Franchise Amortization

[mage lang=”en|sp|en” source=”flickr”]franchise amortization[/mage]

The Big Business Of Professional Football

Professional American football may as well be the most profitable sports in the world, having earned an income of $17.8 million from $204 million revenue in 2006. Nearly three out of four Americans watch at least one NFL game on television every season, and considering it’s scheduled on primetime, it beats out any other sport when it comes to having the most views.

From humble beginnings to a multi-billion business

American Football started out pretty unassuming, with a bunch of college students deviating from the English sport rugby and soccer. The first intercollegiate football game between Rutgers and Princeton happened in 1869 and from then on, American football went on to become a national (and even international) pastime. Today it has evolved into a professional sport and a multi-billion dollar business.

Worldwide audience

NFL is now available for worldwide viewing and is not only enjoyed in the United States but has fans worldwide. Even high school and college football games have big fans and are broadcast on cable television every Friday and Saturday afternoons during football season. Professional football games are broadcast every Sunday and Monday nights, and during the football season, a dozen games are broadcast every weekend. At the end of NFL season, the national championship is determined in the Super Bowl where the champions from the National and American conferences finally meet. Played in January, the NFL Super Bowl has been called “the most watched sporting event of all time.” It is televised around the entire planet, gathering a worldwide audience, and with dozens of foreign translations.

The NFL revenues

NFL and its franchises get its revenue from sponsors and television commercials. The competition among the networks for the game’s coverage rights also contributes to the high value of the NFL franchises. In the 1920s, a franchise cost merely $100. By 1960, each franchise was worth about $2 million. When NFL decided to expand and sold teams to Jacksonville, Florida and Charlotte, North Carolina in 1993, the cost of the franchise was $140 million dollars. Also in that year, the NFL signed a four-year, five-network television contract and totaled almost $4.5 billion dollars in revenue.

The most valuable franchise in the NFL

The Dallas Cowboys, NFL’s most valuable franchise, is building a $1 billion stadium which is set to finish by 2009. Because of this stadium that is financed by both private and public money, the Dallas Cowboys is now worth $1.5 billion. Such teams as the Jacksonville Jaguars, Atlanta Falcons, and Buffalo Bills are complaining that the several millions they earn every year are insufficient to keep them competitive against richer teams like Washington, New England, and Dallas. The NFL has a salary cap that limits the player salaries to 57% of the total league revenue but teams can go beyond this limit by signing bonuses which get amortized only after the life of the contract. Cowboy’s star player, Jones is worth more than $1 billion and because of this new stadium, can lure a lot more money and thus inflating his bank account.

About the Author

Rick Grantham is an avid sports fan. Most of Rick’s articles focus on
. Many articles are related to
mlb merchandise
and other sports related topics. Rick is a contributing author to BooYah Village