Nfl 2010 Expansion Strategy

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The NFL’s goal, stated in 2010, is to reach $25 billion in revenue by 2027. The fiscal 2013 year saw the NFL have approximately $9.5 billion dollars in revenue. This is up from an estimated $8.5 billion at the time of the statement. On this pace of roughly $330 million a year, the NFL would reach its goal by 2060, 33 years later than the desired date. Clearly, it is not acceptable to have revenue growth that does not allow the league to come close to its target, so there is a growth strategy that will allow it to reach that goal. One unmistakable aspect of that strategy is expansion. So the question isn’t should the NFL expand, that answer is fairly obvious, the true questions for the league are where should it expand and how many should the…show more content…
My proposal would require six teams in six divisions in two conferences; table 1 shows the difference between the divisions now and my proposal. The most obvious concern of expanding the league is competitive balance, with the argument being that more teams dilutes the competition and causes a perpetual gap between the best and the worst. However, from 1995 to 2002 three teams (Carolina Panthers, Jacksonville Jaguars, and Houston Texans) were added to the league, and in that time the Gini Coefficient for the NFL (see table 2) increased the year after the additions but eventually began to stabilize. In reality, competitive balance does not matter as long as the league is making money, and that has been the case as competitive balance has slightly decreased since 1995. Adding teams also allows the league to have more games on TV (increasing revenue) without adding more games to the schedule (keeping the players happy). The next addition would be an expanded playoff to 16 teams, once again increasing revenue. Finally, adding new teams requires a fee that is paid to the league. I would recommend setting this value at $1.5 billion for Los Angeles and $1.25 billion for Toronto and Las Vegas. This would allow the existing 32 owners to pocket $171.875 million, adding to the value of the team and allowing the owners the chance to reinvest the money back into the

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