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HUMAN KINETICS

First Snap Snapshot - The NFL's Big Business Picture


By Rick Horrow and Karla Swatek

September 6, 2013

After Thursday night’s kickoff party stretching from Sports Authority Field at Mile High Stadium in Denver to Baltimore’s Inner Harbor, it’s now officially football season, which means it is back to business for the National Football League, America’s number one sports league in terms of revenue, TV ratings, per game attendance, and media attention.

Despite preseason controversies including its concussion lawsuit settlement, continued delays in the player HGH testing program, and the arrest of former Patriots receiver Aaron Hernandez on murder charges, the NFL is back with all its usual bells and whistles.

Thursday night’s kickoff game on NBC saw the Super Bowl champion Baltimore Ravens bested by the NFL’s reigning tour de force quarterback Peyton Manning, who threw a record-tying seven touchdown passes to lead his Denver Broncos to a 49-27 victory over the Ravens.

While the NFL reported only modest revenue growth in 2012, its position at the top of the sports business food chain is hard to challenge. NFL games on Fox and CBS average more viewers than virtually every prime time show. Of the four most-watched regularly scheduled programs on TV in 2012-2013, three were NFL games.

The league, moreover, counts 185 million Americans as fans, based on ESPN polls of those who self-identify as interested in the sport. That’s nearly 60% of the U.S. population.

Critical stats, all, in meeting Commissioner Roger Goodell’s lofty goal of the NFL earning $25 billion in annual revenues by 2027.

“The business is healthy, but that’s not something we take for granted," NFL Executive Vice President and General Counsel Jeff Pash told Rick Horrow on Bloomberg TV “Sportfolio.” “We look at that with a mix of gratitude for the people who have put us in that position—our players, our coaches, and most of all our fans—and humility, because we know that it’s not preordained and we have to work hard every day to earn [fans’] trust and their support."

An ongoing challenge the NFL faces in 2013 and beyond is the seeming contradiction between providing a better “couch experience” for fans and a better stadium experience that keeps them coming back live—a key reason why attendance at NFL games has experienced a slight decline over the last five years.

"The couch experience has gotten better and better," acknowledged Pash. "We’ve devoted a tremendous amount of energy to focusing on the in stadium experience, from the moment the fan arrives. We’re trying to make it easier to get in, reduce the levels of inconvenience, and add special features for people who are in the stadium—things you can only see if you are there—in order to make the stadium experience more special to encourage people to keep coming back."

Technology plays just as big a role inside the NFL’s stadiums as it does in fans’ living rooms. "Even while you’re seeing big screens in stadiums," Pash continued, "people are still focusing on those small screens. One of our key initiatives is really making sure that the Wi-Fi capability in our stadiums supports all the activity: the pictures, the tweeting, communications with friends at home, looking at other games and seeing what the scores are. All that’s part of the experience as well.“We need to have a continuing ability to invest in new stadiums, and that’s one of the great things about our new collective bargaining agreement—it supports that ongoing investment. You’re seeing that in capital improvement plans all over the league."

That’s certainly the case in the Bay Area, where the San Francisco 49ers are readying Levis Stadium for its debut one year from now, and in Dallas, where the Cowboys this offseason sold stadium-naming rights to AT&T for an estimated $17-19 million per year. Dallas-based AT&T will continue to invest heavily in wireless technology improvements at the stadium. (Designed by renowned sports architecture firm HKS, the $1.3 billion AT&T Stadium opened in 2009.)

Another new notion this year is the NFL’s partnership with venture-capital firm Providence Equity. Through that partnership, the league will invest $300 million in private media and technology companies targeting growth equity investments of $25-$50 million. Each NFL franchise has put $1 million into the $32 million investment fund. The league and Providence will jointly manage these investments.

"We’re not going to invest in things that are unrelated to football," Pash emphasized. "We will be investing in technology and media. We’re going to be looking for the types of startup companies that may have an idea to improve the stadium experience and add to the value of the game. We intend for these investments to be very carefully thought through, focused on our core business, and supportive of the larger activities that the ownership is involved in."

The NFL wanted to settle its class-action lawsuit with former players before the start of the season to avoid the concussion issue dominating headlines. Now that the two sides reached a $765 million deal, the league can turn its full attention to making football safer. As part of NFL kickoff events over the last week, sports safety has been a prominent topic.

In Baltimore, more than 800 students took part in NFL PLAY 60 youth football clinics. There, they received instructions on proper Heads Up tackling, and heard from medical experts about the importance of hydration, proper helmet fit, and concussion awareness. In Arizona, the Cardinals announced the launch of a concussion education video game geared at young athletes. Both of these efforts come despite the NFL not admitting guilt in the concussion settlement.

Next week, we’ll take a look at fantasy football, how brands are activating around the NFL this season, and players’ creative new marketing and endorsement deals.




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Beyond the Scoreboard
Rick Horrow, America’s leading expert in sport business, and coauthor Karla Swatek give fans an inside look at the multibillion-dollar world of professional sport.
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Beyond the Scoreboard eBook
Rick Horrow, America’s leading expert in sport business, and coauthor Karla Swatek give fans an inside look at the multibillion-dollar world of professional sport.
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