For many, sport is a way of staying fit, whilst others prefer to watch others do the work while they cheer them on. What many forget is that sport is also a business, generating billions of dollars, euros and pounds each year.
This is a million miles from the sportspeople of the early 20th century, who typically held down jobs alongside playing for some of the top leagues of their time. Over the last 100 years or so, sports leagues have been finding ways to turn the pastimes of millions into global brands that provide hospitality services, clothing lines, and entertainment to their customers.
In the 21st century, these sports, leagues and clubs have grown from their humble beginnings into behemoths. These huge brands are spread across all continents, and cover just about every major sport played by humans today. They include top flight soccer in England, Germany, France and Spain, baseball in the United States and Japan, and hockey in North America. Here is a look at three of the 10 biggest.
National Basketball Association (NBA)
The NBA is the largest and highest valued basketball league in the world, and the fourth biggest series overall. Valued at around $5 billion, the league has grown in value in recent years. The teams themselves also have large valuations, with the New York Knicks topping the table at $4 billion, whilst the average of the 30 teams is $1.9 billion. In the 2018 season, each team received a total of $110 million in revenue from the league (made up of TV deals, licensing, international streaming, and sponsorship deals). On court success does not always mean financial success though. The Knicks have poor odds to win the NBA championship this season, whilst the the LA Clippers – who are most likely to win this season – are valued at just over half that of the Knicks and have just under half of their annual revenue.
The total revenue of the NBA last season totaled $8 billion with all but one of its teams turning a profit. This is a huge turn around, as in the early 2010’s most NBA teams were losing money. The fortunes were changed when a major TV broadcasting rights deal was signed in 2016, totaling $24 billion. Major investments, like the Knicks’ stadium redevelopment in 2013, have also seen many new revenue streams open up. This is a trend across all sports, since the multi-billion dollar stadia are otherwise left empty for large parts of the week when games are not taking place, making them ideal for conferences and other hospitality services.
Formula One is the top flight competition for single seater car racing in the world. For most of its history, its commercial rights and regulations have been controlled by the Federation Internationale de l’Automobile (FIA). They were later split, however, with the FIA retaining the regulatory role and a consortium of teams, led by Bernie Ecclestone, taking control of the commercial rights.
Ecclestone is often credited with helping the sport to grow into the multi-billion dollar sport that it is today, mostly through making the sport become better organised, making it more professional, and signing multi-million dollar TV rights deals with broadcasting companies around the world. Today, the sport generates around $2 billion in revenue and was purchased in 2017 by Liberty Media for $4.6 billion.
National Football League
The NFL is the most valuable sports league in the world. It generates around $13 billion of revenue, eclipsing the revenue of every other sports league in the world. Its most valued teams are worth more than the total value of some other sports leagues. For example, the Dallas Cowboys is currently valued at $5.5 billion, whilst Formula One was bought for $4.6 billion. It’s not only the balance sheet that is astonishing, the revenue of NFL teams is huge as well. The Cowboys also had the highest turnover, with $950 million in 2019, generating a net profit of $420 million. The next closest team, the New England Patriots, have a turnover of $600 million and a net profit of $240 million. All teams in the NFL are profitable, with the lowest net profit being made by the LA Rams, who made $30 million on their $401 million turnover.
Like most sports, the majority of the NFL’s revenue comes from TV rights deals, with less than 50% being made up from activities like ticket sales, sponsorship deals, merchandising, and licensing. The league is also starting to see growth in online streaming and sports betting which could take up larger proportions of its revenue in the coming years.
From its humble beginnings, sport has grown to become one of the biggest industries in the world, bringing in many billions of dollars each year. This is quite the change in just over a century.