The United States Sports Economy: Leagues, College Sport and the Franchise Model

The United States sports economy is not simply bigger than everyone else’s; it is organised differently. Four major leagues with no relegation, a college system that functions as a second professional tier, publicly subsidised stadiums and a television market that pays for scarcity have produced a franchise model that private equity, sovereign funds and foreign leagues now try to copy. This article is part of the Sports Economy hub and complements our country study of the United Kingdom and the Premier League as a national export, as well as the comparison of closed and open league models.

How is the United States sports economy structured?

The US sports economy rests on four closed professional leagues (NFL, MLB, NBA, NHL), a college system run by universities and conferences, a vast youth and participation market, and a betting, media and merchandise layer that monetises all of it. Nothing is promoted or relegated; membership is sold.

The simplest way to understand the American model is to look at who can join. A European football league is an open competition: perform well and you rise, perform badly and you drop. An American league is a members’ club. The NFL has had 32 franchises since 2002, the NBA has 30, MLB 30 and the NHL 32 since Seattle joined in 2021. New members pay an expansion fee that is shared among the existing owners, which is why the last NHL entrant paid $650m and why NBA expansion to Las Vegas or Seattle has been discussed at prices above $5bn per team. Scarcity is designed in, not accidental.

Below the professional tier sits college sport, which in revenue terms is larger than most European football leagues. The Big Ten conference alone reported about $1.47bn of revenue for the 2024-25 fiscal year, and the SEC roughly $1.1bn, according to their federal tax filings reported in May 2026. Universities in those two conferences each received between roughly $72m and $92m. That tier exists nowhere else in the world and acts as a free talent academy, a regional television product and a philanthropic fundraising engine at the same time.

Around these two tiers the private sector has built the services layer: media companies that pay for rights, sportsbooks that pay leagues for data and marketing access, apparel firms that license logos, and a stadium construction industry in which the public sector is a routine co-investor. Our article on the size of the global sports industry puts North America at roughly a third of global sports revenue; the United States accounts for almost all of that.

Why is the franchise model so profitable?

Because the leagues control supply, share the biggest revenue pool equally and cap their largest cost. In the NFL, national television money is split 32 ways, 34% of gate receipts is pooled, and player pay is capped at a fixed share of revenue. The result is a league in which almost no franchise can lose money.

The clearest window into this machine is the Green Bay Packers, the only publicly owned NFL club and therefore the only one that publishes accounts. For the fiscal year ending March 2026 the Packers reported total revenue of $753m, up 4.7%, of which national revenue (the Packers’ equal share of league television, sponsorship and licensing income) was about $453m and local revenue (tickets, concessions, pro shop, local sponsors) was $299.8m. Sportico’s analysis of the same data put total NFL national revenue for the 2025 season at about $14.5bn, up roughly 5% on the year, with each of the 32 teams receiving more than $450m before the league’s own expenses. Ten years ago the figure per club was less than half that.

That national money is backed by the longest-dated contracts in sport. The NFL’s current agreements with ESPN, Fox, CBS, NBC, Amazon and YouTube run eleven years to 2033 and are worth roughly $125bn in total, with league opt-outs in 2029 that the commissioner’s office is already preparing to exercise so it can reprice the package. Sportico projects the national payout per team will exceed $800m a year by 2035 on the existing deals alone. A team can therefore budget a decade ahead with a certainty no European club enjoys.

The cost side is just as controlled. The 2025 NFL salary cap was $279m per club, plus more than $70m in player benefits, and the cap is reset each year as a negotiated percentage of league revenue. Since revenue is shared and payroll is capped, a club’s operating margin is largely a function of how well it sells its stadium. The Packers, in a city of 107,000 people, still reported an operating loss of just $1.1m in FY2026 because of rising player costs, while booking a one-off $133.6m of non-operating income from the league’s sale of NFL Network to ESPN. In other words, even a bad operating year in Green Bay is nearly break-even, and the league periodically hands its members windfalls from asset sales.

What are US sports franchises worth in 2025-26?

A great deal. Sportico’s August 2026 valuation of the 2025 season puts the 32 NFL franchises at a combined $299bn, an average of roughly $9.3bn, with the Dallas Cowboys at $15.5bn. Forbes’ separate 2025 estimate averaged $9.5bn. Values rose about 31% in a single year and 141% over five.

The driver is not profit but the price of entry. The Seattle Seahawks sale to a group led by the Khosla family, ratified unanimously by owners in August 2026, set an NFL record at $9.612bn, with Sixth Street holding about 3% and Carlyle and Dynasty Equity together about 3%. In 2025 Sportico ranked the Los Angeles Rams at $12.7bn, the New York Giants at $12bn, the New England Patriots at $10.4bn and the New York Jets at $10.35bn. Even the club ranked 32nd, the Cincinnati Bengals, is a multi-billion-dollar asset in a market of 2.3 million people, because the national revenue share is identical to Dallas’s.

