The Chiefs made nearly $40M in gross operating income in '10 after a major renovationgetty images
Information obtained from the Chiefs' tax return forms covering a period from '08-10 shows that there is "little correlation between the team’s on-field performance and how much money it makes," according to Hendricks & Vockrodt of the K.C. STAR. In '10, the Hunt family, which owns the Chiefs, made nearly $40M in gross operating income. The club was "overseeing a major renovation at Arrowhead Stadium, a project that would provide the Chiefs with more robust earning potential locally." The '08 season was "miserable" on the field, as the Chiefs won only two games. Still, they sold $51.8M in tickets, collected $4.7M from parking and made $2.8M from fans buying concessions. By comparison, the Chiefs in '10 clinched a playoff berth for the first time in four years, but revenue from ticket sales was down 20% from '08. It "didn’t matter much to the bottom line, though, thanks to the share-one-share-all structure of the NFL." The Chiefs grossed $302M from all revenue streams in '10, compared to $231M in '08. Nearly a third of 2010's total "came from two league entities: NFL Ventures and NFL Enterprises," which oversee the league’s marketing arm and controlled media, respectively. Add in the Chiefs' share of the TV contract and that is "nearly two-thirds of the gross receipts before a single ticket, parking pass or cup of beer was sold." That was "more than enough to cover its biggest expense each and every year," which in '10 was the $148M paid in salaries. The equal distribution of TV revenue is a "testament to the NFL’s desire for financial parity among its franchises." In '09, Forbes "pegged the Chiefs’ revenue" at $235M, but the actual number was $273.9M. After expenses, Forbes "pegged the Chiefs’ operating income" at $47.8M, which was "more than twice what was reported to the IRS" (KANSASCITY.com, 2/6).
USEFUL INFORMATION: YAHOO SPORTS' Blake Schuster wrote it is "certainly easy to see how this information could become extremely valuable" to the NFLPA when the current CBA expires after the '20 season. As much as some "would like to say that football is dying, team finances appear to show otherwise." There are a "whole host of areas of concern for players that could be solved with more money from owners," and that is "not including greater health care for retired players" (SPORTS.YAHOO.com, 2/6).
