Most Popular Sport

Ever had the argument about which sport is the most popular? Don’t, ESPN just settled the discussion when it signed the new Monday Night Football deal with the NFL. The deal will bring in $1.9 billion each year for a mere seventeen nights of the year.

Let’s put this into perspective. The National Basketball Association earns roughly $930 million dollars per year from selling its broadcasting rights. CBS pays $771 million per year to broadcast March Madness. NASCAR brings in $686 million per year and Major League seems like a pastime with its poultry $428 million per year. I guess baseball can always look at the NHL to make itself feel better, NHL gets $65 million per year (a huge drop compared to the $120 million before the 2005 lockout). Add these all up, and you still don’t get what the NFL earns each year.

The current deal between the NFL and CBS to broadcast AFC games is worth $622.5 million. The NFC, although it has the same number of games on TV as the AFC, is worth $712.5 million. Why the difference between the two? Simple supply and demand, the demand for the NFC is greater. To see this, just look at what teams are in the Eastern Division of each league. The AFC has power houses like New England and the J-E-T-S, but it also has low demand teams like the Dolphins and the Bills. The NFC East is stacked with high demand teams. Forbes comes out each year with the most valuable sports franchises, and at the top of the list is the NFC East: Dallas Cowboys #1, Washington Redskins #2, New York Giants #4, and the Philadelphia Eagles #7. Supply is the same, but the demand for NFC is greater, and thus principles of microeconomics tell us revenues go up.

In addition to these contracts, the NFL has a contract with NBC for Sunday Night Football. This nets the NFL and additional $650 million per year. Last night’s Cowboys-Jets game earned a Nielson rating of 16.9. Not only is the rating up by 3 percent from last year’s Sunday night opener, but is the highest rated Sunday Night Football game ever (beating out last year’s Eagles –Giants last minute victory and Giants-Cowboys which was the opening game at the new Cowboy Stadium). Game 6 of the NBA finals where the Mavericks took down the evil empire from South Beach earned a rating of 15.42.

As an economist, I believe money can talk. And it is clearly shouting that Football is king.