Are You Ready For Some Football (Commerce)?

11. September 2017.








Well, we had a totally different intro written for this piece before the New England Patriots blew it on Thursday night and threw away (and we mean, literally threw away) their home football opener to the Kansas City Chiefs. (Insert palm-to-head motion here.)

As it turns out, though, the Pats aren’t the only thing that might need a little bit of a boost.

Consumer spending has some economists pulling out their worry beads. Sure, consumers are spending, and that spending reached a nine-year high in July. But some economists have expressed concerns that the rate of growth in that spending isn’t what they’d like to see, especially since it drives two-thirds of the U.S. GDP. Little hiccups and dips can make a big difference. National Football League (NFL) football is a lot more than America’s most exciting pastime: It’s also something of a shot in the arm for the economy.

So, are you ready for some football?

Football Makes Lots of Money By Itself

Taken on its own, the NFL is a massive enterprise. Between ticket sales, merchandising, sponsorships and humongous TV rights deals, the NFL by itself is expected to bring in a cool $14 billion this season. And that, notably, is a lot less money than it wants to be making. NFL commissioner Roger Goodell’s stated goal is $25 billion in annual revenue in the next ten years.

College football, while not quite responsible for generating NFL-level excitement, is also pretty massive in its own right. Sports news franchise ESPN is paying the National Collegiate Athletic Association (NCAA) $7.3 billion over the next 12 years for the rights to air games.

Even high school football is a fairly impressive economic engine — and yes, we said high school. Lakewood, Ohio, sold the naming rights for its high school stadium for $320,000, which sounds pretty good until you realize that it should have probably hired the city manager from Noblesville, Indiana, to consult for it before striking the deal. That municipality managed to squeeze $575,000 out of a generous patron for high school football stadium naming rights.

And those rather impressive sums for high school football stadiums pale in comparison to the $8.5 million, 15-year deal the California Interscholastic Federation inked with the Time Warner Cable company to broadcast high school football playoff games. Yes, again, we said high school football.

Once one gets to the NFL game (prices range from $60 to $300 a ticket), though, one can also count on spending $40 to $100 per person on concessions. And, while tailgating is a somewhat cheaper option, the average NFL tailgate costs its host approximately $200 to put together.

But even thinking, dreaming and fantasizing about football is the stuff of which billions are made — an estimated $7 billion in annual revenue, to be exact.

The Wild World Of Pretending To Play Football

Most of us know a fantasy football player — that friend, co-worker or loved one who spends time each week perfecting his or her stable of “drafted” NFL players to compete against the teams of fellow fantasy football enthusiasts. What you might not know is that fantasy football is not only a chance to participate — sort of — in the annual NFL season. It is also a chance to take part in an industry worth $7 billion (yes, with a “B”) in annual revenue.

The platforms on which those “games” are played varies, but those playing for the love of the pretend game are most likely located on free sites like ESPN or Yahoo.

For hard-core enthusiasts, though — those who are willing to put their money where their fantasy teams are — they can be found on daily contest sites like Draft Kings and Fan Duel, platforms that offer a chance to win cash prizes, and some pretty serious cash prizes at that. Draft Kings alone is offering fantasy football players the chance to win up to $1 billion during this week’s match-ups.

(It’s probably worth noting at this time that the most successful fantasy players aren’t usually even sports fans. They’re data scientists and computer programmers, people who are good at writing algorithms for picking fantasy sports teams. How’s that for a bubble-buster?)

Fan Duel and Draft Kings make their money by charging players fees to participate in their cash-prize contests, typically 10 percent. Free sites mostly make money from advertising, though some like CBS Sports are moving into the “freemium” model. Consumers can play in the free league, but by paying $180 for an upgrade they gain access to more “customizable options” and the ability to put more teams into play.

So, you can make money playing football for real or even just thinking about playing football. You can also, as it turns out, make money by keeping football fans from going hungry. If you’re a grocer, that is.

The Unexpected Grocery Helper?

Most people know the Super Bowl — the biggest NFL football game of the year — is a major boon for snack sales, second only to Thanksgiving for snacking-centric holidays.

What people might not know is that football season also boosts grocery sales. In fact, football has such a notable effect on groceries during its 22-week annual run that this year grocers nationwide have their own fantasy about football: that sales start to reverse a multiple-month downward slide. The price of chicken, for example, is quite affected by football season. Football season drives up the price of chicken wings, which, in turn, drives up the average price of all chicken.

The effects on beef are expected to be somewhat less dramatic, yet those who look at such statistics believe the typical uptick in burger and chili preparations that accompany football season will help to counteract some of the sharp decreases they’ve seen in ground beef sales over the last year.

So, when you are gearing up for kick-off this week, take a moment to appreciate what a key utility player football is for the commerce ecosystem. It’s not the quarterback (that would be Christmas), but it has a role to play and it plays it reliably well — and in increasingly creative ways. Take that moment, then get back to enjoying those wings.

And go Pats — it can only get better from here.

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