Which Matters More for a For-Profit Sports League: Game Day Attendance or Television Broadcasts?

Unless you are in the top division of a very popular sport, you likely have little to no TV revenue. In such cases, ticket sales and concessions become paramount, with TV serving to advertise the experience. Conversely, if you are the NFL, EPL, or NBA, you are living off national and international media contracts. For the NHL and MLB, local TV deals and their natural synergy with corporate sponsorships also play a crucial role.

Game Day Attendance and Television Broadcasts: Key Revenue Sources

Both game day attendance and television broadcasts are vital for the survival of a for-profit sports league. However, if one had to prioritize, television broadcasts take precedence due to the significantly larger revenue stream. Without solid television coverage, in-person attendance is likely to suffer.

Television Broadcasts as the Key Revenue Driver

Television broadcasts are the most significant source of revenue for professional sports leagues. The National Football League (NFL) and its partners, including CBS, NBC, ESPN, Fox, and Amazon Prime, are currently securing a $105 billion deal for the next 11 years, starting in 2023. Similarly, ABC, ESPN, and TNT pay $2.66 billion annually to the NBA until the 2024–25 season. Teams also benefit from additional revenue generated by local sports TV and radio stations for game broadcast rights.

In Major League Baseball (MLB), a new agreement with Turner Broadcasting System (TBS) is worth $3.75 billion from 2022 to 2028. Fox, which holds the World Series broadcasting rights, currently pays $5.1 billion until 2028. Teams also receive revenue from locally televised games.

The newly formed United States Football League (USFL) has no chance of surviving without its games being televised on Fox and NBC. These agreements underscore the critical importance of television broadcasts in generating substantial revenue.

Case Study: Green Bay Packers

Today, television is the dominant force in professional sports. The Green Bay Packers, one of the few pro sports teams that are required to file public statements, illustrate the importance of television revenue. In the 2019–20 season (before the impact of the COVID-19 pandemic), the Packers reported local revenue of $210 million, including ticket sales, and $295 million in national revenue, primarily from TV rights fees.

While both sources of revenue are essential, it's clear that television money is the major revenue source. The Packers' total expenses for that season were $436 million, highlighting how critical TV revenue is to covering operational costs.

Conclusion

For a for-profit sports league, the television broadcasts are the biggest source of revenue. Without strong television coverage, in-person attendance is likely to decline significantly. Therefore, securing and maintaining valuable television broadcast slots is essential for the financial sustainability and success of any professional sports league.