With or without integrity fees, the NFL is going to be more than $2 billion richer this year, according to projections.
Earlier this month, the American Gaming Association (AGA), in conjunction with Nielsen Sports, published a press release stating that, if all goes as projected, the NFL could earn $2.326 billion from legal sports betting in the US.
“According to Nielsen Sports, greater fan engagement and viewership could boost the NFL’s total annual revenue from media rights, sponsorships, merchandise and ticket sales by 13.4 percent, producing $1.75 billion in new revenue from increased consumption of the league’s products,” the release noted.
Where legal sports betting and NFL collide
The Nielsen study indicates that the NFL’s massive increase in revenue is due to a pair of factors: increased fan engagement and gaming-related revenue.
Nielsen’s study explained the increase in revenue from fan engagement as revenue the NFL earns “as a result of increased consumption and engagement with the league and its content/products.”
According to Nielsen, the projected revenue increased fan engagement brings will total $1.753 billion.
The other $573 million will come from the following sources, Nielsen noted:
- Sponsorship deals
- Advertising
- Product fees
These revenue numbers are based on the assumption that legal sports betting will attract a sizable influx of people who do not bet but plan to adopt the habits of a casual bettor, the study said.
Deep dive into the AGA survey numbers
The Nielsen report provided second-level data about where the two classes of sports-betting-related revenue will come from.
On the fan engagement side, Nielsen said that the NFL will experience a 13.4 percent increase in revenue. The majority of that increase will come from media rights (17.9 percent) and sponsorships (7.9 percent).
Ticket sales are expected to go up 6.5 percent and merchandise sales are projected to rise 2.1 percent.
The gaming-related side of the NFL’s projected revenue increase will come from sports betting companies who pay for advertising ($451 million), sponsorships ($92 million), and “data-product revenue” ($30 million).
An AGA representative who spoke with NJGamblingSites said that “data-product revenue” refers to, “third-party data providers like Sportradar and Genius Sports, who pay the leagues to be their official data providers.”
The report does not state if the ad revenue is new revenue on top of existing revenue, or if the gambling companies buying revenue are replacing existing contracts.
What about NJ sports betting and integrity fees?
Back in June, one of the trending topics of discussion about sports betting in New Jersey was whether or not state-level leaders would agree to sports betting legislation that included a mandatory payment to the leagues based on the revenue sportsbooks earned.
The MLB, NBA, and PGA met stern opposition from Assemblyman Ralph Caputo of the Tourism, Gaming and the Arts Committee.
While the NFL did not send a representative to discuss the matter with the committee, Caputo surely had them in mind when he railed against the pro sports leagues asking for integrity fees. All the vitriol stemmed from the leagues’ previous lawsuits preventing NJ sports betting from becoming a reality for eight years.
“Why do you think you’re entitled to an integrity fee,” Caputo asked an MLB rep during the discussion. “Give me a reason why the state of New Jersey who … your organization fought for eight years or so and tried to kill us from doing something that we had a constitutional right to do — which the US Supreme Court says we’re right — tell me why you’re entitled to an integrity fee? What gives you the right to ask for an integrity fee other than your desire to get additional revenue?”
Considering the NFL is projected to earn more than $2 billion without integrity fees, the chances of them successfully petitioning for fees in any state seems slim.