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Professional sports provide entertainment for fans. Traveling to different stadiums, having friends over to watch the game, and keeping up with your favorite team’s playoff hopes keep us entertained throughout the season.
While professional sports give many fans something to do in their spare time, for the owners, coaches, athletes, and other team employees, professional sports are a business, and money is often what drives the decisions that are made.
It can be difficult as a fan to watch your favorite team trade away one of its best players or see your favorite player sign with another team. At the end of the day, fans must keep in mind that in business, money talks, and NFL teams have a lot of it.
Many NFL teams are profitable from year to year while some operate at a net loss. Each team typically brings in millions of dollars in revenue each year, but the costs of operating an NFL franchise are steep; therefore, some teams lose money in a given year.
Although some teams do not experience a profit each year, owning an NFL team is a lucrative experience in the long run as each team is worth billions of dollars. Buying a team is seen as an investment, so many owners are okay with operating at a net loss in some years.
How Much Are NFL Teams Worth?
If you have a few billion dollars to spare and are looking for a great return on your investment, purchasing an NFL team is a great venture.
Some NFL teams are worth more than others, but each team has been valued at at least $3 billion.
According to gobankingrates.com, $3 billion is the least one would have to pay to purchase an NFL team in 2022. The most recent NFL team that was sold is the Denver Broncos, purchased for $4.65billion in 2022, a record for North American sports franchises.
The team was purchased by the Walton-Penner group led by Walmart heir Rob Walton from the Pat Bowlen Trust (the trustees of the former Pat Bowlen). Bowlen originally purchased the team for $78 million in 1984 giving his trustees a profit margin of over $4 billion.
Before that, hedge fund manager David Tepper purchased the Carolina Panthers in 2018 for $2.3 billion. The amazing part about this purchase was that he paid all of it in cash. Even some of the richest people in the world could not afford to pay cash for a sports franchise.
Gobankingrates.com lists the Dallas Cowboys as the most valuable franchise in the NFL coming in at a value of $8 billion and lists the Cincinnati Bengals as the least valuable at $3 billion. The site says that the Bengals’ value jumped 32% last year after their Super Bowl run.
How Do NFL Teams Make Money?
People in business refer to things that are guaranteed to bring in a lot of money as a cash cow. Well, the NFL would be a great example of a cash cow because the money the league generates is jaw-dropping.
NFL teams make money off of television rights, merchandise sales, and ticket sales among other things.
Television rights and contracts is the league’s most lucrative aspect of its business. The league has National TV contracts with several broadcasting companies, and teams have television contracts with local stations.
Because the access to television among fans has never been higher, TV is an easy way for teams and the league as a whole to bring in money. It is the main reason the league stayed afloat during the 2020 COVID-19 pandemic.
Every time you buy your favorite player’s jersey, the team benefits from that sale. Anything you buy at the gift shop when you attend an NFL game is money in the owner’s pocket. They also make money off of the hat you buy at the mall.
Merchandise is a great way for any business to make money not only for the cash that comes in after the purchase, but for the free advertising that comes when people wear the merchandise out in public.
Some business owners would argue that the free advertising is more valuable than the revenue when it comes to merchandise sales. Owners of NFL teams may agree with this, but they rarely have to worry about making a profit off of merchandise.
Of course, teams make money off of every ticket that is sold for their home games, and because there are so few home games in an NFL season, ticket prices are often high and games are usually sold out even for some of the worst teams in the league.
The average fan often does not understand that ticket sales are only a small portion of a team’s revenue. When considering the cost it requires to operate an NFL stadium on gameday, it is easy to see that the millions of dollars generated does not go as far as one might think.
Sponsors are another way that teams bring in revenue. More recently, the league and many other teams have turned to sponsorships with sports gambling companies with laws changing in favor of sports betting in many states.
When looking at all of the ways NFL teams can make money, it is easy to see why many of them are so profitable. It may require a lot of money to operate an NFL franchise, but if the money is managed correctly, there can be a large profit margin.
Why Does the NFL Make So Much Money?
Some sports fans in America refer to the NFL as the king of professional sports. While some leagues fluctuate in popularity from year to year, the NFL almost always remains at the top.
The NFL makes a lot of money because of the tradition of football in America, the set up of the regular season schedule, television deals, and the brand names that come along with some of the league’s most popular teams.
Baseball may be considered America’s pastime, but football is the most watched sport in America for many reasons. Football has a rich tradition in the United States, and those traditions are often passed down from one generation to another.
The setup of the regular season schedule allows the NFL to put forth a quality product each week. Each team plays 17 regular season games over 18 weeks with seven teams making the playoffs in each division.
With only 17 games to earn a playoff spot, each regular season game matters more than in other professional sports. Only playing once a week also gives players more time to rest between games allowing them to play harder in the regular season.
One of the complaints about other professional sports is that players don’t play hard until the postseason. It may be a little off-base to say they don’t play hard at all, but the players do take more games and plays off in the regular season in other sports, and it is hard to blame them.
Major League Baseball teams play 162 games over six months. NBA teams play 82 regular season games over nine months. That is a lot of games, and it is difficult to ask professionals to push through pain when they play that often.
Television deals are another big reason for the NFL’s success. The league is very strategic about when they showcase their product on TV. Sunday afternoons, Sunday nights, Monday nights, and now Thursday nights are all dedicated to the NFL on various networks.
These are the days and nights where most people are at home and watching TV giving the league a larger viewing audience. Even during the postseason of other professional sports, more fans tune in to regular season NFL games.
While the league has certainly made some smart business moves to grow its product over the last several years, it would be nothing without some of the biggest team brands in professional sports.
Teams like the Dallas Cowboys, Philadelphia Eagles, Chicago Bears, Green Bay Packers, New England Patriots, and, more recently, the Los Angeles Rams bring in a lot of revenue for the NFL.
The league has been very strategic about when these teams play because of their fanbase. When the biggest brands play in the biggest moments, the league gets higher ratings. Even when some of these teams struggle, their loyal fan base brings in plenty of revenue for the NFL.
Who is the Richest Player in the NFL?
Tom Brady is the richest current player in the NFL with a net worth of around $250 million. Roger Staubach is the richest NFL player ever with a net worth of about $600 million. Both players’ business ventures outside of football have led to their wealth.
How Much Does it Cost Each Year to Operate an NFL Franchise?
It costs around $400 million per year to run an NFL franchise. Since the Green Bay Packers are publicly owned, they are the only franchise whose expenses are public knowledge. Other teams’ expenses may vary.
Which State has the Most NFL Teams?
The state with the most NFL teams is a three-way tie between New York, California, and Florida. Each of these states boasts three NFL franchises. New York is represented by the New York Jets, New York Giants, and the Buffalo Bills. California houses the San Francisco 49ers, Los Angeles Rams, and Los Angeles Chargers, though it’s noteworthy that they once had a fourth, the Oakland Raiders, before their relocation to Las Vegas. Florida rounds out the trio with the Jacksonville Jaguars, Tampa Bay Buccaneers, and Miami Dolphins.
Which NFL team has the smallest fan base?
According to a recent study by Keegan Sullivan from Samford University, the Jacksonville Jaguars have the fewest fans among all 32 NFL teams, with an estimated total of 2,422,750 fans.