The NFL lost big in ticket sales this season, but corporate sponsorships blunted the blow

Key Points
  • The NFL says its partnership revenue, which brings in more than $1 billion, is in strong position as it gets set to finish its Covid pandemic year with Super Bowl LV in Tampa Bay, Florida.
  • New partners including Postmates, Subway and Hyperice joined the league's portfolio in 2020.
  • Marketing experts say the NFL could make even more revenue with on-field virtual signs but the league says its not considering those slots yet.
An aerial view of Raymond James Stadium ahead of Super Bowl LV on January 31, 2021 in Tampa, Florida.
Mike Ehrmann | Getty Images

With one game remaining, the National Football League isn't celebrating getting through a pandemic year.

Super Bowl LV in Tampa Bay, Florida, is scheduled for Sunday, and the league will officially wrap up its 2020 season. It's estimated the NFL lost out on up to $4 billion in revenue as the Covid-19 pandemic cut into ticket sales, but the league told CNBC its national partnerships, which bring in roughly $1 billion, weren't hurt.

In an interview with CNBC, NFL Chief Revenue Officer Renie Anderson confirmed the league added four new categories and renewed major companies like Visa to keep its blue-chip corporate sponsors total at 36. Companies including Postmates, Subway and Hyperice joined the league's portfolio, while North Carolina-based Truist Bank is now leasing the NFL's retail banking slot.

"It's an odd thing to say in a global pandemic," Anderson said. "But I feel good about our business."

Close-up of Postmates logo.
Smith Collection/Gado | Archive Photos | Getty Images

What do NFL ad partners get?

Partnership deals with the NFL usually run from three to seven years and cost a minimum of $10 million per year for smaller companies. More prominent firms could pay more than $200 million per year, and Verizon is projected as the NFL's top partner with a $300 million pact.

IEG, a partnership consulting and valuation firm, estimates the NFL made $1.62 billion in 2020, compared with $1.47 billion in the 2019 season. The firm also reported "increases in sponsorship revenue in the NFL have historically ranged from 4 percent to 6 percent."

For that kind of premium, companies get exposure to the NFL's large TV audience, and the ability to promote its 32 teams and use its league logo alongside their brands. Longtime marketing executive and Columbia University professor Tony Ponturo added that companies also like to use the Super Bowl icon for promotions around this time.

Last year's Super Bowl reached more than 100 million viewers, including online streaming. Although the NFL lost a chunk of viewership during the 2020 season as Covid-19 outbreaks forced some rescheduling, one of its contests (initially scheduled for Thanksgiving) still drew more than 10 million on a Wednesday afternoon.

With that kind of reach, brands are willing to spend top money to get in business with professional football.

"For a lot of marketers, that NFL shield is so prominent," Ponturo said. "Particularly now with the Super Bowl – to be able to use the Lombardi Trophy and the logo, those are all pretty important things."

But with the pandemic taking a toll on revenues, Ponturo added companies need to seek more for the price they are paying.

"Just to tag something that says you're the official (category partner) of the NFL will only go so far," he said.

Ponturo, who served as vice president of Anheuser-Busch global media sports and entertainment marketing for 17 years, said today's consumers "are smarter, they are more cynical, they are tougher to convince.

"So how marketers will continue using these assets in a creative, interesting way is going to be the challenge," Ponturo said.

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No rush to offer new assets like jersey decals

As the pandemic hammered sports leagues, suspending game day revenues, companies lost the ability to advertise on-site. That forced the NFL and its partners to get creative with technology, said Anderson.

For instance, Verizon announced its 5G SuperStadium that will allow users watching the game on Apple's iPhone 12 to access seven different camera angles, plus augmented reality options.

During the season, the NFL also let brands place messages on seat covers throughout team stadiums, but marketers weren't very interested in that asset, as it lacked TV exposure.  

For the Super Bowl, though, the empty sections around the lower bowl will include 23,000 square feet of LED screens on the seat covers, displaying interchangeable ads, messages and other exclusive content.

"What we've been able to do is take that technology so that the seat covers are now part of the overall experience of the game," said Tracie Rodburg, the NFL's senior vice president of sponsorship management.

Anderson said the NFL doesn't anticipate the LED seat covers to return next season -- it hopes fans will be able to come back. But she said the league would use more virtual assets for brands.

"The challenge for us is how we're going to mimic this asset or recreate something just as dynamic next year," Anderson said. "I think there is some opportunity there."

Partners have also inquired about signage opportunities on goalpost nets, similar to what insurance firm Allstate did with college football in 2005. On-field virtual signs and jersey patches are also intriguing possibilities.

Florida State Seminoles place kicker Ricky Aguayo (23) kicks the extra pointduring the college football game between the Florida State Seminoles and the North Carolina Wolfpack on November 3, 2018, at Carter-Finley Stadium in Raleigh, NC.
Michael Berg | Icon Sportswire | Getty Images

Tuck Burch, head of brand marketing at Excel Sports Management, said those assets could help brand awareness for newer companies, especially ones entering the public market. Excel representatives have negotiated league partnerships for FedEx, IBM and Procter & Gamble.

"There is a case to be made for companies going for an IPO that the awareness a jersey patch delivers is part of the marketing mix that you should consider," Burch said, using the National Basketball Association's jersey patch as an example. "The (NFL's) audience size will drive high-valuation for those types of assets," he added.

Sports gambling companies would likely welcome the on-field signage and jersey patch assets as they continue spending millions on marketing.

Anderson said the NFL isn't yet considering making those assets available, though.

"We believe we can provide that value in other areas before we go down that route," she added. "I don't think there is any rush to providing any on-field signage, uniform patches, or helmet decals in the next couple of years."

Instead, expect the NFL to increase behind-the-scenes experiences for companies to leverage. It can provide more access for fans at games and meet and greets now, including virtual assets like videoconferencing to enhance those experiences. 

"I think what we understand from our partners; they aren't interested in a sign," said Anderson. "It's more about the experience."

Added Ponturo, "You can only do it for so many people, but if consumers see you doing that, it's of real value."

An aerial view of Raymond James Stadium ahead of Super Bowl LV on January 31, 2021 in Tampa, Florida.
Mike Ehrmann | Getty Images

Not taking strong business for granted

Anderson said the NFL would hold meetings this week, speaking with existing and potential new partners about upcoming categories the league could explore.

The league typically likes to negotiate agreements 18 months before they expire. But Anderson added the NFL wouldn't get "complacent with the assets that we have."

"We know we have to do more," Anderson said. "We're going to make sure that we're thoughtful about the packaging that we build because it is something to have these rights."

Should new NFL partnership slots become available, Burch predicted they would go fast.

"I don't think there is any lack of desire for a partnership with the NFL on the marketplace," Burch said. "It's a highly sought-after property and a strategic organization with how they put partnerships together. And it's an immense value that is delivered."

With an extra game likely added to its regular season, expanded playoffs already locked in and 10 more years of labor peace, the NFL is bullish on its partnership revenue. New media rights money from networks is also in sight.  

"Although business has been challenging for a lot of companies this year, from a league level, we feel very strongly about our position," Anderson said. "Business is strong right now for the NFL. And we will never take that for granted."

Big brands punt Super Bowl ads while new names like Chipotle, Huggies come aboard
Big brands punt Super Bowl ads while new names like Chipotle, Huggies come aboard