Well folks, there is only one game left in the world of my favorite professional sport - the NFL. I was genuinely surprised to see Tampa Bay make it to the big dance and was a little sad for Aaron Rogers, who I believe actually is the best QB in the NFL this year, but just got some bum plays here and there and well, that is all it takes in a game where one turnover can cost you the entire game.
I will certainly be watching the Super Bowl, and I think a lot of other Americans and people overseas (turns out the sport is more popular in Europe than you might think) will be tuning in as well. It is the day of the most expensive advertising in the world that exists a world that usually wont watch traditional advertising anymore and has the tools necessary to avoid it.
Which brings me to the title of this article: How do NFL teams make money when they don't have any fans at games?
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Why bother even using the jumbotron?
There are a lot of ways that NFL teams make money and the price of admission actually isn't, for most teams, a major aspect of the deal. Not everyone sells out games and this was particularly true for the Raiders and subsequently why they ended up moving to Vegas. Prior to moving to Vegas their total take as far as what can be (and is) called "local revenue" was a mere $77 million and while that sounds like a ton of money I just want you to remember that Patrick Mahomes makes $45 million a year on his own salary alone.
This $77 million was all ticket sales, merchandising, and every beer and hot dog sold in the stadium throughout the entire season. It simply isn't enough. When you consider that these stadiums are massive, and require a huge amount of maintenance and staff to operate, the player's salaries is just the tip of the iceberg as far as an NFL team needing a ton of money in order to be profitable.
I also want people to understand that revenue does not mean profit but rather, the amount of money that you have generated through sales before ANY costs have been considered. It is basically how much money is in the register at the end of the day if you owned say, a restaurant. That food wasn't free and neither was the staff who prepared and served it. $77 million isn't near enough and hence, the Raiders were for sale.
The Dallas Cowboys on the other hand, are one of the most profitable sports franchises in the world (not just in American football) and they generate over $600 million in local revenue every year. How they manage to do this even while being an average team at best is beyond me.
They are and have been the most profitable NFL team for a very long time.
So now that most stadiums are not allowing fans into games due to either local protocols or the decisions of the owners, local revenue has been almost completely wiped out. It's tough to sell hot dogs and beer to people in an empty stadiums and the tickets aren't worth a great deal when you know the gates will be locked when you arrive at the stadium.
So as it turns out, and this should surprise no one, that the NFL generates a tremendous amount of money in direct and indirect advertising. Indirect advertising comes in the form of the NFL selling the broadcasting rights to one particular network for a lump sum and then that network makes their own choices and strategic moves on how they are going to sell the advertising time during the broadcast.
This is one of the few avenues of profitable advertising remaining in broadcast TV because sports fans want to see every moment of a game and therefore will endure commercials to be able to see a game right as it happens.
Direct advertising happens for the NFL in the form of selling the rights to some company to become "the official something of the NFL." I have always found this to be stupid but for example Pizza Hut is the official pizza of the NFL. What that even means is beyond me and while there is no doubt in my mind that the boys on the field do enjoy some Pizza Hut from time to time, they are free to order whatever they want.
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Ok, I guess it is kind of catchy
There are other revenue streams for the NFL but they are rather miniscule in comparison. The total amount of all of this at the end of the past year (and this year will be about the same) is nearly $10 BILLION. This money is distributed evenly across each of the 32 teams, regardless of how they performed that year.
So at the end of the day teams like the Raiders probably aren't all that concerned that no one is allowed to come to the games, while Cowboys owner Jerry Jones lobbies to make it happen and that is why he was able to get 24,000 people into each of the games on average. The Super Bowl will have fans in it, but it won't be wall to wall, obviously.
The NFL teams don't actually need fans in attendance in order to make it though a year but people like money, especially people that are already very rich. I'm certain they will open the stadiums up as soon as they possibly can.