Ravens join NFL that crosses goal line of profits, popularity League reigns supreme as marketing machine

THE BALTIMORE SUN

Its championship game is watched by more people than live in Africa. Americans invariably name it as their favorite sport. And if you can find a franchise to buy, it will cost you twice what the Pentagon pays for the latest stealth fighter jet.

The National Football League that returns to Baltimore tomorrow is the undisputed champion of spectator sports. By almost any measurement, from TV ratings to T-shirt sales, it reigns supreme.

Purists will note that baseball, with many more games per season, sells three times as many tickets. Soccer aficionados can claim more fans worldwide, but no single soccer league enjoys the proceeds. And pragmatists will point out, correctly, that the NFL could be headed down a path of self-destruction if current trends worsen.

But when the Baltimore Ravens take the field at Memorial Stadium, they will become a part of a high-octane, TV-fueled marketing machine that is the envy of sports leagues around the world.

Consider:

When pollsters ask Americans to name their favorite spectator sport, the NFL is so dominant that, if it were a presidential race, baseball, hockey and basketball would barely make it through the primaries.

On any given Sunday, Anheuser-Busch Inc., the world's largest brewer, can count on reaching one of every 10 young American men -- its primary customers -- through ads on NFL broadcasts. No other sport comes even close.

Financial World magazine, in its annual calculation of the finances of sports teams, estimates that the 30 NFL franchises ++ are collectively worth $5.2 billion, fully 50 percent more than the second most valuable league, the NBA's 27 teams. An NFL team holds the record sale price: $192 million for the pitiful Tampa Bay Buccaneers, with relocation penalties.

When the ESPN Chilton Sports Poll last July asked 1,500 Americans to name their favorite spectator sport, 23 percent said "NFL." That's almost twice the response No. 2, baseball, got. It's been that way for years.

"The NFL, across the board, is everyone's favorite sport. They always have the most fans," said Jenna Tourdot, assistant marketing director for the poll, which is owned by the ESPN cable network.

Other polls show the same thing. When asked to name their favorite athletes, respondents picked six NFL players out of the top 12, twice as many as the second-biggest vote getter, the NBA. The Chicago Bulls currently top the rankings of favorite teams, but most of the other top slots go to football franchises.

Not as big overseas

Worldwide, about the only thing that rivals the NFL as a spectacle is the World Cup of soccer, a tournament played every four years. An estimated 2 billion people saw at least part of the 1994 title game, according to U.S. Soccer.

But soccer is a game, not a league. The World Cup is organized by the Federation Internationale de Football Association, or FIFA, but the contending teams come from scores of individual leagues around the world. None rival the NFL for size or profit.

Likewise, basketball and the NBA are well ahead of the NFL in international appeal. Overseas retail sales of NBA merchandise was $400 million last year, and a thriving network of leagues are boosting the sport's popularity abroad.

"Globally the NBA is clearly the leader. They have made tremendous inroads in Europe and even Asia," said Susan Hofacre, head of the sports administration program at Pittsburgh's Robert Morris College.

Baseball as a sport also has done better overseas than American-style football, which is almost exclusively played here. Japan has a thriving baseball league, and the sport is popular throughout the Pacific Rim and in Latin America.

But in the biggest sports market of all, the United States, football is king.

"They've got a tremendous product and over the years it's been well-executed," said Paul Much, senior managing director of Houlihan, Lokey Howard & Zukin, a Chicago-based consultant to a number of sports teams.

Much attributes the success to a cooperative league structure that has maintained a reasonable balance between teams in terms of both wins and losses, and profits and losses.

Specifically, NFL teams generously share with each other their take from tickets, TV and merchandise sales. In all, 90 percent of their collective revenues are pooled and shared. The $1 billion a year the networks pay to broadcast the games, for example, will be cut up into $40 million slices for each non-expansion team this year, roughly covering the player payroll.

"In the past, whatever was good for the league was good for the teams," Much said.

