The Pittsburgh Steelers, along with the rest of the NFL teams, received some troubling news after the NFL lost its Sunday Ticket lawsuit. This lawsuit, which originated at Mucky Duck Sports Bar in San Francisco back in 2015, has led to significant financial repercussions. As a result, the Steelers and all 32 teams are now required to pay their share of the damages, which have ballooned to approximately $449.6 million.
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Pittsburgh Steelers Team President Art Rooney II stands on the field prior to a game.
However, there's a silver lining for the Steelers amidst this financial setback. Kurt Badenhausen, a sports valuations reporter from Sportico.com, conducted in-depth research into the NFL's profits from the 2023 season. His findings revealed that the league's national revenue soared to an impressive $13 billion.
Based on this revenue, the Steelers are set to receive a substantial payout of $404 million from the league for the 2023 season. This windfall comes in addition to the financial gains the Steelers generate locally, offering a significant boost to their overall earnings.
“Each of the 32 NFL teams received just over $400 million from the league office for the 2023 season, according to multiple people familiar with the league’s finances who were not authorized to speak publicly. The tally is up 6% to 8% from the 2022 season, depending on the accounting used by the team.”
Badenhausen provided more insight into the factors contributing to the NFL's impressive $13 billion revenue. He meticulously analyzed various elements that played pivotal roles in driving the league's financial success.
“The total represents national media rights, league sponsorships and shared revenue and royalties from the league’s various affiliates and subsidiaries, such as NFL Properties, NFL International and NFL Enterprises and adds up to roughly $13 billion.”
One of the primary factors was the lucrative broadcasting deals with major networks, which brought in substantial revenue through the sale of television rights. These deals ensured that NFL games reached millions of viewers, boosting ad revenues and viewership ratings.
"The league’s media rights contracts with ESPN, Fox, CBS, NBC, Amazon and YouTube represent the bulk of the equally shared revenue," wrote Badenhausen. "Last season kicked off the latest round of deals that are worth at least $125 billion over 11 years."
Additionally, the league's strategic partnerships with major sponsors and advertisers contributed significantly to its financial growth. Badenhausen detailed how the NFL has been so profitable.
"The NFL also had more than three dozen league sponsors in 2023. Many of these brands have been partners for multiple decades, including Gatorade, Visa, Campbell Soup and FedEx, while Oakley and Lowe’s both signed extensions to their deals last year. The national payout is up 115% over the past decade and should rise at a similar rate over the next decade to more than $800 million per team with the media deals secured."
Moreover, the NFL's international expansion efforts, including games played in London and Mexico City, have significantly tapped into new markets and broadened the league's global fan base. These international games have not only boosted ticket sales, but also attracted international sponsors and advertisers, contributing to the league's financial success.
Steelers.com
Running back Najee Harris traveled to Mexico, where the team has a huge fan base, to announce the Steelers' fourth-round selection in the 2022 NFL Draft.
Badenhausen detailed why the NFL is the envy of every other major professional sports league, highlighting two major factors. First, the guaranteed revenue each team receives from the league annually is a substantial advantage. Second, the NFL benefits from a hard salary cap, which limits excessive spending by team owners, unlike the NBA and other leagues. These elements are key to the NFL's profitability, according to Badenhausen.
Steelers Can Handle The NFL's Financial Burden
Although the NFL and all 32 teams, including the Steelers, are facing a potential payout of nearly $450 million due to the lawsuit, the league plans to appeal the decision. If the appeal is unsuccessful, each team will have to cover its share of the penalty.
NFL.com
Steelers Team President Art Rooney II looks on before a game.
However, the Steelers' 2023 earnings demonstrate their ability to manage this financial burden. While paying such a large amount is not ideal, it is unlikely to threaten any franchises. The financial dynamics of the NFL remain intriguing, as the league continues to set the economic standard for American sports leagues.
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