noticeable. The NFL lost 44 billion, NBA lost $1.5 billion, the MLB lost $3 billion, and Premier League Football lost $2.5 billion (Pompliano). The worst part of all this is that this was only the revenue loss for 2020, 10%-40% of overall revenue comes from in person related items (depending on the league).
Works Cited
How do professional sports teams make money? Roundhill Investments. (n.d.). Retrieved January 31, 2022, from https://www.roundhillinvestments.com/research/prosports/how-do-professional-sports-teams-make-money
Streaming, betting companies bolster NFL ad market. Sports Business Journal. (n.d.). Retrieved January 31, 2022, from https://sportsbusinessjournal.com/Journal/Issues/2022/01/24/In-Depth/NFL-ad-spend.aspx
Steinberg, B. (2021, June 16). NBC seeks record $6 million for Super Bowl commercials (exclusive). Variety. Retrieved January 31, 2022, from https://variety.com/2021/tv/news/super-bowl-commercials-price-record-1234998593/
Emily Sweeney
DeleteThe sports industry is one of the biggest money-making organizations in the world. Three reasons that the sports industry is so successful in generating revenue is through the speciation of the sports, the streaming of sports, and the advertisements in sports.
“The total worth of the sports industry is estimated to be around US $500 billion. Just under half of this turnover is generated by the spectator sports sector”(Torrens Blog). The generation of this revenue creates a base for the sports industry to become one of the biggest money-making markets. An example of the money generated by the spectator sports sector is in person game sales. Even on top of paying anywhere between $60 for a seat in the nosebleeds or thousands of dollars for box seats at Metlife Stadium, sports spectators are also spending money on parking, food and drinks, and oftentimes merchandise as well. Even with COVID-19 causing many in-person events to struggle with revenue, the sports industry has not been hit too hard in that way. This proves that the speciation of sports plays a huge role in why the industry generates such a large revenue.
As technology continues to advance and streaming becomes popular in the world of sports, it also becomes a large revenue pool for the industry as a whole. Recently, there has been an example of this in the NFL. “The National Football League has reached broad new agreements with its television partners, including The Walt Disney Co., NBCUniversal, Fox Corp., ViacomCBS and Amazon” (Weprin). This new deal is somewhat common due to the increased likeability of streaming in today's society. “There are a few big changes to the new rights agreement: ABC will be added to the Super Bowl rotation, and Thursday Night Football rights will be exclusive to Amazon” (Weprin). The presentation of exclusive rights to Amazon for Thursday night games and the addition of ABC to the Super Bowl rotation, along with the other aspects of this deal, will result in a large revenue boost for the NFL. “The new agreement is significantly more lucrative for the league, bringing in more than $100 billion for the league over its 11-year term” (Weprin). As media and streaming continues to grow and advance, this could become an even bigger revenue source than it already is. Along with that, because of the popularity of football in particular, the ability to generate revenue through streaming services increases due to competition for exclusivity. So, because “NFL games are consistently the most popular and most watched programming on television, making the renewals a top priority for the media and entertainment giants, which are looking to the league to keep the traditional TV ecosystem alive, while at the same time allowing them to expand into streaming video” (Weprin).
Emily Sweeney Continued:
DeleteLastly, capitalizing on advertisements is another reason why sports organizations generate so much revenue. With sports being so popular, advertisers often spend millions of dollars to play their commercials during games. Now, with streaming being present, sports organizations have created new ways to keep the advertisers interested in playing their commercials during games. For example, “Fox rolled out six-second, split screen (comparatively unskippable) commercials during pitching mound visits and offensive huddle opportunities that were priced at half a million bucks a pop” (Serazio). That’s only for six seconds! Sports have continuously found ways like that to adapt and engulf their advertisers in order to keep them happy and spending money. This is why the revenue generated through advertisements is so high as well as the revenue for the sports industry as a whole.
Works Cited
Serazio, Michael. The Power of Sports: Media and Spectacle in American Culture. New York University Press, 2019.
Weprin, Alex. “NFL Inks Rich New TV Deals with Disney, Fox, NBCUniversal, Viacomcbs and Amazon.” The Hollywood Reporter, The Hollywood Reporter, 19 Mar. 2021, https://www.hollywoodreporter.com/tv/tv-news/nfl-new-tv-deals-abc-fox-nbc-cbs-amazon-4139552/.