Clouds on the horizon

That all-for-one and one-for-all mind-set is under attack. Jerry Jones, the owner of the Dallas Cowboys, has struck his own sponsorship deals in defiance of league rules, suggested merchandise sales should no longer be shared equally, and sued his fellow franchise owners for trying to enforce league-wide business arrangements.

The growing importance of luxury boxes, concessions and other revenues derived from stadiums also has upset the financial equilibrium. Franchises do not share this money, meaning a team like the Ravens will have a big advantage when it moves into its new downtown stadium in two years.

"It's become a league of haves and have-nots," Much said.

This also has spawned a spate of relocations, some sanctioned, some not. As a result the league is now or will soon be unrepresented in a number of major markets, such as Los Angeles and Houston. The television networks are bound to be concerned about this, Much said.

Player salaries, too, are on their way up even though they still lag the other pro sports leagues. There is a salary cap in place that should, over time, insulate the teams from financial stress. But individual teams have found ways to circumvent the cap, raising questions about its ability to prevent a baseball-style salary spiral.

And, as any Clevelander can tell you, the league has not done much for its image in recent years with the wholesale migration of franchises and resultant trampling of fans. Not to mention the ill-will engendered in Baltimore and the other losing cities during expansion.

'Tremendous' promoters

An increasingly loud chorus of critics is suggesting the league has lost its soul and the fan-orientation that made it great. The NBA has been growing faster in popularity and is considered a better marketer.

But basketball has some catching up to do. Financial World estimates the NFL's teams generate $2 billion a year in revenues, far eclipsing the $1.4 billion the magazine figures the 27 NBA and 28 Major League Baseball teams earn, and nearly three times the 26 NHL franchises, $728 million.

"They've done a tremendous job promoting their product," Much said of the NFL.

The NFL's success is due to a simple game plan, masterfully executed: It has cultivated a supremely enthusiastic following and kept it stocked with fresh, young fans. These it delivers to sponsors weekly in slickly packaged broadcasts that enrich the league, the sponsors and the television networks in a multibillion-dollar triad.

"It's the top of the notch. It's a quality product, its ratings continue to do well, attendance is holding up. . . . It's a great game and has great grass-roots appeal," said Tony Ponturo, vice president of corporate media for Anheuser-Busch, one of the biggest sponsors of sports in the world.

Nielsen Media Research estimates that an average minute of an average NFL network broadcast is seen in about 12 million homes, or about a third of the households with TV sets on. That's more than twice the network ratings of the NBA and baseball.

And that's just a regular-season game. The Super Bowl occupies seven of the top 10 slots on the most-watched TV broadcasts of all time. An estimated 138 million Americans -- half the country -- saw at least part of last season's championship Cowboys-Pittsburgh Steelers game, according to "people meter" surveys of people aged 2 and up conducted by Neilsen.

Two-thirds, or 61 million American households that had TV sets turned on were tuned to the game.

Even Jordan can't compete

That dwarfs the other U.S. leagues. Michael Jordan's performance in last season's final game of the NBA championship was seen by the biggest audience in that sport's history, an estimated 29.9 million people. The final game of the Atlanta-Cleveland World Series did slightly better than that, 30.3 million. The NHL's Stanley Cup wasn't even in the same league: 4.9 million.

Worldwide, the NFL estimates 800 million people in 187 countries saw at least part of the Super Bowl.

Fantastic for advertisers

And the type of viewers watching is just what Madison Avenue wants. The NFL is the strongest of all sports with men aged 21 to 34 years. That's the chief target for brewers and an important one for automakers and other consumer-product makers hoping to nurture loyalty in customers early in their lives.

It's not cheap. Advertisers pay from $130,000 to $400,000 a minute during the regular season to peddle their wares. A Super Bowl half-minute is more than $1 million.

But Ponturo said the cost is worth it: He estimates that routine NFL broadcasts reach 10 percent of 21- to 34-year-old males on an average Sunday, and 15 percent on Monday night games.

"As you look at baseball and even the NBA, those numbers are easily half of that. It really has that dominance over other sports," Ponturo said.

Pub Date: 8/31/96

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