Operating a sporting franchise is obviously a complicated business. In addition to vying for reputation and prestige in their sports, franchises also compete to attract various sources of revenue to ensure economic success.

These streams usually comprise ticket sales, merchandise, broadcasting rights, sponsorships, and, for some, specialized streaming services.

Every sport, be it football, basketball, baseball, hockey, tennis, or Formula 1, will each have its own dynamics, yet the principles are the same.

Revenue Streams

• Ticket Sales: Usually taken as a primary source of income for most sports franchises, tickets are especially lucrative for high-demand games and events. For instance, the NFL’s Dallas Cowboys earn a tremendous amount of revenue solely from ticket sales at their massive AT&T Stadium.
  
  Regardless of whether you are a Cowboys fan or any other team’s, you’ve probably dreamt of assembling your own draft of legendary players, and fantasy sports allow for just that. Right now, draftkings promo code provides new users with both bonus bets and deposits.

• Merchandise: Coming in second next, merchandise sales of jerseys, caps, balls and other team-branded apparel are another source of income and brand visibility. Team merchandise on fans is a walking billboard that raises the team’s market visibility and also gives the fans a sense of belonging.

• Broadcasting Rights: For those who can’t attend the games personally, broadcasting comes as the second-best thing. Also mong the most lucrative sources of income for sport franchises and leagues like the NFL and Premier League, they enter into multi-billion-dollar deals with world-wide broadcasters. The income is typically shared among teams, making it an enormous source of revenue.

• Sponsorships: Sponsorships and endorsements are very important for sports franchises of all sizes since even smaller local teams can have sponsors to help them run the organizations. Businesses team up with teams to reach their followers, providing cash and name recognition. The Los Angeles Lakers, for instance, have numerous prominent sponsorship agreements.

• Dedicated Streaming Services: With the growth of digital media, dedicated streaming services have entered the limelight. They cover a niche audience that prefers watching a single sport or league without having to pay for cable packages. They provide exclusive content and live matches, earning extra revenue through subscription charges. A good example is the World Rally Championship’s streaming app.

Sports Franchises by Revenue

Since we covered the most significant revenue streams, the following is a breakdown of the highest-earning franchises and an estimated share of their income:

• Football (NFL): As previously mentioned, the Dallas Cowboys are among the highest-valued franchises in the NFL, and their revenue is chiefly generated through broadcasting rights (40%), sponsorships (25%), ticket sales (20%), and merchandise (15%).

• Basketball (NBA): The New York Knicks are very successful, generating revenue primarily from broadcasting rights (45%), sponsorship (25%), ticket sales (20%), and merchandise (10%).

• Baseball (MLB): The New York Yankees are an example, where most revenues come from broadcasting rights (40%), sponsorships (25%), ticketing (20%), and merchandise (15%).

• Hockey (NHL): The Toronto Maple Leafs earn revenue primarily from broadcasting rights (35%), sponsorships (25%), ticket sales (25%), and merchandise (15%).

• Tennis: Although individual players are more in the spotlight, the ATP Tour makes money from broadcasting rights (50%), sponsorships (30%), and tickets (20%).

• Formula 1 (F1): Ferrari is the most successful F1 team, having the highest number of constructors’ titles. They generate their revenue mainly through sponsorships (40%), broadcasting rights (30%), and, what’s interesting, merchandise brings in much more than in other sports (30%). Ferrari’s success on the track gets them substantial sponsorship deals, and their brand is much sought after worldwide.

As we saw from the examples above, broadcasting rights are always the most profitable revenue stream in these sports. This is due to the sport’s huge global popularity and the strong demand for live content. Sponsorships and ticketing are also prominent, depending on the sport and the team’s popularity. 

A sports franchise is a complex business that depends on a wide range of factors to be successful, so finances should not be a primary focus, but they do help.

Though broadcasting rights tend to be the most lucrative, others, such as sponsorships, ticketing, and merchandise sales, are equally essential, as it was evident. As the sporting business continues to develop, franchises are pursuing new revenue sources, including niche streaming services and international deals, to ensure their continued financial health and expansion.