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NFL Playoffs Generate No Financial Windfall for Individual Teams

Kurt Badenhausen
·5 min read
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Stadiums will be packed, and the TV audiences will be massive as the NFL playoffs kick off this weekend, but for the teams in the Super Bowl hunt, the playoffs offer little financial upside this season.

The NFL’s economic model spreads the wealth. Its massive media contracts, along with a large chunk of gate receipts, are divided equally among the 32 teams. The playoffs are no different. The league collects almost all ticket revenue from playoff games and simply provides a stipend for home and away teams that cover costs for travel and stadium operations. Home teams keep their share of concession and parking revenue, which typically ranges from $1 million to $2 million combined, per game, but it is a rounding error for teams who can expect a check next season from the NFL for shared revenue of roughly $400 million. A Super Bowl run boosts merchandise sales for teams, but much of that revenue is shared equally, as well.

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Meanwhile, playoff expenses can add up. Qualifying for the Super Bowl is rare for most teams, with New England the obvious outlier, so ownership often blows past its allotted travel stipend to bring employees to the Big Game. When you also factor in coach and player playoff incentives—the Bucs owed Tom Brady $2.25 million for his Super Bowl win last year—teams can end up with a financial loss during the playoffs.

“The centralized revenue sharing gives NFL teams less control over playoff dollars than their counterparts in other leagues,” said Sean Clemens, director of sports investment banking at Park Lane. “But it’s the same system and revenue base that see them ending with the highest profit margins in sports, so you don’t see owners complaining.”

The NFL playoff revenue allocation runs in sharp contrast to the NBA and NHL. The NBA started keeping only 25% of playoff ticket revenue in 2016, down from 45% previously. NHL teams kick back 35% of gate receipts for each home playoff game and keep the rest, although the provision was waived for the COVID-19-impacted 2020-21 season.

Playoff ticket demand is often sky high, and NBA and NHL teams take advantage with price increases that can lead to finals tickets priced 200% above their regular season cost. During their five straight trips to the NBA Finals starting in 2015, the Warriors regularly netted more than $50 million from the playoffs, after the NBA took its cut.

Baseball teams are only able to cash in during the postseason through a long playoff series, ideally in the final two rounds when prices are their highest. Teams must contribute 60% of ticket revenue from the first three games of the division series and first four games of the championship series and World Series. This funds the postseason player pool that hit $90 million during 2021, with each share for the Braves worth $397,391 after their World Series title.

Like their employers, NFL players are often competing for a fraction of their weekly pay during the playoffs. Players are paid their base salary on a weekly basis during the 18 weeks of the NFL season. That means $1.5 million a week for Aaron Rodgers, who heads to the playoffs quarterbacking the NFC’s top-seeded Packers. Players will earn $37,500-$42,500 a week during the first two weeks of the playoffs, per the collective bargaining agreement. It is a tick above the weekly pay of the NFL’s minimum salary of $660,000. It moves up to $65,000 for the conference championship games, while the Super Bowl is worth $150,000 for each player on the winning team and $75,000 for those who came up short. The player bonus pool is funded by playoff gate receipts.

The NFL playoffs are not particularly lucrative for participating teams or players, but every NFL team and player ultimately benefits from the playoffs, as their blockbuster TV ratings are part of the equation that last year enticed media companies to commit $113 billion to broadcast games over the next 11 years—half of which funnels to the players under the CBA. Eleven NFL playoff games ranked among the 20 most watched U.S. TV broadcasts in 2021, while the other two postseason contests ranked in the 30s. The Super Bowl led the way with 91.6 million viewers, followed by the championship games in the NFC (44.8 million) and AFC (42.3 million).

The financial upside from a Super Bowl title in the current season is limited, but the future benefits can be significant by raising demand and pricing power on tickets, suites and sponsorships. “We’ve used such numbers as 50% going forward,” said Stephen Jones, Dallas Cowboys COO, at Sportico’s NFL Valuations event in September, with the caveat he’d prefer the team’s first Super Bowl in 26 years over more income. “I think it has such an effect when you win a championship. We saw it when we first bought the team, how people get even more excited. They pull dalltheir Cowboys jerseys out of their drawers; they were closet Cowboys fans because we weren’t winning, and then you win and here they come.

“At the end of the day, there is no question winning championships, certainly, I think, affect your revenue and your long-term,” he said, “in terms of people being willing to commit and be a partner with the Cowboys going forward.”