In a recent paper published in the International Journal of Sport Finance, Michael Leeds, Peter von Allmen, and I look at the statistical link between a team’s wins and its total revenue in the NFL, National Basketball Association, and Major League Baseball. With respect to baseball we found that a 10 percent increase in regular season wins for an average team would lead to a 2.7 percent increase in revenue. The same result was uncovered for the NBA. In both of these leagues the national television revenue is shared, but other revenue streams, such as local media, gate revenue, and sponsorship revenue are—relative to what we see in the NFL—not shared as much.
In the NFL, by contrast, a 10 percent increase in regular season wins for an average team only leads to a 0.14 percent increase in revenue. Because the NFL has embraced much more sharing, the financial incentive to win is muted. The impact of wins in the NFL is only a small fraction of what you see in the other two major North American sports…
An examination of the link between revenue and wins in the NFL reveals that each additional victory is worth about $412,000 to an NFL team. That’s right: A win in the NFL is actually worth less, in real terms, than a win in baseball more than 40 years ago.