“Why the Sports Industry Is Booming in 2020 (and Which Key Players Are Driving Growth).” Torrens Blog, https://www.torrens.edu.au/blog/why-sports-industry-is-booming-in-2020-which-key-players-driving-growth#.YfhSvC2z1QI.
Danielle Price
ReplyDeleteProfessor Burns
MSS420
30 January 2022
Weekly Blog: Question 1
The sports industry is by far one of the most lucrative industries in the world. There are various ways revenue is generated in the sports industry. For instance, advertising, merchandising, and cable revenues are just a few ways. Advertising is the biggest factor. The Super Bowl advertisements alone generate a large sum of money. The commercials during this game are extremely popular, and for some people they are the most attractive reason to watch the game in the first place. Advertisers can pay up to “$6 million for a 30-second spot in the event” (Steinberg). These numbers are staggering. The amount that people are willing to pay to advertise their products and services is very high especially during this game due to how many viewers they have. Further, in a CBS broadcast, the Super Bowl LV in 2021 was said to have “generated $545 million in in-game advertising” (Steinberg). It is clear that advertising is a significant money maker for the sports industry, and the Super Bowl is just one prime example.
Another way revenue is generated in sports is through merchandising. Typically, if one loves a sport, or a sports team they will have some sort of merchandise representing them. Someone could own a shirt, jersey, shorts, a water bottle, or even a bobblehead which all adds up. For example, an item that became extremely popular was a 2019 adjustable hat for the Raptor’s. Many Canadians were buying this product for 42 dollars. If 2,500 were sold that amounts to 105,000 dollars. The money coming in as a result of selling any of these products is sport revenue (Spma). Over time, the sum of profit from sold merchandise is massive. My brother as a reference owns about 25 jerseys for various professional teams. This is just one person; one sports fanatic and he has paid for about 25 jerseys. Nonetheless, this is referring to just jerseys that he owns. Merchandise might be considered a much smaller factor toward sports revenue, but even this adds up.
Lastly, cable revenues such as the Entertainment and Sports Programming Network (ESPN) factor greatly into generated revenue. Networks such as this buys the rights to the games, which leads to revenue. ESPN is said to be a “worldwide leader in cable revenues, pulling in nearly $8 per household in monthly subscriber fees…” (Serazio 7). ESPN is a prime example of this because they gain the rights to have games broadcasted by buying them from organizations such as major league baseball (MLB) which in turn pays the teams. Aside from ESPN, “regional sports networks are also some of the most expensive channels for distributors to maintain…” (Serazio 7). This includes networks such as ABC, CBS, FOX, and NBC which “accounts for more than one-third of all ad sales” (Serazio 7). Therefore, sports programming, and cable revenues also play a role in generating revenue within this industry.
Works Cited
Serazio, Michael. The Power of Sports: Media and Spectacle in American Culture. New York University Press, 2019.
Spma. “Examples of Revenue and Expenses in Various Types of Sport Organizations.” SPort MAnagement (SPMA) Hub, 18 Mar. 2020, https://sportmanagementhub.com/examples-of-revenue-and-expenses-in-sport/.
Steinberg, Brian. “NBC Seeks Record $6 Million for Super Bowl Commercials (Exclusive).” Variety, Variety, 16 June 2021, https://variety.com/2021/tv/news/super-bowl-commercials-price-record-1234998593/.
As we know, sports is one of the biggest money-making industries in the world exceedingly surpassing things like film and other entertainment areas. According to Michael Serazio in the book titled The Power of Sports: Media and Spectacle in American Culture, Serazio states that “depending on which estimate one consults, the global sports industry is pegged somewhere between $200 and $700 billion. Given that this was, by one count, 60 percent more than the value of the film market” (Serazio). When we take a deeper look into what exactly is helping to generate these large amounts of money to the sports industry, Serazio continues by stating that “nearly a quarter of all Americans spend money at least once a month on sports, contributing to nearly $70 billion worth of tickets, broadcast rights, sponsorships, and apparel” (Serazio).
