The NFL, like other corporate brands, has not been immune to the worldwide recession. As reported by Forbes, team values fell two percent last season to $1.02 billion per club. This decline marks the first of its kind since Forbes started tracking professional sports franchises in 1998.
NFL teams’ overall values have diminished because of the economy, along with less non-broadcasting revenue for many of the 32 teams. Long-term television contracts, the league and its owners’ profit margins are stronger than ever. According to the same report, the revenue received from CBS, NBC, ESPN and FOX had increased by $1.5 million per club, to $95.8 million for each franchise. Cash flow grew once the league and Comcast resolved their issues and settled their longstanding dispute over the NFL Network.
The league signed a 10-year deal from other non-media contractual agreements worth $45.8 million – an increase of $9.3 million, which is a direct reflection of a partnership with Direct TV. Per Forbes, the aggregate league revenue raised 5.8 percent to $8 billion.
The present CBA will expire March 4 and the deadline is approaching quickly for a new deal, or else beware a lockout. The fans are hoping the billionaires and millionaires get it right, come to their senses and sign a deal. Before the current uncapped season, the CBA required the league and its owners to pay the players no more than 59.5 percent and no less than 56.5 percent of league revenue, minus deductions for capital expenditures and a portion of local revenue and operational costs.
With some confusion over the books of NFL owners, the NFLPA requested proof of lost revenue per club. The NFL offered and opened the books of the new Super Bowl champion Green Bay Packers. The NFL stated that the Packers are a prime example that the current formula doesn’t work and needs revamping. But, the Packers are owned by local shareholders and, therefore, the only NFL team that releases financial documents to the public. They showed an increase in operating costs, including a $22-million rise in player contracts, with a loss of profit of $10 million.
The total player costs for all NFL clubs rose 4 percent last year to $4.5 billion. Over half of the increase was due to rookie contracts, salaries and benefits, totaling $25.8 million per franchise. During 2009 the operating income before taxes, interest, amortization and depreciation was $33 million per club, $1 million more than in 2008.
The landscape of today’s ownership group has made a big change from the 70s, 80s and 90s. A lot of issues come from within the NFL’s group of 32 owners and could be the main reason they never have or will open the books to the NFLPA, let alone to one another. The makeup, structure and professional backgrounds of the new NFL owners are largely those of shrewd businessmen and entrepreneurs in large TV markets, individuals adept at handling fairly new stadiums with great revenue streams. The others are in mid-to-small markets that generate lower revenue, with smaller stadiums that require upgrades, but which are embroiled in dog fights with states, communities and fans to get them.
Last week on Media Day, I stood in Cowboys Stadium – the largest, most spectacular stadium I have ever seen. Jerry Jones’ new state-of-the-art facility has pushed the team’s value up 9 percent, making the Cowboys’ franchise worth $1.8 billion – the highest-priced professional sports franchise in the world. The Washington Redskins’ worth is $1.55 billion, and the New England Patriots’ worth is $1.37 billion.
You will hear me say this in every one of my lockout-related columns, because I truly believe it: There are eight billion reasons to play football. Just ask the fan base.