NFL Revenue Collection and Distribution Imagine being in control of the most widely known sports company in all the United States. The company makes billions of dollars in television deals alone, not to mention an additional few billion in ticket and merchandise sales. You oversee billionaire team owners and hundreds of millionaire employees. Your job is to coordinate all the deals and bring more and more success to the already growing league. The NFL’s player associating is always tugging at your shirt, nagging about how you’re punishing players too harshly and taking too much money for yourself. The media has turned its back on you and every time you step in front of fans, especially Patriot’s fans, you get booed. This is what
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Back in 2015, the NFL extended their contract with the largest athletic brand in the world. They extended the deal for 3 years and it was worth 1.1 billion dollars. All the NFL’s jerseys and apparel will continue to possess the iconic swoosh for another 3 years (Lefton 2015). In 2014, the NFL and Microsoft signed an agreement worth $400 million over 5 years under the condition that players and coaches would utilize their Microsoft Surface tablets on the sideline. The campaign started out rough when announcers began calling them iPads, but now it seems like the deal has worked well in both businesses favor (Gaines 2014). In 2011, the NFL extended their deal with Pepsi for another 11 years. The deal was worth 2.3 billion dollars and is the reason you see all the Gatorade coolers on both sides of the field (Altman 2015). As far as individual team sponsorships go, the Dallas Cowboys pull in the most money in this category. In 2012 alone, Jerry Jones’ Cowboys raked in $100 million in sponsorship deals (Badenhausen 2013). Suites are in every NFL stadium and are used to pull in money that does not have to be shared with the other teams. This gives owners incentive to build or renovate stadiums so that they can earn more money for themselves. According to the Association of Luxury Suite Directors, the average low-end suite sales for $64,597 and …show more content…
The NFL equally distributes the money they make through the salary cap. The salary cap is a certain percentage of the NFL’s total revenue that each team receives to pay its players. This number increases each year to create competitive contracts and give more money to the players (Lawrence). In 2017, the salary cap was $204 million (Kaplan 2017). The salary cap is used to pay for a team’s 53-man roster plus an additional 8-man practice squad. Each team is required to spend at least 80 percent of the salary cap and no team can spend more than the set cap value. The TV deals that were discussed at the beginning are split evenly among the 32 teams. Two-thirds of the entire revenue of these deals are incorporated into the salary cap and the rest is given to the team owners (Lawrence). As far as ticket sales go, the home team takes in 60 percent of the gate and the remaining 40 percent is added to all the other games and distributed evenly among the league (Harperslaw 2009). However, teams can keep all money earned on luxury suites, box seats, and concessions. This forces teams to continue to renovate and build new stadiums
Back in 2015, the NFL extended their contract with the largest athletic brand in the world. They extended the deal for 3 years and it was worth 1.1 billion dollars. All the NFL’s jerseys and apparel will continue to possess the iconic swoosh for another 3 years (Lefton 2015). In 2014, the NFL and Microsoft signed an agreement worth $400 million over 5 years under the condition that players and coaches would utilize their Microsoft Surface tablets on the sideline. The campaign started out rough when announcers began calling them iPads, but now it seems like the deal has worked well in both businesses favor (Gaines 2014). In 2011, the NFL extended their deal with Pepsi for another 11 years. The deal was worth 2.3 billion dollars and is the reason you see all the Gatorade coolers on both sides of the field (Altman 2015). As far as individual team sponsorships go, the Dallas Cowboys pull in the most money in this category. In 2012 alone, Jerry Jones’ Cowboys raked in $100 million in sponsorship deals (Badenhausen 2013). Suites are in every NFL stadium and are used to pull in money that does not have to be shared with the other teams. This gives owners incentive to build or renovate stadiums so that they can earn more money for themselves. According to the Association of Luxury Suite Directors, the average low-end suite sales for $64,597 and …show more content…
The NFL equally distributes the money they make through the salary cap. The salary cap is a certain percentage of the NFL’s total revenue that each team receives to pay its players. This number increases each year to create competitive contracts and give more money to the players (Lawrence). In 2017, the salary cap was $204 million (Kaplan 2017). The salary cap is used to pay for a team’s 53-man roster plus an additional 8-man practice squad. Each team is required to spend at least 80 percent of the salary cap and no team can spend more than the set cap value. The TV deals that were discussed at the beginning are split evenly among the 32 teams. Two-thirds of the entire revenue of these deals are incorporated into the salary cap and the rest is given to the team owners (Lawrence). As far as ticket sales go, the home team takes in 60 percent of the gate and the remaining 40 percent is added to all the other games and distributed evenly among the league (Harperslaw 2009). However, teams can keep all money earned on luxury suites, box seats, and concessions. This forces teams to continue to renovate and build new stadiums