ReplyDeleteIf you are a sports fan, you can take a look in your closet right now knowing that you own at least one or more articles of clothing or objects that supports your favorite team. Once you start to collect these items it becomes impossible to stop. For example, I own at least 5 jerseys for my favorite hockey team and a bunch of other items to decorate my room and show support for my team. It could be something as simple as a hat, sports teams know that they can make a lot of their money on apparel because they know people love to show support for their favorite teams, especially at games. According to an article from Front Office Sports by Pat Evans “global licensed sports merchandise sales were $26.47 billion in 2018, with the potential to jump to nearly $34 billion by 2023” (Evans). Although jersey’s are one of the most popular merchandise you can have “consumers are now focused on buying pieces they can wear to a casual Friday at work, at the bar, or the golf coure.Teams are increasingly partnering with more lifestyle- focused apparel brands like the Vegas golden Knights and its recent partner with Lululemon to create Golden Knights- branded athleisure products. Leagues like the NBA and NHL have allowed teams to build out local licensed apparel to sell in the venue, leading to significant revenue growth. The broader the assortment becomes, the broader the target demographic gets, and you can expand beyond the core consumer, and you’re not bumping up in the closets full of jerseys” (Evans). As we can see, merchandise revenue is continuously growing and adding to sports revenue due to new opportunities in merchandise and its partnerships.
To continue, broadcast rights are another big money-making tactic for the sports industry. NFL games are among the most popular and most watched on television which is why it was fitting to add new TV agreements with multibillion- dollar companies including giving Super bowl rights to top companies like ABC and Thursday Night Football rights to Amazon. The article NFL Inks Rich New TV Deals With Disney, Fox, NBCUniversal, ViacomCBS and Amazon enunciates that “ the NFL last inked deals for the Sunday and Monday games with Disney, NBC, Fox and CBS in 2011, in deals valued at about $27 billion. The new agreement is significantly more lucrative for the league, bringing in more than $100 billion for the league over its 11-year term” (Weprin). These new deals are providing sports fans with a wider span of platforms to access games on adding increasing stability of sports leagues around the world. “The deal with Amazon is significant as it will be the first time a tech company has secured the primary TV rights to a slate of NFL games” (Weprin). How awesome is it that you can now watch live NFL games on amazon?
ReplyDeleteSerazio, Michael. The Power of Sports: Media and Spectacle in American Culture. New York University Press, 2019.
“Sports Merchandise Opportunities Growing beyond Jerseys, Logo Tees.” Front Office Sports, 5 Aug. 2020, https://frontofficesports.com/sports-merchandise-growth/.
Weprin, Alex. “NFL Inks Rich New TV Deals with Disney, Fox, NBCUniversal, Viacomcbs and Amazon.” The Hollywood Reporter, The Hollywood Reporter, 19 Mar. 2021, https://www.hollywoodreporter.com/tv/tv-news/nfl-new-tv-deals-abc-fox-nbc-cbs-amazon-4139552/.
Jason Vent
ReplyDeleteSports are a multibillion-dollar business and generate extreme amounts of revenue each year through a variety of streams. One of the largest ways that sports leagues bring in revenue is through media rights for companies desiring to display them for their audience. Most leagues have exclusive contracts with a variety of media corporations that allow them to show the leagues games for their viewers in exchange for a hefty amount of capital being paid to the league. CBS and FOX have had a majority hold over the viewing rights for the NFL for several years since the leagues last media contract was signed in 2011. In the new deal just signed, CBS and FOX will keep hold of Sunday afternoon football games, NBC will hang onto Sunday night football and ESPN will continue to have the rights to Monday Night Football. The changing aspects included in the deal allow ABC to be added to the Super Bowl viewership rights rotation for two years and Amazon will have exclusive rights to Thursday Night Football, previously owned by FOX. The deal will run through the 2033 season and will provide the NFL with over $100 billion, a dramatic increase from the prior deal signed in 2011 that only earned the league $27 billion over its waning 11-year run. TV rights are one of the main revenue streams for sports organizations as shown by the massive amounts of cash that the NFL will bring in with the signing of this new deal that will come into effect next season. Sponsorship revenue from external companies is also a major source of revenue for leagues like the NFL. The leagues sponsorship revenue grew 12% over this season to $1.8 billion despite the leagues franchises only bringing in an additional 4% of revenue for rights fees. Sponsorship in total for the league has risen 23% as more companies like Microsoft, DraftKings, FanDuel and Anheuser-Busch have all signed contracts with the league worth hundreds of millions and in some cases billions of dollars to have their products and services be advertised with connection to the league to its hundreds of millions of fans all season. A third revenue stream for the league and sports leagues all over the world is ticket and merchandise sales which bring in a constant revenue all season and all year long. The NFL is partnered with Fanatics and Nike in an exclusive agreement that allows for all Nike branded, NFL official apparel to be sold through Fanatics on the league’s website. This deal may be worth much less than the revenue generated by media agreements but it along with the ticket sales and concessions generated by each team individually is what allows them to keep up with their average almost half a billion-dollar yearly expenses. Teams earn an average of $7 million for each home game played in ticket and concessions sales which no slight source of capital coming by way of each stadiums 70,000 or so seats and average ticket prices of $151, along with all of the high priced concessions sold at all sporting events in the U.S.