The same logic now applies across the other leagues. MLB told its owners that 2024 revenue reached a record $12.1bn, up from $11.6bn the year before, on attendance above 71 million, the highest since 2017. NBA franchise values jumped after the league signed its new media deals; the Boston Celtics sold for $6.1bn in 2025 and the Los Angeles Lakers’ majority stake was agreed at a $10bn valuation. Our companion piece on why franchise valuations keep rising covers the arithmetic in more detail; the short version is that buyers pay for a protected, inflation-linked annuity with a trophy attached.

How does college sport work as an industry?

American universities run sport as a commercial division with television contracts, ticketing, donors and, since 2025, direct athlete pay. The two richest conferences distributed roughly $2.5bn to their members in 2024-25, and a single football department can now turn over more than $250m a year.

The economics are conference-driven. The Big Ten, now 18 universities from New Jersey to Oregon, sells its football and basketball rights to Fox, CBS and NBC under a contract widely reported at around $7bn, and distributed almost $79.9m per full-share member for 2024-25, with Ohio State receiving about $91.6m and Penn State $88.9m. The SEC’s 16 members received about $72.4m each on average from a $1.1bn pot, driven by its ESPN contract. Newer members of each league take reduced shares for several years (Oregon received $48.4m, Washington $46.7m), a staged entry fee that looks a lot like the NFL’s expansion model in reverse.

The step change came on 6 June 2025 when a federal judge approved the House v. NCAA settlement. It does three things. It commits the NCAA and conferences to $2.8bn of back damages for athletes who could not earn name, image and likeness (NIL) income before 2021. It lets each university share revenue directly with athletes, capped at $20.5m in 2025-26 and rising annually. And it replaces scholarship limits with roster limits, which cost hundreds of walk-on players their places. A new body, the College Sports Commission, led by former MLB executive Bryan Seeley, polices third-party NIL deals through a Deloitte-built clearinghouse. The NCAA itself booked a $2.7bn charge against its 2024 accounts for the settlement, turning its balance sheet negative even in a year when its own revenue was a record $1.38bn.

What that means for a CFO is that college football has become a payroll-bearing business inside a tax-exempt institution. Universities are financing the new cap through ticket surcharges, donor “collectives” and, in some cases, cuts to non-revenue sports. The upside is a feeder system the NFL and NBA get for free: the draft takes talent that has been developed, televised and branded at the universities’ expense. No other country’s sports economy socialises its academy costs this way.

How do media rights set the price of American sport?

Television and streaming pay for scarcity: a limited number of live events, sold nationally, in exclusive windows. The NFL’s $125bn package and the NBA’s $76bn, 11-season agreements with Disney, NBCUniversal and Amazon, which began in October 2025, now set the benchmark for every rights negotiation in the world.

The NBA deal is instructive because it shows how a league trades reach for money. Disney (ABC and ESPN) pays about $2.6bn a year, NBCUniversal $2.5bn and Amazon $1.8bn, roughly $6.9bn a season in total, a 165% increase on the previous contracts. Warner Bros. Discovery, the league’s partner since 1984, was dropped. Games are now spread across broadcast television, cable, Peacock and Prime Video, with Amazon taking the in-season NBA Cup knockout rounds and all play-in games. The league accepted fragmentation for fans in exchange for a guaranteed revenue curve that runs to 2036 and underpins both the salary cap and franchise valuations.

The NFL goes further by selling to six partners at once and keeping YouTube as a Sunday Ticket distributor, while Netflix and Amazon buy individual Christmas and Thursday windows. The league has also begun to monetise its own assets: the sale of NFL Network and other media properties to ESPN in 2025, in exchange for an equity stake in ESPN, produced the non-operating windfall that showed up in the Packers’ accounts. For a deeper look at the contracts themselves, see the NFL and NBA media deals explained.

The weak spot is regional television. Baseball and hockey clubs historically earned hundreds of millions from regional sports networks (RSNs), a cable-bundle product that has been unwinding since the Diamond Sports bankruptcy in 2023. MLB has taken over local broadcasts for several clubs and is building a direct-to-consumer product, which is why its $12.1bn revenue figure is more fragile than the NFL’s. The American model is strongest where the league sells nationally and weakest where it depends on local cable.

Who pays for American stadiums?

Usually a mix of the team, the league’s loan programme, seat licences and taxpayers. The Buffalo Bills’ new Highmark Stadium, opened in 2026, drew $850m from New York State and Erie County; Nashville’s Titans stadium is backed by roughly $1.26bn of public money, a record for an NFL venue.

Public subsidy is the part of the US model most criticised by economists and most durable in practice. The Bills’ deal is typical: a $1.4bn initial estimate that rose past $1.7bn and was reported at $2.2bn by the time the stadium opened in September 2026, with the public contribution capped at $850m and all overruns borne by the team. The club financed its share through the NFL’s G4 stadium-loan programme (owners approved a $200m loan in 2023) and personal seat licences, in which fans pay a one-off fee for the right to buy season tickets. Nashville went further, with the city issuing $760m of bonds and the state $500m for a roughly $2.1bn domed stadium designed to attract a Super Bowl and major concerts.

