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Commercial Stakes High As The New NFL Season Kicks Off

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Enthusiasm is high among US fans as the new National Football League (NFL) season kicked off in September. While teams will compete for success on the field, off it both teams and brands are contending for the right commercial partnership, one that brings in revenue for the former and unlocks fans’ purchasing power for the latter. Even though the NFL boasts the highest sponsorship value among the top US leagues in 2023, much of it remains untapped and pressure is building for the league to reform its commercial strategy so as to maximise revenue streams.

The NFL tops the list, but still has room to grow

The NFL’s annual sponsorship value across four key categories, covering uniform apparel and venue naming rights, stands at USD1.1 billion in 2023, accounting for both existing deals and untapped potential.

The NFL leads among other top North American leagues, comprising 30% of the combined sponsorship value

Source: Euromonitor International

The league’s unmatched following across different fan segments ensures wide support in the US, with commercial value mirroring brands’ interest in securing a sponsoring spot within the league.

While the NFL’s commercial appeal is undisputed, its commercial strategy on sponsorship categories has been more conservative when compared to other major leagues in North America. The National Basketball Association (NBA) made history in 2017 when it introduced patch sponsors – sponsorship featured over the front left shoulder of teams’ uniforms. The initiative has proven to be a financial success, reportedly allowing teams to bring, initially, an additional USD5-10 million a year but growing to USD20-30 million annually for new deals signed by top teams, as of 2022.Uncapitalised Sponsorship Value by Competition 2023, North America

While other leagues followed the NBA’s suit over the next years, with similar initiatives undertaken by the National Hockey League (NHL) and Major League Baseball (MLB), the NFL has maintained a no sponsor on uniform policy (with the exception of sporting equipment).

The NFL is the number one league in North America by uncapitalised deal value, totalling over USD564 million in 2023 – nearly 50% of the league’s annual sponsorship value

Source: Euromonitor International

Apparel dominates the league’s sponsorship landscape

When it comes to total sponsorship value by industry, apparel and footwear takes centre stage in the NFL. This is due to the NFL’s deal with Nike, one of the biggest sponsorships in the sports industry, valued at USD120 million annually, as of the latest renewal, and currently set to expire in 2028.

The league has long had a centralised deal for uniform apparel in place to supply all 32 franchises with matchday and training clothing. While this type of deal ensures a fairer revenue distribution across all teams, it limits many top teams’ ability to bargain for higher-valued deals. If NFL franchises were negotiating agreements separately, the total uniform apparel value across all NFL teams in 2023 is estimated to be worth over USD245 million a year – double the current deal the league has with Nike.Top 10 Industries by Sponsorship Value 2023, NFL

Finance companies eager to catch stadium naming rights

Finance and insurance is another crucial industry in terms of sponsorship value, totalling USD154 million across 16 deals in 2023. Deals with finance brands are predominant within stadium naming rights agreements, with half of the venues in the NFL bearing a brand name operating in the industry, including the likes of State Farm and Bank of America.

Finance companies are among the few with the financial capabilities to fund the investments needed for the construction or renovation of sports venues. However, brands operating in other industries are catching up to the unique opportunities of having their name associated with an NFL team. This is the case with Allegiant Air, an airline that signed with Las Vegas Raiders in 2019, inking a 30-year deal estimated to be worth over USD20 million a year for their brand-new stadium.

The goal: Open new revenue streams

Over the last decades, the NFL has enjoyed the benefits of its alignment with sports commercialisation, with frequent in-game breaks allowing for more TV advertisement. Also, it benefited from the blend with pop culture and the broader entertainment industry, as symbolised by the popularity and unmatched commercial value of the Super Bowl halftime show, which recently saw the participation of Rihanna in 2023 and an ensemble of hip-hop stars including Dr. Dre, Snoop Dogg, and Eminem in 2022.

To retain its dominant position, however, the league should focus on its commercial strategy and revenue maximisation. This is why stakeholders are increasingly being urged to look at other top leagues in North America that have recently allowed their teams to add sponsors on their uniforms to open new revenue streams.

Euromonitor’s Sponsorship Valuation Model provides stakeholders with an accurate view of the cost of sponsorship assets across Europe and North America's top sports leagues. To learn more, please reach out to Davide Calzoni.

Have a more in-depth read on the Sponsorship Valuation Model and last year’s results in our briefing, The Price of Sports Sponsorship.

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