How Major Leagues Generate Revenue

Have you ever wondered how these professional sports leagues stay afloat financially? Throughout the history of sports, every major international and domestic league needs to make money for it to survive, so there’s a very complicated process that goes into generating revenue.

In this article, we explain how the top major leagues generate revenue, and we’ll break down the components that make up the entirety of the revenue earned from each particular sports league. Most of what we’ll mention includes team sponsors, ticket sales and national revenue, although there’s even more that goes into it, which we’ll explain as best we can.

Revenue Breakdown of Major Sports Leagues

Revenue from local media, concessions, parking, etc.

How could we start talking about the way sports leagues generate revenue without first covering the amount each league makes from a combination of parking revenue, concessions and local media that covers nearby events? Essentially these are the fundamental “inevitable” expenses that every league anywhere in the world must include to have a working stadium and professional sports environment.

When it comes to the five major American leagues of the NFL, the NBA, the MLB, the NHL and the MLS, each makes 7%, 21%, 33%, 24% and 18% of their total revenue from concessions and parking respectively. In turn, these percentages are much larger than they might seem, as the NFL is undoubtedly the highest-grossing revenue league in the world and only has 7% of its revenue made up from concessions and parking. Either way, selling tickets leads to the need for parking spaces, food and drink, so it’s a way to cover additional costs.

Revenue from ticket sales and seating

If we think about the structure of these leagues, we know that a game takes place between two separate teams at the stadium of the home team. Technically, you could watch from your home television and not have to pay a single dime for a ticket and still have a similar viewing experience, although this would be the main method leagues make their money through national revenue and television deals. Even so, stadiums for particular games no matter the league tend to sell out to some degree, causing ticket sales and seating to be one way these major leagues generate revenue.

For the NFL, the NBA, the MLB, the NHL and the MLS, seating, suites, and ticket sales account for 17%, 26%, 31%, 44%, and 39% respectively in revenue earned, with the NHL and MLS massively ahead of other leagues, most likely because their national revenues from TV views are overall lower. This can easily be the case, as the NFL generates just 17% of its revenue from seating, but it’s still the highest revenue-generating league, and for good reason which we’ll get into.

National revenue 

Of course, the main way these major sports leagues generate their revenue is through television contracts, viewership and merchandising, accounting for what is referred to as total ‘national revenue’. This is one of the most important components for a professional league to generate its revenue, as this revenue is always shared equally among the participating teams. You can essentially think of the national revenue as the largest chunk of income for the league that pays the players and coaches salaries.

Overall, the NFL generates 66% of its entire revenue from national revenue alone, compared to the NBA’s 41%, the MLB’s 26% (the MLB makes more off seating and tickets than national revenue), the NHL’s 19% (the NHL makes more off seating and tickets than national revenue) and the MLS’s measly 13% (the MLS makes more off seating and tickets than national revenue). All in all, you can look at these percentages associated with each league for national revenue to get a good idea of which major American sports leagues get the most TV viewership. As a result, the high TV viewing numbers allow the major leagues to generate most of their revenue to this day.