The National Football League (NFL) is in the midst of a golden age of financial prosperity. Between franchise valuations and media rights deals, we have witnessed two massive inflationary cycles. As a result, according to recent reports, media rights deals for the NFL bring in a stunning $12.4 billion per year on average. The league continues to benefit from these mammoth contracts and the financial picture for its 32 franchises remains bright.
That had to be the sentiment with which ESPN and the NFL signed a historic pact last month. This agreement allows Disney to purchase the NFL Network, NFL Fantasy, and distribution rights for NFL RedZone. In exchange, ESPN would give ESPN a 10% equity stake in its company to the NFL. As expensive as it is, this deal represents a fundamental shift of the landscape of media rights. It tightens the NFL’s ironclad hold over lucrative TV contracts even further.
The NFL’s financial health shines through our analysis of the league’s on-field performance. In 2024, the league’s average EBITDA exploded by 7.9%, hitting an astonishing $137 million. Much of this growth is fueled by increasing national revenues. They leaped from $403 million to an astounding $433 million per franchise over the course of that same seasonal jump.
Franchise valuations have soared as well. It’s no wonder that there are now eleven NFL teams worth at least $8 billion. That’s a huge jump from only two teams in this tier one year ago. This recent increase is indicative of how desirable NFL franchises have become to investors and the overall market.
The Dallas Cowboys have a $1B lead in sponsorship revenue. They pulled in close to $300 million in sponsorships throughout 2024. That’s more than double the next closest named team, with almost $250 million in sponsorship income. No, it’s the financial clout of NFL teams that would amaze. By the 2024 season, their median revenue jumped up to $687 million, a 7.3% leap from the season prior.
The recent changes in federal and private ownership regulations have significantly impacted the current valuation landscape. Investors have long anticipated a 20%-25% valuation discount. This discount comes into play when they plan to buy a minority interest that wouldn’t give them day to day operational command over the franchise. Changes in the rules that now permit private equity firms to invest in NFL teams have drastically changed sale price dynamics. Their participation has done wonders for establishing a floor on valuations, calming fears about liquidity for would-be investors.
Despite these positive developments, private equity firms have only made three investments in NFL teams since the league permitted such deals a year ago. Yet they have excitedly queued up outside of almost every new franchise. This record-setting number reflects their passionate interest and confidence in the league’s long-term success.
Whether seen through the lens of booming franchises or accounting statements, the NFL is on fire financially. This boom comes against a backdrop of increasing competition for eyes and sponsor bucks. As media consumption patterns evolve and new technologies emerge, these changes will likely shape the landscape of professional sports for years to come.