How Do Sports Leagues Make Money?
- Feb 27
- 2 min read
Reid Packard
New York City, USA
Professional sport leagues may seem as though they only care about the competition and entertainment, as each individual team makes income directly. However, they are much more financially cognizant behind the scenes. In 2024, the NFL generated $22.2 billion in revenue, the MLB generated $12.8 billion, and the NBA generated $11.6 billion. Many fans believe that individual football teams benefit directly from hosting games and selling merchandise but, in reality, all of the revenue goes to the NFL first, which then distributes the money to each of the teams. However, not every team gets an equal share of the profits; the NFL splits its revenue into two main categories, national revenue and local revenue.
National revenue is divided evenly between all 32 teams. In 2024 each team had a national revenue cut of $432.6 million, which equates to $13.8 billion of total national revenue (62% of their total revenue of the season). The NFL divides it evenly, so every franchise will still get an equal revenue stream regardless of the local market. The national revenue is primarily from long-term broadcasting license deals made by the NFL for big broadcasting companies such as ESPN, FOX, ABC, and NBC. These deals generally account for $12 billion of the national revenue annually. The remaining money comes from league-wide brand sponsorships such as Gatorade or Bud Light.
Local revenue is not evenly distributed between teams; each team keeps the money it earns directly. The main source of local revenue is ticket sales for each teams home games. In 2024, the ticket sales for the entire league was 11% of the total league revenue in 2024. The remaining local revenue comes mainly from individual team sponsorships. The Green Bay Packers are the only publicly traded NFL team, which requires them to detail their revenue every year. All of the exact figures are based on their earnings report for 2024. The Packers reportedly made $286.4 million in local revenue, showing that most teams make more money from the national revenue than from the local revenue.
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