If you didn’t already know it, America’s favorite sport also has a significant impact on the economy. In a fashion similar to the Olympics, U.S. cities vie each year to host the Super Bowl, as it has an enormous impact on the local economy that hosts it. Emory Goizueta Business School professor Michael Smith estimates that the local Atlanta economic benefit will be somewhere around $50 million from this year’s event.
Football has taken on identity politics, as has much of the country, where it now addresses broader social issues like domestic violence and medical advancement through advancing concussion protocol. However, the parallel we can draw from the National Football League is not to the culture wars, but to the American economy.
The NFL is a massive financial enterprise. Revenues from ticket sales, merchandising, sponsorships and vast TV rights deals, are expected to bring in some $14 billion this season, with Commissioner Roger Goodell’s stated goal of $25 billion in annual revenue in the next ten years. The spin-off of legal wagering revenue from football is also colossal. Fantasy football, a competition in which participants select imaginary teams from among the players in the NFL and score points according to the actual performance of their players, has ballooned into a $7 billion industry. College football and even high school football have gotten into the act, but not nearly to the extent of professional football.
Spring professional football has been attempted in the past, but if you look at the new Alliance of American Football League (AAF), they have put together a business plan that in my opinion will have traction. To begin, the AAF has not only the blessings, but the backing of the NFL. In essence, the league will act as a minor league for potential NFL talent. The games are televised on CBS, with announcers you will know, giving you the look and feel of the NFL, which really hasn’t been done before. In addition, coaches all have NFL resumes, including household names like Steve Spurrier, as well as players you will recognize from college and the pros.
As so quoted in the football film “Jerry McGuire,” the infamous phrase, “Show me the Money,” is apropos to the AAF. Fans drive consumption, and consumption is two-thirds of GDP. The AAF gets this. Gambling is huge and legalized through fantasy football delivers big. Fans will be able to stream Alliance matchups live via the free Alliance app while accessing integrated fantasy options with real rewards, both for themselves and the players they are cheering on.
One would imagine that predecessors like the World Football League and the XFL also had visions of financial grandeur. The timing was off and the economy was not right for them. It appears that the only real question now is where are the fans, the ultimate consumer, going to spend their spring dollars? Will it affect “America’s Pastime,” major league baseball, and share in the wealth, or will the AAF have a deleterious effect in this regard. No one can say for sure, but what is certain is that Americans have an appetite for professional football and gambling, which is right in the wheelhouse of the NFL and new AAF, and also a shot in the arm for our aggregate economy.