The National Football League (NFL) is a professional American football league consisting of 32 teams, divided equally between the National Football Conference (NFC) and the American Football Conference (AFC). The NFL is one of the four major professional sports leagues in North America and the highest professional level of American football in the world.[3] The NFL's 17-week regular season runs from early September to late December, with each team playing 16 games and having one bye week. Following the conclusion of the regular season, six teams from each conference (four division winners and two wild card teams) advance to the playoffs, a single-elimination tournament culminating in the Super Bowl, which is usually held on the first Sunday in February and is played between the champions of the NFC and AFC.
The NFL was formed in 1920 as the American Professional Football Association (APFA) before renaming itself the National Football League for the 1922 season. After initially determining champions through end-of-season standings, a playoff system was implemented in 1933 that culminated with the NFL Championship Game until 1966. Following an agreement to merge the NFL with the American Football League (AFL), the Super Bowl was first held in 1967 to determine a champion between the best teams from the two leagues and has remained as the final game of each NFL season since the merger was completed in 1970. Today, the NFL has the highest average attendance (67,591) of any professional sports league in the world[4] and is the most popular sports league in the United States.[5] The Super Bowl is also among the biggest club sporting events in the world,[6] with the individual games accounting for many of the most watched television programs in American history and all occupying the Nielsen's Top 5 tally of the all-time most watched U.S. television broadcasts by 2015.[7]
The Green Bay Packers hold the most combined NFL championships with 13, winning nine titles before the Super Bowl era and four Super Bowls afterwards. Since the creation of the Super Bowl, the Pittsburgh Steelers and New England Patriots both have the most championship titles at six. The Patriots are the NFL's current champions following their victory over the Los Angeles Rams in Super Bowl LIII.
Founding and history
On August 20, 1920, a meeting was held by representatives of the Akron Pros, Canton Bulldogs, Cleveland Indians, and Dayton Triangles at the Jordan and Hupmobile auto showroom in Canton, Ohio.[8] This meeting resulted in the formation of the American Professional Football Conference (APFC), a group who, according to the Canton Evening Repository, intended to "raise the standard of professional football in every way possible, to eliminate bidding for players between rival clubs and to secure cooperation in the formation of schedules".[9]
Another meeting was held on September 17, 1920 with representatives from teams from four states: Akron, Canton, Cleveland, and Dayton from Ohio; the Hammond Pros and Muncie Flyers from Indiana; the Rochester Jeffersons from New York; and the Rock Island Independents, Decatur Staleys, and Racine (Chicago) Cardinals from Illinois.[10] The league was renamed to the American Professional Football Association (APFA).[9] The league elected Jim Thorpe as its first president, and consisted of 14 teams (the Buffalo All-Americans, Chicago Tigers, Columbus Panhandles, and Detroit Heralds joined the league during the year). The Massillon Tigers from Massillon, Ohio was also at the September 17 meeting, but did not field a team in 1920. Only two of these teams, the Decatur Staleys (now the Chicago Bears) and the Chicago Cardinals (now the Arizona Cardinals), remain
Although the league did not maintain official standings for its 1920 inaugural season and teams played schedules that included non-league opponents, the APFA awarded the Akron Pros the championship by virtue of their 8–0–3 (8 wins, 0 losses, and 3 ties) record.[12] The first event occurred on September 26, 1920 when the Rock Island Independents defeated the non-league St. Paul Ideals 48–0 at Douglas Park.[8][13] On October 3, 1920, the first full week of league play occurred.[14][15] The following season resulted in the Chicago Staleys controversially winning the title over the Buffalo All-Americans.[16] On June 24, 1922, the APFA changed its name to the National Football League (NFL).[17][18]
In 1932, the season ended with the Chicago Bears (6–1–6) and the Portsmouth Spartans (6–1–4) tied for first in the league standings.[19] At the time, teams were ranked on a single table and the team with the highest winning percentage (not including ties, which were not counted towards the standings) at the end of the season was declared the champion; the only tiebreaker was that in the event of a tie, if two teams played twice in a season, the result of the second game determined the title (the source of the 1921 controversy). This method had been used since the league's creation in 1920, but no situation had been encountered where two teams were tied for first. The league quickly determined that a playoff game between Chicago and Portsmouth was needed to decide the league's champion. The teams were originally scheduled to play the playoff game, officially a regular season game that would count towards the regular season standings, at Wrigley Field in Chicago, but a combination of heavy snow and extreme cold forced the game to be moved indoors to Chicago Stadium, which did not have a regulation-size football field. Playing with altered rules to accommodate the smaller playing field, the Bears won the game 9–0 and thus won the championship. Fan interest in the de facto championship game led the NFL, beginning in 1933, to split into two divisions with a championship game to be played between the division champions.[20] The 1934 season also marked the first of 12 seasons in which African Americans were absent from the league. The de facto ban was rescinded in 1946, following public pressure and coinciding with the removal of a similar ban in Major League Baseball.[21]
The NFL was always the foremost professional football league in the United States; it nevertheless faced a large number of rival professional leagues through the 1930s and 1940s. Rival leagues included at least three separate American Football Leagues and the All-America Football Conference (AAFC), on top of various regional leagues of varying caliber. Three NFL teams trace their histories to these rival leagues, including the Los Angeles Rams (who came from a 1936 iteration of the American Football League), the Cleveland Browns and San Francisco 49ers (the last two of which came from the AAFC). By the 1950s, the NFL had an effective monopoly on professional football in the United States; its only competition in North America was the professional Canadian football circuit, which formally became the Canadian Football League (CFL) in 1958. With Canadian football being a different football code than the American game, the CFL established a niche market in Canada and still survives as an independent league.
