Dear Bernard,

Are you a sports fan?

If you enjoy the major sports in America, this must be your favorite time of the year. Baseball playoffs are in full swing, football season is already close to a half-dozen games in, basketball and hockey are now just getting underway.

While many of us see sports as entertainment, we cannot forget it is a business as well. In 2023 the National Football League (NFL) generated over $18.7 billion in total revenue. The National Basketball League (NBA) generated over $10.9 billion, Major League Baseball at $10.9 billion and the National Hockey League at almost $6.8 billion (source: Sportico.com). If you are a soccer fan, Major League Soccer has over $2 billion in revenue.

How do professional team get all that money to pay multi-million dollar contracts and build new stadiums?

In the NFL, the average franchise is worth about $5.14 billion. Most of the revenue they generate is TV driven and revenue sharing. Each team will receive roughly $400 million from the NFL in 2023 from league media and sponsorship deals. The most recent set of renewals from ESPN, NBC, CBS, Fox, Amazon and YouTube are worth $125 billion. With the exception of the NHL, TV revenue and revenue sharing are the largest contributor to income.

By contrast, the main source of revenue for the NHL is gate receipts or ticket sales. While all four leagues generate similar amounts from tickets and suites, with the range between $2.9 billion and $3.3 billion for the four leagues, that total represents a much bigger share of revenue for the NHL. This is due to a smaller revenue generated from television compared to the other leagues.

Below is a chart which breaks down the major sources of revenue by type.

U.S. Sports Leagues Revenue Comparison

NFL/NBA/MLB/NHL/MLS

National Revenue

NFL $12.4B

NBA $4.5B

MLB $2.8B

NHL $1.3B

MLS $275M

Seating/Suites

NFL $13.1B

NBA $2.9B

MLB $3.3B

NHL $3B

MLS $805M

Team Sponsorships

NFL $1.8B

NBA $1.3B

MLB $930M

NHL $630M

Local Media

NFL $330M

NBA $1.4B

MLB $2.5B

NHL $795M

MLS $0

Concessions/Parking/Other

NFL $1.1B

NBA $875M

MLB $840M

MLS $360M

Total revenue is before revenue sharing.

Chart: Lev Akabas  Source: Spotico research

If you would like to read more or look deeper into the numbers I have posted the full article below:

How Do Teams Make Money

Looking at these numbers I don't think I will shed a tear the next time a team owner complains about having to pay for their own stadium.

As always, thanks for reading.

Bernie & Chad