Works Cited:
“Technology, Gambling Boost NFL’s Sponsorship Revenue.” Front Office Sports, 26 Jan. 2022, frontofficesports.com/technology-gambling-boost-nfls-sponsorship-revenue/. Accessed 31 Jan. 2022.
Eckstein, J. (2022, January 30). How the NFL makes money: TV is king, streaming and gambling on Horizon. Investopedia. Retrieved January 31, 2022, from https://www.investopedia.com/articles/personal-finance/062515/how-nfl-makes-money.asp
Weprin, A., 2022. NFL Inks Rich New TV Deals – The Hollywood Reporter. [online] Hollywoodreporter.com. Available at: [Accessed 31 January 2022].
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ReplyDeleteAlex Donald
ReplyDeleteThe sports industry has been one of the most dominant money making industries since at least the end of the 19th century and there had been a lot of ways that each organization in the industry had been successful to make a profit. For example, I’ll be explaining about how the NBA makes a successful revenue. The NBA revenue is broken down into 4 factors: brand, market, arena, and sport revenues. Arena revenue basically covers profits from the arena where the team plays. It involves ticket prices, merchandise, suite prices, premium seating, concessions, and so on. Also teams that own their arena can also make a profit through non sports related entertainment like concerts for example, if the Staples Center hosts a concert the Los Angeles Lakers and Clippers can get a cut as well. Market revenue is basically the size of the number of people attending a team's home game. Market size really depends on the team's performance throughout the season. For example, the Golden State Warriors might have a higher income in market size than the Oklahoma City Thunder’s income. Also a team with a large market revenue can attract free agents. Brand revenue is basically market size that comes from sales from people who buy a team jersey that doesn’t live in the city they play for. For example, a kid that lives in Miami buys a Lakers jersey creates brand revenue or income for the Lakers. Brand revenue can also increase a player's income through their clothing branding. Players like LeBron James, Steph Curry, Micheal Jordan, Allen Iverson, Dwayne Wade, and so on have their own branding and signed with sports companies such as Adidas, Nike, Champion, Under Armour, and so on. Sports revenue is basically to make equality between large and small market teams in the league which implements trades between teams. However, that is basically how NBA teams and players get their money. NBA owners however, get their money in a more different way. “A simple answer would be that NBA teams and owners make money from a combination of ticket sales, suite sales, naming rights, and local TV and radio deals. Additionally, they also have league wide media, merchandising, and sponsorship revenues”. However, sometimes NBA teams can lose money for a lot of things like having a worst season, choking their leads in the playoffs or finals, and even losing their star player. For example, after the 2018 NBA Finals when the Cleveland Cavaliers got sweaped by the Golden State Warriors, the Cavs lost about 4% in their $1.28 billion value on their operating basis after they traded LeBron James to the Los Angeles Lakers. This process also works for other sports leagues as well.
Viju, Joe. “How do NBA Teams Make Money: A Complete NBA Revenue Breakdown”. The Sports Rush. 10 Dec, 2021 https://thesportsrush.com/nba-news-nba-news-how-do-nba-teams-make-money-a-complete-nba-revenue-breakdown/