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PROFESSIONAL SPORTS IS A $750
BILLION BUSINESS
THE NFL : THE QUEST TO KEEP PROFIT
FROM ERODING
THE NFL RANKS AS THE WORLD’S MOST VALUABLE SPORTS PROPERTY AT AN ESTIMATED $4.5 BILLION
THE HISTORY
• 1892 – WILLIAM HEFFELFINGER BECOMES THE FIRST
PROFESSIONAL FOOTBALL PLAYER
• THE ARIZONA CARDINALS ARE THE OLDEST CONTINUING
OPERATION IN FOOTBALL
• 1902 THE FIRST WORLD SERIES OF PRO FOOTBALL HELD
• 1922 GREEN BAY PACKERS HAD SUCH LOW ATTENDANCE THAT
LAMBEAU WENT BROKE
• 1936 – FIRST DRAFT
• 1939 – FIRST NFL GAME TELEVISED
• 1967 – FIRST SUPER BOWL (RETROACTIVE)
THE NFL DRAFT
• 1936
• WORST TO THE BEST
• HELD IN HOTEL BALLROOMS
• FIRST TELEVISED IN 1980
• 1995 – DRAFT BECOMES A MAJOR ENTERTAINMENT SPECTACLE
NFL DRAFT
• CASE STUDY - CADE MASSEY & RICHARD THALER
• OPPORTUNITY TO INVEST IN TEAMS FUTURE
• USE OF GAME STRATEGY TO CHOOSE PLAYERS WISELY
• PROFIT MAKING & VALUE
SOURCES OF REVENUE
•TICKET SALES
•MERCHANDISING
•VENUE
•LICENSING
•ADVERTISING
BROADCAST- SPORTS TELEVISION
•MOST LUCRATIVE SECTOR OF THE
SPORTS INDUSTRY
•BUILDS SUSTAINABLE COMPETITIVE
ADVANTAGE FOR NFL – INCREASING
ECONOMIC VALUE OF FRANCHISES
•NFL EARNS CLOSE TO $4 BILLION IN
RIGHTS FEES ANNUALLY
COLLECTIVE BARGAINING
•WHO ARE THE WINNERS?
•WHO ARE THE LOSERS?
THE SUPER BOWL
• MINNEAPOLIS SET TO HOST THE SUPER BOWL LII (52) IN 2018
• SUPER BOWL MARKS THE BEGINNING OF PROFESSIONAL
SPORTS YEAR
• DECISIONS MADE IN ALL SPORTS INCLUDING ADVERTISING AND
MARKETING BUDGETS, TICKET PRICES, HOSPITALITY, FACILITY
UPGRADES AND MERCHANDISE TRICKLE DOWN FROM SUPER
BOWL
• MAJOR CONTROLLABLE FACTOR FOR NFL, INCREASING
DEMAND THROUGHOUT THE FRANCHISE OFFERINGS
THE SUPER BOWL
•ECONOMIC IMPACT FOR HOST CITY - $300-400 MILLION
•DIRECT TIES TO CORPORATE AMERICA
•53 NATIONAL CORPS GAINED $257 MILLION AVG STOCK VALUE AND $13.6 BILLION
IN TOTAL ECONOMIC VALUE AFTER ANNOUNCING SPONSORSHIP DEALS
•HOST CITIES GO THROUGH AN ELABORATE BID PROCESS
THE SUPER BOWL
• LOCAL AND STATE GOVERNMENT INVOLVEMENT
• INCLUDES PROVISION OF FIRE, POLICE,
AMBULANCE AT NO COST TO NFL
• AT THIS TIME, ONLY CITIES WITH NEW STADIUMS WIN
BIDS
• COSTS ESTIMATED BETWEEN $30 AND 70 MILLION
• ESTIMATED 30 MILLION POUNDS OF SNACK FOODS
CONSUMED ON SUPER BOWL SUNDAY
STADIUMS
• PUBLIC & PRIVATE PARTNERSHIPS HAVE FUNNELED
MORE THAN $6 BILLION TO CITIES AND THEIR
SPORTS FACILITIES
• EXCELLENCE IN STADIUM DESIGN SPEARHEADED BY
SPECIALIZED ARCHITECTURAL FIRMS
• BRANDS A COMMUNITY AND DRIVES LOCAL
ECONOMIES
• FRANCHISES AND STADIUMS ADD TO CITY’S
ATTRACTIVENESS AND COMMUNITY PRIDE
NFL Commissioner, Roger Goodell
poses with Vikings fans
THE FUTURE OF THE NFL
• NFL’S VISIBILITY IS YEAR-ROUND WITH NFL COMBINE, NFL DRAFT, NFL KICK-OFF, SUPER BOWL AND THE
INTERNATIONAL SERIES HELD IN LONDON
• EXPANSION INTO EUROPE AND LATIN AMERICA
• MORE VARIETY OF FAN ENGAGEMENT
• STADIUMS AND FRANCHISES AS A PLACE FOR COMMUNITY ENGAGEMENT AND SOCIAL RESPONSIBILITY
• DEALING WITH THE ADVERSE SELECTION OF INDIVIDUALS WHO PLAY WELL BUT DISCREDIT THE
FRANCHAISE.
