No matter where you live, professional sports are a big part of your nation’s culture. Of course, the actual competitions and the teams and players that take part in them may vary in popularity from country to country, but the mere presence of sport is almost universal.
As are the activities that go along with major sports, such as visiting sports bars, buying replica merchandise, and placing wagers on games.
We can see just how popular this latter activity is by looking at the long list of free bet offers that are available to fans in many countries, showing that there are hundreds of bookmakers in the market to meet the huge demand.
This love of sports is ingrained into the identities of many fans. It is often as much a part of them as the place they were born or the career path they’ve taken.
But sport is more than just a passion, it’s a business – a big business for that matter. Each year, major leagues and teams generate tens of billions of dollars in revenue, much of which is shared with their highly-paid athletes that put on a show for fans each week.
This money doesn’t, however, come from just one place. Instead, sports leagues have very diverse businesses that generate revenue from a whole host of different sources. Some bring home more dough than others, making them more important to the success of the leagues.
Ticket sales were once the only meaningful source of income for sports leagues. Teams would charge fans a fee to be able to stand at the side of the pitch and watch the action in person and maybe collect a few extra coins by selling programs and food.
In the days before television, this was the only way you could see a game live and if you missed it, you’d be waiting until the following day’s newspaper to learn the outcome.
Given that some of the world’s biggest sports teams can generate upwards of $10 million in ticket sales from a single game, you might think this is a large part of their revenue. Yet, it often isn’t.
The NFL, for example, makes just 1.25% of its annual revenue from fans paying to watch games from their huge stadiums.
Of course, the small number of games in the NFL means this proportion is smaller than in other sports, but it’s not that much of an anomaly.
The English Premier League, which has 380 matches per season (40% more than the NFL) generates around 10% of its annual income from ticket sales.
Sponsorship deals can come in all shapes and sizes, ranging from tiny logos printed on a player’s sleeve to huge banners placed right around the stadium.
Companies that want to increase their sales, boost brand awareness, or associate themselves with success will pay teams and leagues to feature their branding in prominent places to gain exposure.
The exact percentage of revenue that these kinds of deals make up varies from sport to sport, but it is almost always several times larger than ticket sales.
For example, Formula 1 reportedly earned $30 billion between 2004 and 2019. In 2018, this income accounted for almost 45% of the entire pie, a sizable slice, whichever way you cut it.
In the English Premier League, that proportion is 30%, still more than double that of ticket sales.
But these two income streams don’t come close to matching the size of television rights deals. For almost every sport, these contracts for exclusive rights to broadcast some, or all, games are the biggest driver of revenues.
In English football, 57% of all income is derived from TV with domestic broadcasters Sky, BT Sport, and Amazon forking out £5.1 billion ($5.7 billion) and a further £5.3 billion ($5.9 billion) coming from overseas contracts over the three year period from 2022 to 2025.
Across the pond, the NFL does even better than television. It generates $7.7 billion per year from its contracts with various broadcasters, making it the league’s biggest revenue source by far.