By any measure, the NFL is the most successful sports league in history. For all the talk of North America’s “Big Three” sports (or to appease hockey fans, Big Four), the reality is that there’s pro football, and then there’s everything else. The most-watched television programs in history, without exception, are Super Bowls of various years. In 2017, the NFL earned a reported $14.2 billion in revenue, up $900 million from 2016. Commissioner Roger Goodell has targeted $25 billion by 2027, or 6% annual growth. The league, which operated as a non-profit organization from 1942-2016, earns its money from broadcast rights, ticket sales, merchandising and licensing rights. All NFL teams are individually owned, and subject to taxes. The league share the revenue it earns with its players in the 46-48% range, and among its teams.

NFL's History

It wasn’t always this way. The NFL was popular from the 1960s through the 1990s, but not dominant to the point of exclusion. In this millennium, the NFL has adopted an aggressive marketing strategy dedicated to turning non-fans into dilettante fans, casual fans into knowledgeable fans, and hardcore fans into obsessive fans. During football season, the most-watched programs on TV are Sunday NFL games. NFL games take place in cavernous stadiums that draw an average of 70,000 fans per game, making these the most highly-attended sports league games in the world, except for auto racing. However, ticket sales are little more than a rounding error on a typical NFL team’s balance sheet. It’s TV that drives the train. In a huge nation where only 31 cities field teams, over 90 percent of self-described NFL fans have never attended a game.

Smaller Than You Think

But publicity alone doesn’t account for magnitude. Compared to its sporting competitors the NFL is, if you will, in a league by itself. Compared to other business ventures, the NFL is a middling enterprise about the size of your average regional tool-and-die manufacturer. NFL revenues were projected to be about $14 billion in 2017.

GameStop (GME) took in $8.6 billion in 2017, surely The NFL is by no means a true titan of commerce. And of course, the league’s revenue is generated by 32 teams. Your average NFL team grosses less than $300 million annually. (For related reading: 5 Most Valuable NFL Franchises)

Wal-Mart Stores Inc. (WMT) takes in more money in 5 hours than your average NFL team does all year. In fact, Walmart operates a store in suburban Miami that generates as much revenue as the Miami Dolphins do (the Walmart location wasn’t built with taxpayer funds, either). Yet the NFL and its teams wield vastly disproportionate influence. Why?

Largely because of personalities. The NFL forbids corporations from holding majority stakes in its teams, which means that its owners are a handful of prominent billionaires adept at currying public favor. (“Build me a stadium, or I’m moving this team to Los Angeles.”) Half the owners in the league inherited their teams, and a couple of the remaining ones haven’t been in existence long enough to be bequeathed to the next generation.

Commissioner Goodell

League commissioner Roger Goodell might be lambasted in the press and among the public, but the criticism is of no consequence. His job really only has two purposes: increase revenue, and keep at least 17 owners happy at any given time. By revenue measures, he’s easily the best commissioner in sports, your personal feelings about Goodell notwithstanding. (League revenue was $6.5 billion in 2005, the year before Goodell took office.) The commissioner took home $35 million last year, which is actually a 20% decrease from the whooping $44.2 million he made in 2013. In December of 2017, Goodell extended his contract with the NFL for another five years, and will be paid a salary of $4 million a year with the majority of his income generated from the league hitting certain financial targets. 

The league announced in 2016 it would give up its tax-exempt status which dates back to 1942. The switch will result in the NFL no longer being classified as a not-for-profit, which means no tax-exemption and less public disclosure of company finances, including employee salaries. CNN reported that Citizens for Tax Justice estimated the NFL has saved about $10 million per year because of the exemption, a drop in the bucket with revenues in the billion dollar class. The reason the number is so low is because it applies to the league office, the 32 different clubs pay taxes individually according to commissioner Goodell.

Blink and You’ll Miss Something

Again, the primary catalyst is television. Almost two-thirds of the league’s money comes from one uniform source: TV revenue, practically all of it national. Every few years the NFL renegotiates its television contracts, leading to a scenario whereby representatives of NBC, CBS, Fox and ABC (under its sports arm, ESPN) race to see who can throw the most money at the aforementioned billionaires.

In January of 2018, Fox announced that they had won the rights to air Thursday Night Football on their channel for the next five years, after two years of split ownership between NBC and CBS. While terms weren't disclosed for the deal, it's probably more than the last contract, which was valued at around $450 million.

At this point, the league almost sells itself, building on its history of success. 2017's Super Bowl drew 111.9 million viewers in the United States, a decline from 2016's record of 114.4 million views last year. However, that means that close to 200 million Americans didn’t watch the Super Bow.l

For the first 50 years of its existence, NFL games were played almost exclusively on Sundays. In 1970 the league conducted a brazen experiment – engage the one broadcast TV network that didn’t yet carry games (ABC, at the time) with a weekly Monday night telecast. Monday Night Football became and remains a cultural phenomenon. A few decades after its successful debut, some executive in the NFL offices looked at a calendar and noticed that left 6 days per week without nationally televised prime-time football—a veritable desert just waiting to be colonized. Currently the NFL broadcasts games 3 nights a week (Sunday, Monday, and Thursday) in addition to the traditional slate of Sunday matinee games. If there’s a saturation point, we don’t seem to have reached it yet. CBS Thursday night games averaged 13 million viewers in 2017, ESPN’s Monday night games over 11 million, and NBC’s Sunday night games 18 million.

Even secondary endeavors, such as the NFL’s official fantasy football operations, serve a purpose beyond the modest revenue they directly generate. They keep fans invested all week (and all season) long, turning the NFL from a part-time entertainment vehicle into a full-time compulsion.