NFL Revenue Sharing
To many the NFL may be considered America’s greatest sports league. The league definitely has the numbers to back up this claim. The ever-growing sport has maintained keen interest from fans all across the world, all the while generating enormous amounts of revenue. Currently the league rakes in close to $9 billion annually. The success of the NFL is something to marvel at. Even in a shaky economy the NFL continues to flourish. What is interesting about the NFL is how the business aspect is structured. TV is the NFL’s biggest source of revenue. 80% of the NFL’s earnings come from TV revenue according to Forbes. The NFL operates in a unique manner regarding its TV generated revenue. The television rights to broadcast NFL games are the most lucrative and expensive rights of any American sport. NFL broadcasts have become among the most-watched programs on American television, and the financial futures of entire networks have depended on owning NFL broadcasting rights. This has raised questions about the dependency of the networks to the sport and whether they can criticize the NFL without the possibility of losing their broadcasting rights and their income. While TV advertising has generally grown slowly in recent years, advertising on NFL games has soared. The Wall Street Journal notes that ad rates for NFL games rose 27% to $347,800 for a 30-second spot last season. So far this fall, NFL games have averaged 17.8 million viewers at any given minute, more than almost all regularly scheduled programs, according to Nielsen data. Importantly, many of those viewers are young men, who are hard for advertisers to reach through other programs. And the fact that most consumers watch NFL games live is important at a time when many viewers record shows and then skip the commercials when they watch them later. Under the current contract, which began in 2006 and expires in 2013, the top television networks are paying a combined sum of $20.4...
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