As the negotiations, leveraging, political maneuvering, and legal filings from this summer’s NFL labor dispute near an end, it proves one undeniable truth; the product that is the NFL holds unprecedented marketing value and facilitates a market growth that has never been seen in sports.
I spoke to someone recently who held the opinion that all the people involved in the lockout were just greedy and that he would never come back to football. He says he lost interest and that he would never buy any products that bore the NFL shield logo again. He thought that there were many others that felt the same way and in following that same line of thinking, they (NFL league officials, players, and owners) would see how much money they would lose from this. While politely listening to him, I couldn’t help but think to myself, “You are an absolute moron!”
If you think that your personal boycott of tickets, jerseys, and other assorted merchandise will somehow make a dent in the cash making juggernaut that is the NFL, you are seriously misguided!
Let me say this. These are some of the most savvy business minds, attorneys, and corporate executives in any industry, worldwide. If in 1922, when the NFL was formed, you told the few club managers, second chance coaches, and over-the-hill players elated to make a few bucks that this would turn in to a 9 billion dollar industry by which all other American sports are measured, they would have laughed you all the way to the local watering hole.
To put this in perspective, if the NFL was eligible it would sit at about 270 on the U.S. Fortune 500 companies list, earning higher revenues than Caesars Entertainment, Reynolds America, Stanley Black & Decker, Visa, MasterCard, Coca-Cola, and Harley-Davidson. Think about that for a minute.
The NFL is structured differently than your typical corporation because it is an organization of privately owned franchises (except the Green Bay Packers) collectively governed under the same banner. Now think about how many people it actually affects. In your big corporations you typically see what? 50,000? 100,000 employees? In the NFL, 9 billion dollars is essentially split up amongst approximately 1,900 players and maybe a 1,000 more NFL executives, team owners, and staff. That is just staggering to me. The licensing royalties, television contracts, and portions of team profits all contribute to the revenues that the NFL generates. Imagine any other corporation asking you, a taxpayer, to pay for the building in which the business operates, and then offer you absolutely no say in how it is designed or what amenities go in to it, lease it from you, then turn right around and charge you astronomical fees to enter it. You’d tell them to take a hike, right? Not in the case of the NFL, we’re happy with that deal because the entertainment factor, the thrill of cheering for our favorite teams, is worth the almost unimaginable costs.
It’s the most brilliant business model I can think of. These NFL executives and team ownership groups are in the business of making unbelievable amounts of money, and business is very, very good. All despite a four-month labor dispute.
In addition to all that, the NFL isn’t done growing. It’s just now hitting its’ stride. The NFL has tripled its’ revenues since the birth of free agency in the early 1990’s. The NFL has a revenue growth goal to 25 billion dollars by 2027. That is basically growth of 1 billion dollars annually, every year. What other business sees that magnitude of steady gains? The answer is very simple…none.
There are still people who haven’t come back to baseball after the player strike in 1994. The big difference, the 94’ MLB strike actually cost games and a World Series. That was the reason for the backlash against the sport. With all of the media spin and even the two sides speaking doom and gloom all summer long, in the end it still came down to the bottom line. When all parties were faced with losing even a small amount of a 9 billion dollar pie, the bargaining process had “last minute” breakthroughs in the steps toward resolution. Call me crazy, but I don’t think that’s coincidence.
Another testament to the power of the NFL draw is the 24 hour coverage of the lockout. I myself was wrapped up in the daily news. Eventually I had to ask myself, “Why do we even care?” At the end of it all, what did we actually miss? A month of free agency signings? Depth chart rumors? NFL Network team cams? Who really cares? Was it my salary and benefits they were arguing over? Of course not! We will have football and it will continue to thrive. The guy that told me he will never come back is the same guy that asks, “So, did they settle it?” Guess what, he’ll be there like everyone else, watching on opening weekend.
What are the details of the new collective bargaining agreement? A lower, 48% revenue take for the players, no billion dollar off-the-top credit to owners, a rookie-wage scale, a retired players’ legacy fund, etc, etc, blah, blah, blah….point is, does it really matter at all how and what their compensation is as long as we get to watch it every Sunday?
So, what the NFL lockout actually did was capture interest in the league all summer long, arguably more than free agency and training camp coverage would have and has set us up for the most exciting roster building period in the history of sports, all in time for us to not miss a single game to include the pre-season. The National Football League and our obsession with it, never ceases to amaze me. As I continue to prepare for my fantasy football draft and contemplate the season outlook for my Detroit Lions, one thing is certain. I won’t miss a minute and neither will anybody else.
record earnings this year, I bet.