Why do NFL teams rank so highly in value when soccer teams have many more fans and viewers?

The Cowboys, for instance, are the world’s most valuable sports franchise - despite having perhaps only 8% as many fans as a team like Real Madrid or Barcelona would have. Outside of the United States, relatively few people could name who/what the Cowboys, Steelers, or Patriots are. NFL seasons also have fewer games, and fewer viewers, than many soccer leagues. Yet many NFL teams rank very highly in value among the world’s Top-50 richest sports teams.

Is it merely purchasing power parity, that things cost more in America?

The NFL makes more money than La Liga. A LOT more. 1/32 of the NFL’s revenue is worth more than 1/20 of La Liga. That’s all there is to it. Real Madrid and Barcelona also play games in other championship affairs but it comes nowhere near making up for the size of the league; La Liga might make 3 billion euros a year, while the NFL makes about five to six times that.

However many fans we say Real Madrid has, and what constitutes a fan is debatable, you can only get so many of them into a stadium and you can only get so many watching TV. Furthermore, they are invariably dependent on, of course, the other teams in the league. That affects TV revenue. The Cowboys are equal partners in the TV contract for a league in a country of 325 million people (in a sport that is basically conducted specifically to BE a TV show) while Real Madrid and Barcelona are partners in a league in a country of about 48 million people. There is just no way in hell such a league can be anywhere close to the NFL in sheer economic value. The NFL is the richest professional sports league that has ever existed - followed by two other North American leagues, MLB and the NBA.

You could of course argue that European football is a giant interconnected “league” but that would also mean there’s a hell of a lot of teams splitting the dough.

I am not sure how much the number of fans and viewers plays into it. I am a 49er fan and watch the games on TV for free each week and rarely/never purchase anything with their logo. I think advertising and mechandising may have more to do with the value of the NFL teams. Plus, the NFL media machine keeps the teams and star players in the news even in the offseason, to ensure year-round consciousness and drama about what’s going on in each team’s market. Do major soccer teams have as much advertising and mechandising?

That’s probably the biggest part. One of the major complaints I hear from fans of soccer about watching NFL games is “Oh my god, there are so many commercials!” One guy on Facebook brags about “No Commercials!” before every game he watches.

If you don’t air any ads, or even just a lot fewer ads, your revenue goes down. Pretty easy math there.

ETA: And this is a factor even in Canadian Football, which is very similar to the NFL. Our TV revenue is far lower than in the US, and so our teams have far less money to work with. Our star quarterbacks usually make less than $1 million a year, and most players far lower than that.

Do the CFL players from the US get better pay than the Canadians?

It really depends on the player. There’s a built in advantage for Canadian players because of league rules, but US players are often more talented. But most quarterbacks are American, so they’d drive up the average, since they’re the highest paid players.

I think you could concoct some kind of algorithm, based on the size of the television market and the number of billionaires in the nation, eager to bid for a prestige product of limited availability, that would answer the OP’s question. And, the most valuable soccer teams; Real Madrid, Barcelona and Bayern Munich are owned by the club members, so the same market pressures don’t exist.

This is the entire reason. The estimated value of sports franchises isn’t really based on how many people claim to be fans, or love those teams; it is entirely a function of how much revenue the teams generate, and television deals provide the lion’s share of that.

Replying again with a real-world example. My local team the Ottawa RedBlacks just re-signed Lorenzo Mauldin IV:

So, the 30-year-old defensive end, who was named the CFL’s Most Outstanding Defensive Player last season, has agreed to a one-year deal to return to the Redblacks for the 2023 season. It’s a sizeable pay increase for Mauldin, who will more than double his earnings from a year ago when he was paid a base salary of $65,500 and got bonuses/housing allowance that brought him up to nearly $95,000. He will be one of the CFL’s top-paid defensive ends.

This guy had a record-breaking season last year, got a lot of recognition as seen above, and might be making about $200,000 this year.

For comparison, the league minimum salary in the NFL this year:

Rookies from the incoming 2022 NFL Draft class will make a minimum $705,000 this year. This marks a $45,000 increase from last year, a trend the league agreed to continue through 2030 when the minimum rookie contract value will reach $1,065,000.

It’s because the NFL is in the United States, the richest country in the world.

I also wonder a bit at some of the valuations. The Forbes 2022 list, for example, lists Chelsea FC in London as being “worth” $3.1 billion But of course they were literally just sold last year to the American Todd Boehly and his Clearlake Capital group (who also own part of the LA Dodgers) for over $5 billion.

So unless you believe Chelsea has lost $2b in value in under a year that $3.1b number is off. And if it’s really more like $5b that would put them near the top 10.

These numbers are all very vague since teams are very rarely sold (Chelsea being one of the most recent ones). The Phoenix Suns of the NBA just sold for $4b last year, and I don’t even see them on the latest Forbes list at all.

I wouldn’t be surprised if the “closed shop franchise” model in the USA has something to do with it.

Sure Chelsea may be near the top now and worth billions, but they are only a bad season away from being relegated and cut off from the main prizes. That isn’t the case for the NFL.

And, at least in the NFL, 31 out of the 32 teams are privately owned, and their financial books aren’t a matter of public knowledge. The Packers, being a publicly-held corporation*, do publish financial reports, and analysts who study the financial workings of NFL teams use the Packers’ numbers as a point of reference for estimating the financial performance of the league as a whole.

