What Makes an NFL Team Valuable?

While I was watching the NFL season opener last night of the Dallas Cowboys versus the New York Giants, NBC flashed an intriguing figure on the screen: Forbes once again named the Cowboys the league’s most valuable team for the sixth consecutive year, raking in $2.1 billion.

This makes them the most successful brand in the professional football business. The only sports team in the world more valuable than the Cowboys, Forbes says, is U.K. football team Manchester United. But why the Cowboys? This team hasn’t been to a Super Bowl in more than 15 years (Super Bowl XXX in 1996) and while they often makes the playoffs as a wildcard, the Cowboys do not normally advance beyond the divisional round of NFC playoffs.

So what’s the secret to the Cowboys’ success? A few elements that make a football franchise attractive, lucrative, and ultimately profitable include sponsorship deals and TV contracts. Teams also continue squeezing the most out of those loyal fans who trek to the stadium on Sunday through higher rates on premium seating. 

Forbes’ Mike Ozanian makes some key points: the Cowboys pull in nearly $20 million more in sponsorship revenue than any other team, drawing dollars from Bank of America, PepsiCo, and Ford Motor. Owner Jerry Jones, Ozanian says, has the gutsy knowhow and ferocity to extend his brand beyond Cowboys Stadium in Arlington, Texas, and into national messaging:

“Jones has been able to monetize his team’s popularity because he understood the importance of sponsor activation earlier and better than any other owner. His 2010 mobile marketing deal with Direct Energy is a perfect example. Rather than fight Jones, the NFL has come to recognize that his entrepreneurial instincts are good for the league, like when he raps and dances for Papa John’s pizza, which has sponsorship deals with the Cowboys and the NFL.”

This idea harkens back to a feature story I wrote for the February 2011 issue of QSR magazine about the big risks and big rewards of sports marketing. Dallas had just hosted its first Super Bowl, and I spoke to spokesmen from Papa John’s, Pizza Patron, and PepsiCo to determine why they got involved with Super Bowl marketing and how it paid off. 

For the story, I interviewed Bill Chipps, senior editor of the IEG Sponsorship Report, who said failing to activate sponsorships is akin to buying a toy without batteries:

“Smart sponsors are not just signing the sponsorship and walking away from it, hoping they get all this return on investment. When you buy a sponsorship, you get the typical benefits—it might be tickets for hospitality, signage, that kind of thing. That’s all fine and dandy, but to really get the biggest bang for their buck, a marketer needs to allocate additional dollars to activate the sponsorship and bring it to life.”

The ROI for the Cowboys has paid off big. Using the inherent heart-mind connection that fans have to sports teams, the Cowboys remain the nation’s favorite team according to an ESPN poll, handily earning its long-standing nickname of “America’s Team.”

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s