REFERENCES
• FORBES, HOW TICKETMASTER AND THE NFL HAVE FIXED THE PRICEOF SECONDHAND TICKETS, 9/18/2014
• FORBES, SUPER BOWL XLVIII PRICING: A LESSON IN DEMAND ELASTICITY, 9/19/2013
• FROEB, L., MCCANN, B., SHOR, M., WARD, M., (2016) MANAGERIAL ECONOMICS, BOSTON, MA:CENGAGE LEARNING
• HORROW, R. & SWATEK, K., (2011), BEYOND THE SCOREBOARD: AN INSIDER’S GUIDE TO THE BUSINESS OF SPORT, CHAMPAIGN, IL: HUMAN KINETICS
• KIM, MICKEY. "ANALYSIS OF 2012 NFL DRAFT OFFERS INVESTMENT LESSONS." INDIANAPOLIS BUSINESS JOURNAL, 28 APR. 2014: 21. GENERAL ONEFILE.
WEB. 15 MAY 2015.
HTTP://GO.GALEGROUP.COM/PS/I.DO?ID=GALE%7CA367544670&V=2.1&U=CLIC_STKATE&IT=R&P=ITOF&SW=W&ASID=7F6DD6196C5AB8A9F0A4
D38BFF3F0EC5
• O’BRIEN, K., (2013), BELICHICKWAS RIGHT! ECONOMICSAND THE NFL DRAFT, RETRIEVED FROM THE BOSTON GLOBE
HTTP://WWW.BOSTONGLOBE.COM/IDEAS/2013/05/04/BELICHICK-WAS-RIGHT-ECONOMICS-AND-NFL-
DRAFT/ZJJMGDSKJLDFMNB7XXBCQK/STORY.HTML
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The Business of the NFL - 6900

  • 1.
  • 2. PROFESSIONAL SPORTS IS A $750 BILLION BUSINESS
  • 3. THE NFL : THE QUEST TO KEEP PROFIT FROM ERODING THE NFL RANKS AS THE WORLD’S MOST VALUABLE SPORTS PROPERTY AT AN ESTIMATED $4.5 BILLION
  • 4. THE HISTORY • 1892 – WILLIAM HEFFELFINGER BECOMES THE FIRST PROFESSIONAL FOOTBALL PLAYER • THE ARIZONA CARDINALS ARE THE OLDEST CONTINUING OPERATION IN FOOTBALL • 1902 THE FIRST WORLD SERIES OF PRO FOOTBALL HELD • 1922 GREEN BAY PACKERS HAD SUCH LOW ATTENDANCE THAT LAMBEAU WENT BROKE • 1936 – FIRST DRAFT • 1939 – FIRST NFL GAME TELEVISED • 1967 – FIRST SUPER BOWL (RETROACTIVE)
  • 5. THE NFL DRAFT • 1936 • WORST TO THE BEST • HELD IN HOTEL BALLROOMS • FIRST TELEVISED IN 1980 • 1995 – DRAFT BECOMES A MAJOR ENTERTAINMENT SPECTACLE
  • 6. NFL DRAFT • CASE STUDY - CADE MASSEY & RICHARD THALER • OPPORTUNITY TO INVEST IN TEAMS FUTURE • USE OF GAME STRATEGY TO CHOOSE PLAYERS WISELY • PROFIT MAKING & VALUE
  • 7. SOURCES OF REVENUE •TICKET SALES •MERCHANDISING •VENUE •LICENSING •ADVERTISING
  • 8. BROADCAST- SPORTS TELEVISION •MOST LUCRATIVE SECTOR OF THE SPORTS INDUSTRY •BUILDS SUSTAINABLE COMPETITIVE ADVANTAGE FOR NFL – INCREASING ECONOMIC VALUE OF FRANCHISES •NFL EARNS CLOSE TO $4 BILLION IN RIGHTS FEES ANNUALLY
  • 9. COLLECTIVE BARGAINING •WHO ARE THE WINNERS? •WHO ARE THE LOSERS?