The economics for the team are excellent: a new stadium raises local revenue, is partly funded by other people, and lifts the franchise valuation on day one. The economics for the city are weaker; decades of academic work, summarised in our article on how stadiums are financed, finds that the local multiplier rarely justifies the subsidy. But cities keep paying because the alternative, losing the franchise to a rival city that will pay, is politically worse. That credible threat of relocation (Oakland to Las Vegas, St. Louis to Los Angeles) is itself a product of the closed-league structure: there are more large metros than franchises, so the franchise holds the leverage.

How has private equity entered US sport?

Through minority stakes that the leagues now permit under strict rules. The NFL opened in August 2024 to approved funds (Arctos, Ares, Sixth Street and a consortium) buying up to 10% of a team; MLB raised its single-firm limit to 20% in 2025, matching the NBA. Billions of institutional capital have followed.

The NFL was the last major league to allow institutional money and did so narrowly: a fund may own stakes in up to six teams, must hold for at least six years, has no voting rights, and no single investor in that fund (including sovereign wealth funds) may exceed 7.5% of it. The controlling owner must still hold at least 30% and ownership groups are capped at 25 people. Within two years the Bills, Dolphins, Eagles, Patriots, Chargers, Browns and Seahawks had sold slices under those rules, and the Giants and 49ers explored 10% sales at valuations that would have been unthinkable in 2020. The point of the rule is liquidity: with values near $10bn, the pool of individuals who can buy an entire team is tiny, so the league created a market for pieces.

The NBA and MLB are more permissive and the money has flowed accordingly. Arctos holds stakes across baseball, basketball and hockey; Sixth Street co-owns the San Antonio Spurs; Dyal (Blue Owl) was the first fund approved by the NBA. Our pillar article on private equity in sport maps the funds and their rules. For the purposes of a country playbook the point is simpler: the US turned sports teams into an institutional asset class by guaranteeing the one thing institutions care about, which is that the league cannot relegate the asset.

How large are the betting, participation and services layers?

Large and growing faster than the leagues. US sportsbooks earned $16.9bn of revenue in 2025, up 22.6%, within a record $78.6bn commercial gaming market, according to the American Gaming Association. Youth, fitness and participation spending adds tens of billions more and employs far more people than the leagues do.

Legal sports betting is barely eight years old in most states and has already become a second revenue stream for every league. Since the Supreme Court struck down the federal ban in 2018, 38 jurisdictions have legalised it; New York alone generated $2.5bn of operator revenue in 2025, with Illinois, New Jersey and Ohio also above $1bn. Leagues earn from data licensing, official-partner sponsorships (FanDuel and DraftKings logos are on arena floors and broadcast graphics) and, indirectly, from engagement. State and local governments took $17.9bn from all commercial gaming in 2025, which helps explain why legislatures keep approving it. Our article on the betting economy and league partnerships covers the deal structures.

Below the headline numbers sits an everyday economy. Youth sport in the United States is a private, pay-to-play market of travel teams, tournaments and facilities that Aspen Institute research has estimated at well over $30bn a year; the fitness-club industry is worth a similar amount; and sporting-goods retail, led by Nike and Dick’s Sporting Goods, is the largest in the world. These sectors employ coaches, trainers, facility managers and retail staff in every county, which is where sport’s claim to be an industry rather than an entertainment product is strongest. The leagues get the headlines; the participation economy gets the jobs.

What can other countries copy from the US playbook, and what can they not?

They can copy collective selling of media rights, cost controls negotiated with players’ unions, premium-seat stadium design and institutional ownership rules. They cannot easily copy the closed league, the college pipeline or the taxpayer-funded stadium, because each depends on political and legal conditions specific to the United States.

The exportable lessons are commercial. Centralised rights sales with equal sharing is already standard in the Premier League and the Bundesliga, which is one reason both leagues are profitable at the top. Salary caps negotiated through collective bargaining require a players’ union strong enough to sign one; UEFA’s squad-cost rule is a regulator-imposed substitute. Premium seating, naming rights and seat licences have crossed the Atlantic with Tottenham Hotspur’s stadium and Real Madrid’s rebuilt Bernabéu. Even Türkiye’s Süper Lig has borrowed the sponsorship playbook, with Turkish Airlines and the big Istanbul clubs selling naming and shirt rights in a way that would be familiar in Dallas, though without the national television income to match.

The non-exportable parts are structural. A closed league without relegation would be illegal under European competition law as interpreted after the 2023 European Super League ruling, and politically impossible in football cultures built on promotion. The college system depends on American universities’ willingness to run billion-dollar sports divisions as part of their mission. And public stadium subsidy on the US scale relies on a federal structure in which cities compete for franchises; a national government that owns the top league, as in several Gulf states, or a league with 92 professional clubs, as in England, has no equivalent bidding war. For the comparison with Germany’s deliberately opposite approach, see our Germany playbook on 50+1 and the member-club model.

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