The NFL Play - Top Companies That Profit From The Most Popular Sport in the US
The National Football League is like no other professional sports organization in the country.
It is probably safe to say that there is no other sports entity like it in the entire world, as hundreds of millions of televisions are tuned into the NFL's championship game – the Super Bowl – every year.
American football is the most popular sport in the United States, particularly at the professional level. But it is more than just popular, it is also extremely lucrative.
To put things into some perspective, the average net worth of the world's top twenty soccer teams is nearly $970 million, while the average net worth of Major League Baseball's 30 teams is just shy of $745 million. The two other major sports leagues in America, the National Basketball Association and the National Hockey League, have an average team net-worth of $500 million and just under $300 million respectively.
The NFL team average net worth is $1.17 billion. The least valuable NFL team, the Oakland Raiders, is still more valuable at $825 million than the 3rd most valuable NBA team, the Chicago Bulls, at $800 million.
Where there is a business like the NFL with its stratospheric profits, there are companies making money off of it. There is a lot of money that changes hands between the NFL and the individual elements of corporate America for sponsorship deals, uniforms, equipment, food and beverages at its stadiums, and myriad endorsement deals with players, coaches, teams, and even team owners.
But what are some of the companies making huge profits off this behemoth sports league?
Nike (NYSE: NKE)
The perennial sports apparel manufacturer reaps huge amounts of money even without the NFL. The profit that it makes with the league is downright formidable. Companies like Nike, Reebok, Adidas(OTCQX: ADDYY) and Under Armor(NYSE: UA) all compete for the highly sought-after contract with the NFL to manufacture and sell the league's uniforms every year.
This year could be a banner year for Nike since they won the contract and those in the know expect the company's NFL merchandise sales to top $750 million.
Verizon (NYSE: VZ)
The telecommunications giant has long had business relations with the NFL, but in 2013 it agreed to a new contract with the league to offer exclusive content. The company paid out $1 billion for the renewal, which allows Verizon subscribers to watch every NFL game live on their telephones and other mobile devices.
The deal cost the company a lot of money but since it gave them exclusive rights to NFL games, the hope is that it will draw customers away from rival telecom companies and push their revenue NFL-related merchandise over the $1 billion mark…which most believe it will.
Electronic Arts (NYSE: EA)
EA is the company that produces the popular Madden NFL video game. Previous years have topped 99 million units in sales of the video game, which replicates NFL games with authentic images of league stadiums, uniforms, and even the players themselves.
The company celebrated the 25th anniversary of the video game by releasing Madden NFL 25 in the fall of 2013. Sales for the latest special edition installment are expected to be the highest ever…and so are the profits.
Microsoft (NASDAQ: MSFT)
The NFL and Microsoft, makers of the popular Xbox video game console and the latest edition thereof, the Xbox One, have agreed to a new partnership deal worth an estimated $400 million over five years.
The company's newly upgraded gaming console allows for a more customized gaming experience using NFL content and coaches will use Microsoft's Surface tablets on NFL sidelines to create plays and watch replays with players. The deal is expected to push sales in Microsoft's entertainment and devices division over the $10 billion mark.
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