NFL revenue reaches $14B, fueled by media
The NFL will take in roughly $14 billion of revenue this season, over $900 million more than last year.
Increased media payments, a new “Thursday Night Football” package, and the opening of the new U.S. Bank Stadium in Minnesota all contributed to the increase.
“It continues unabated,” said Marc Ganis, a sports consultant close to the NFL. “When you get above a certain number, it is really hard to move the needle on revenue growth.”
The figures are based on calculations from the salary cap for the 2017 season, which the league and NFLPA released last week. The cap is $167 million a team. With player benefits pegged at $37 million, the total for each of the 32 clubs comes to $204 million, or $6.5 billion in labor costs for 2017.
The league shares most revenue with the players, who get between 46 percent and 48 percent of each year’s take. That would translate to revenue of between $13.6 billion and $14.2 billion.
Those revenue figures are incomplete, as the league does not share every penny with the players, shielding hundreds of millions of dollars in areas such as stadium finance. So the total revenue for the league is almost surely to top the $14 billion mark this year.
The league declined to provide its revenue numbers but did not object to deducing the figure from labor costs.
Total labor costs did not rise greatly from last season, but that is because the league paid out performance-based pay twice.
Performance-based pay, which is paid out to players who perform beyond their compensation, is rolled into benefits, not the cap. The league and union are calculating $4.205 million per club in 2017, as well as another $1.1 million for the rookie redistribution fund. That fund takes savings from the CBA’s rookie compensation system and redistributes to veterans and retirees.
“2016 included a double hit for performance-based pay, which we agreed with the union back in 2013 to defer,” a league source said. “If you were to adjust for that, benefits in 2017 went up about $1.4 [million] per club compared to 2016.”
The cap grows from contractually obligated revenue like sponsorship and TV deals, and then projections of local revenue based on the year before. It rose from $155 million in 2016 to the $167 million for the coming season.
A big driver is the new Thursday night TV package, which grew from $300 million to $450 million a year after CBS and NBC agreed to a new two-year deal last year. That comes to nearly $5 million extra per club. The other national TV contracts also have annual increases that add to the cap.
Local revenue, which in most cases includes ticket revenue, including premium seating, and local sponsorship sales, is not as big an element in upticks in the cap, but new stadiums like U.S. Bank Stadium — with their upgraded premium areas and new sponsor opportunities — do move the needle.
With the new Atlanta Falcons’ stadium opening this year, local revenue likely will get a big boost for the cap next year. Moving from the Georgia Dome to Mercedes-Benz Stadium could produce a bump in the cap of a few million dollars per club by itself. In 2019 the Los Angeles Rams and Chargers are scheduled to move into the new Inglewood, Calif., stadium, which also should provide a healthy boost in revenue.