The NFL continues to be America’s iconic brand
Nothing quite compares to the $25 billion brand, not the World Series, not the NBA playoffs, certainly not the Stanley Cup. While other brands may have more widespread awareness than the NFL, it is unlikely that their consumers — and their sponsors — are filled with such unwavering fervor and forgiveness as those of this all-powerful sports league. Over the past decade, the brand has been hit with scandals that have dominated the country’s news and public conversation, including Bountygate, Deflategate, Spygate, domestic violence, animal abuse, and murder. Although the teams and players involved in the various scandals may have felt some negative repercussions (albeit only briefly in most cases), each scandal has had little punitive effect on the brand itself.
One would expect that after the dozens of incidents tarnishing the image of the NFL and its players — scandal, deceit, broken promises, cities left in the middle of the night, broken-hearted fans, wife-beating stars, murderers, physical abuse (on and off the field), controversial medical treatments, overlooked concussions, and domestic abuse — the NFL brand would be bruised battered and substantially diminished in value. Instead, what we find is the brand has consistently increased in value year after year. And, today, the NFL is at the height of its power. Using reputable sources for NFL revenues, our analysis shows the brand increased in value from $12 billion in 2004 to $16 billion in 2008 to $24 billion in 2014.
What drives the NFL brand to increase in value despite ongoing scandals?
The NFL continues to see increases in both revenue and brand value. We see growth in TV revenues, merchandise and sponsor revenue, and in ticket sales and prices. Despite the ongoing scandals involving the NFL and its players, the NFL brand remains strong, and there are two main reasons why.
Spectacle. The human race thrives on watching competition. Before our time, we can refer back to when the Roman Coliseum was at the center of the community and spectators watched gladiators fighting lions. Fast forward, and now we have the New York Giants versus the Philadelphia Eagles. Then, when the Super Bowl game decides the ultimate winner for the season, fans experience a type of letdown, much like a hangover. You can feel it in the psyche of the nation, as the countdown begins for the next season … only 20 more weeks. The football fans watch the game for the sport, not because of the personal lives of its players.
Gambling. The greater force behind what makes the NFL brand so strong is gambling. You can probably go as far back as the 1930s, when side wagers started, and office pools began to take shape. Las Vegas soon became a major stakeholder in sports betting, and now we have seen phenomenal growth in fantasy betting.
It is apparent that the birth of office football pools has evolved into the $2.5+ billion daily fantasy sports betting industry with the emergence of companies like Fan Duel and Draft Kings, both of which have sponsorship deals with NFL teams, with some owners holding equity stakes. And to think that the unofficial, unmeasured amount of bets on office pools or other friendly leagues may reach to two or three times that total. How many remaining years will the growth in the NFL value last – three, five, seven? No one knows for sure, but considering the fact that the daily fantasy sports industry is estimated to grow at 41% annually, reaching over $14 billion in 2020, according to a recent article in Forbes, this is definitely not a short-term trend. The chance of winning actual cash in a fantasy league helps distance the fans from the NFL scandals.
In comparison, one has only to look at a global brand like Volkswagen to see how a single scandal can reduce a brand’s value immediately. In 2014, the Volkswagen brand had a nominal value of $8 billion as listed by Forbes in its annual list of The World’s Most Valuable Brands. In October 2015, as a consequence of its recent manipulation of emissions control software, sales fell by 3% globally. The value of its stock has fallen in half, and the value of the brand as well as the company has fallen by 50% or more, thus reducing the value of the Volkswagen brand from $8 billion to less than $5 billion in a matter of just a few months.
Yet in spite of murder, malfeasance and mayhem, the NFL brand continues to grow month after month.