*- The NFL’s ownership rules prevent a team from adopting such an ownership model today; the league wants each team to have a relatively small ownership group, with one majority owner. The Packers have been a public corporation since the 1920s, and their structure was grandfathered in when the league changed their rules regarding franchise ownership.

Which is, of course, why the American owners in the PL were the biggest movers behind the mooted creation of a European Super League, a closed-shop league of the biggest teams with no more pesky relegation or the need to share revenues with minnows like Brighton or Bournemouth.

If you want to look at something as simple as game-day revenue, the latest report from Deloitte had Arsenal (the #10 team I revenue in soccer) as generating right around $100M in 2022. It’s harder to find recent numbers, and COVID messed stuff up, but this article from 2020 says that the #10 team in the NFL (the Packers) generated $174M in stadium revenue (over many fewer games). Even the lowest-ranked NFL teams generate as much revenue from their stadiums as the 10th highest-producing team in world soccer. And that’s without getting into TV rights and merchandise.

NFL teams just generate a lot more revenue than everything other than the biggest of soccer teams (Bayern, Barca, Real Madrid, and maybe ManU and PSG).

ETA: Those NFL numbers were from 2018. It’s only higher (and probably much higher) now.

NFL makes a ton of money from cable suppliers too.

The NFL alone collects nearly $7.5 billion a year from media companies, including nearly $1.9 billion a year from Walt Disney Co.’s ESPN for “Monday Night Football” and other football extras. The NFL reaps $1.5 billion a year from DirecTV for its Sunday Ticket package and roughly $3.7 billion a year from NBC, CBS and Fox.

Note that the article is 6 years old. Since then, NFL has even been creeping into the streaming platforms by putting Thursday Night Football on Amazon Prime. Back then the article said, “Retail giant Amazon.com, which operates the Prime Video streaming service, is on the hunt for rights from channels and niche sporting leagues in an effort to create a sports channel package that it could sell.” We now know what happened with that. I assume that revenue is much larger now than what that article states it is.

It’s all intertwined. The advertising is completely based on how many and which eyes are seeing the ads. That’s a LOT bigger for the NFL than for any particular European soccer league.

The only comparable situation would be if European soccer had only 90-ish teams, and was televised throughout the EU. That would be more or less equivalent to having the 92 NFL, NBA, and MLB teams in the US.

Instead, you’ve got something far more granular- UEFA has 55 member leagues, each of which has 15-20 teams in their top league. And not all of those are really top-flight teams either.

The only thing comparable would be the UEFA Champions League, if it was the ONLY soccer level that was televised.

Definitely not the only reason, or even the major one. See below.

It’s interesting that football in Canada has such a dramatically lower status than in the US. The NHL, for example, is not known for spectacular salaries compared to other major league sports, but the highest-paid Canadian hockey player currently earns USD $12.5 million. The Toronto Maple Leafs’ young superstar Auston Matthews makes over USD $11.6 million.

Well, we play with a different set of rules, that makes introducing Canadian teams into the NFL a problem. With the NHL, this isn’t an issue, so even though we don’t have very many NHL teams these days, they still benefit financially from being part of a much larger all-North American market.

The CFL has to support everything with a much smaller league, only 9 teams, and much smaller attendance. Most CFL stadia only seat about 20-25 thousand people, and some teams (Like Toronto) rarely even come close to selling out that capacity.

(This is referencing the claim that the primary reason the NFL is so valuable being that it is in America)

I’m not sure why you would say that. In terms of revenue, these are the largest sporting leagues in the world:

#1 NFL
#2 MLB
#3 NBA
#4 English Premier League
#5 NHL

There is one thing 4 out of those 5 have in common and it’s not how popular the sport is world-wide. Being even a semi-successful league in the US is much more valuable than being a very popular league in a poorer country. I am quite sure more people watch/attend cricket matches in India,or soccer matches in China than soccer in the US, but MLS is worth more than those leagues are (MLS is #10 on that list, 2 spots higher than the Indian Premier League and 4 spots higher than the Chinese soccer league).

Despite being in the U.S., I’ve been a fan of the CFL since the early '80s, when ESPN would run CFL games.

My understanding is that part of the CFL’s issue is that football is the #2 spectator sport, behind hockey, in much of Canada, particularly in Ontario and Quebec (which, combined, are over 60% of the country’s population).

And, my understanding is that the league, as a whole, is not as financially stable as the NFL.

In the early '80s, some CFL teams (particularly Montreal) signed several top NFL players and draft picks, such as Billy “White Shoes” Johnson and Vince Ferragamo, to big contracts. The league now has a salary cap, and CFL teams no longer are able to try to sign top NFL players; CFL players who also have NFL experience now tend to be those who were journeyman players in the U.S., and go to Canada in hopes of continuing their careers and/or have a shot at starting.

You do have a point, but “richest country” has to be interpreted in terms of BOTH income and population. China and India have the population, but not the income. Canada has a per-capita GDP marginally lower than the US, but it doesn’t have the population to support major sports, as @Horatius correctly implies. It just struck me as odd that when you cross the border between two such similar countries, with such similar cultures and economies, football drops from being the richest sports franchise imaginable to being a pauper.