  • 10. THE SUPER BOWL • MINNEAPOLIS SET TO HOST THE SUPER BOWL LII (52) IN 2018 • SUPER BOWL MARKS THE BEGINNING OF PROFESSIONAL SPORTS YEAR • DECISIONS MADE IN ALL SPORTS INCLUDING ADVERTISING AND MARKETING BUDGETS, TICKET PRICES, HOSPITALITY, FACILITY UPGRADES AND MERCHANDISE TRICKLE DOWN FROM SUPER BOWL • MAJOR CONTROLLABLE FACTOR FOR NFL, INCREASING DEMAND THROUGHOUT THE FRANCHISE OFFERINGS
  • 11. THE SUPER BOWL •ECONOMIC IMPACT FOR HOST CITY - $300-400 MILLION •DIRECT TIES TO CORPORATE AMERICA •53 NATIONAL CORPS GAINED $257 MILLION AVG STOCK VALUE AND $13.6 BILLION IN TOTAL ECONOMIC VALUE AFTER ANNOUNCING SPONSORSHIP DEALS •HOST CITIES GO THROUGH AN ELABORATE BID PROCESS
  • 12. THE SUPER BOWL • LOCAL AND STATE GOVERNMENT INVOLVEMENT • INCLUDES PROVISION OF FIRE, POLICE, AMBULANCE AT NO COST TO NFL • AT THIS TIME, ONLY CITIES WITH NEW STADIUMS WIN BIDS • COSTS ESTIMATED BETWEEN $30 AND 70 MILLION • ESTIMATED 30 MILLION POUNDS OF SNACK FOODS CONSUMED ON SUPER BOWL SUNDAY
  • 13. STADIUMS • PUBLIC & PRIVATE PARTNERSHIPS HAVE FUNNELED MORE THAN $6 BILLION TO CITIES AND THEIR SPORTS FACILITIES • EXCELLENCE IN STADIUM DESIGN SPEARHEADED BY SPECIALIZED ARCHITECTURAL FIRMS • BRANDS A COMMUNITY AND DRIVES LOCAL ECONOMIES • FRANCHISES AND STADIUMS ADD TO CITY’S ATTRACTIVENESS AND COMMUNITY PRIDE NFL Commissioner, Roger Goodell poses with Vikings fans
  • 14. THE FUTURE OF THE NFL • NFL’S VISIBILITY IS YEAR-ROUND WITH NFL COMBINE, NFL DRAFT, NFL KICK-OFF, SUPER BOWL AND THE INTERNATIONAL SERIES HELD IN LONDON • EXPANSION INTO EUROPE AND LATIN AMERICA • MORE VARIETY OF FAN ENGAGEMENT • STADIUMS AND FRANCHISES AS A PLACE FOR COMMUNITY ENGAGEMENT AND SOCIAL RESPONSIBILITY • DEALING WITH THE ADVERSE SELECTION OF INDIVIDUALS WHO PLAY WELL BUT DISCREDIT THE FRANCHAISE.
  • 15. REFERENCES • FORBES, HOW TICKETMASTER AND THE NFL HAVE FIXED THE PRICEOF SECONDHAND TICKETS, 9/18/2014 • FORBES, SUPER BOWL XLVIII PRICING: A LESSON IN DEMAND ELASTICITY, 9/19/2013 • FROEB, L., MCCANN, B., SHOR, M., WARD, M., (2016) MANAGERIAL ECONOMICS, BOSTON, MA:CENGAGE LEARNING • HORROW, R. & SWATEK, K., (2011), BEYOND THE SCOREBOARD: AN INSIDER’S GUIDE TO THE BUSINESS OF SPORT, CHAMPAIGN, IL: HUMAN KINETICS • KIM, MICKEY. "ANALYSIS OF 2012 NFL DRAFT OFFERS INVESTMENT LESSONS." INDIANAPOLIS BUSINESS JOURNAL, 28 APR. 2014: 21. GENERAL ONEFILE. WEB. 15 MAY 2015. HTTP://GO.GALEGROUP.COM/PS/I.DO?ID=GALE%7CA367544670&V=2.1&U=CLIC_STKATE&IT=R&P=ITOF&SW=W&ASID=7F6DD6196C5AB8A9F0A4 D38BFF3F0EC5 • O’BRIEN, K., (2013), BELICHICKWAS RIGHT! ECONOMICSAND THE NFL DRAFT, RETRIEVED FROM THE BOSTON GLOBE HTTP://WWW.BOSTONGLOBE.COM/IDEAS/2013/05/04/BELICHICK-WAS-RIGHT-ECONOMICS-AND-NFL- DRAFT/ZJJMGDSKJLDFMNB7XXBCQK/STORY.HTML