A new professional league, the fourth American Football League (AFL), began play in 1960. The upstart AFL began to challenge the established NFL in popularity, gaining lucrative television contracts and engaging in a bidding war with the NFL for free agents and draft picks. The two leagues announced a merger on June 8, 1966, to take full effect in 1970. In the meantime, the leagues would hold a common draft and championship game. The game, the Super Bowl, was held four times before the merger, with the NFL winning Super Bowl I and Super Bowl II, and the AFL winning Super Bowl III and Super Bowl IV.[22] After the league merged, it was reorganized into two conferences: the National Football Conference (NFC), consisting of most of the pre-merger NFL teams, and the American Football Conference (AFC), consisting of all of the AFL teams as well as three pre-merger NFL teams.[23]
Today, the NFL is considered[clarification needed] the most popular sports league in North America; much of its growth is attributed to former Commissioner Pete Rozelle, who led the league from 1960 to 1989. Overall annual attendance increased from three million at the beginning of his tenure to seventeen million by the end of his tenure, and 400 million global viewers watched 1989's Super Bowl XXIII.[24] The NFL established NFL Properties in 1963. The league's licensing wing, NFL Properties earns the league billions of dollars annually; Rozelle's tenure also marked the creation of NFL Charities and a national partnership with United Way.[24] Paul Tagliabue was elected as commissioner to succeed Rozelle; his seventeen-year tenure, which ended in 2006, was marked by large increases in television contracts and the addition of four expansion teams,[25] as well as the introduction of league initiatives to increase the number of minorities in league and team management roles.[26] The league's current Commissioner, Roger Goodell, has focused on reducing the number of illegal hits and making the sport safer, mainly through fining or suspending players who break rules.[27] These actions are among many the NFL is taking to reduce concussions and improve player safety.[28]
Season and playoff development
From 1920 to 1934, the NFL did not have a set number of games for teams to play, instead setting a minimum. The league mandated a 12-game regular season for each team beginning in 1935, later shortening this to 11 games in 1937 and 10 games in 1943, mainly due to World War II. After the war ended, the number of games returned to 11 games in 1946 and to 12 in 1947. The NFL went to a 14-game schedule in 1961, which it retained until switching to the current 16-game schedule in 1978.[29] Proposals to increase the regular season to 18 games have been made, but have been rejected in labor negotiations with the National Football League Players Association (NFLPA).[30]
The NFL operated in a two-conference system from 1933 to 1966, where the champions of each conference would meet in the NFL Championship Game. If two teams tied for the conference lead, they would meet in a one-game playoff to determine the conference champion. In 1967, the NFL expanded from 15 teams to 16 teams. Instead of just evening out the conferences by adding the expansion New Orleans Saints to the seven-member Western Conference, the NFL realigned the conferences and split each into two four-team divisions. The four division champions would meet in the NFL playoffs, a two-round playoff.[31] The NFL also operated the Playoff Bowl (officially the Bert Bell Benefit Bowl) from 1960 to 1969. Effectively a third-place game, pitting the two conference runners-up against each other, the league considers Playoff Bowls to have been exhibitions rather than playoff games. The league discontinued the Playoff Bowl in 1970 due to its perception as a game for losers.[32]
Following the addition of the former AFL teams into the NFL in 1970, the NFL split into two conferences with three divisions each. The expanded league, now with twenty-six teams,[23] would also feature an expanded eight-team playoff, the participants being the three division champions from each conference as well as one 'wild card' team (the team with the best win percentage) from each conference. In 1978, the league added a second wild card team from each conference, bringing the total number of playoff teams to ten, and a further two wild card teams were added in 1990 to bring the total to twelve. When the NFL expanded to 32 teams in 2002, the league realigned, changing the division structure from three divisions in each conference to four divisions in each conference. As each division champion gets a playoff bid, the number of wild card teams from each conference dropped from three to two.[33]
Corporate structure
At the corporate level, the National Football League considers itself a trade association made up of and financed by its 32 member teams.[34] Up until 2015, the league was an unincorporated nonprofit 501(c)(6) association.[35] Section 501(c)(6) of the Internal Revenue Code provides an exemption from federal income taxation for "Business leagues, chambers of commerce, real-estate boards, boards of trade, or professional football leagues (whether or not administering a pension fund for football players), not organized for profit and no part of the net earnings of which inures to the benefit of any private shareholder or individual.".[36] In contrast, each individual team (except the non-profit Green Bay Packers[37]) is subject to tax because they make a profit.[38]
The NFL gave up the tax exempt status in 2015 following public criticism; in a letter to the club owners, Commissioner Roger Goodell labeled it a "distraction", saying "the effects of the tax exempt status of the league office have been mischaracterized repeatedly in recent years... Every dollar of income generated through television rights fees, licensing agreements, sponsorships, ticket sales, and other means is earned by the 32 clubs and is taxable there. This will remain the case even when the league office and Management Council file returns as taxable entities, and the change in filing status will make no material difference to our business." As a result, the league office might owe around US$10 million in income taxes, but it is no longer required to disclose the salaries of its executive officers.[39]
The league has three defined officers: the commissioner, secretary, and treasurer. Each conference has one defined officer, the president, which is essentially an honorary position with few powers and mostly ceremonial duties (such as awarding the conference championship trophy).
The commissioner is elected by affirmative vote of two-thirds or 18 (whichever is greater) of the members of the league, while the president of each conference is elected by an affirmative vote of three-fourths or ten of the conference members.[40] The commissioner appoints the secretary and treasurer and has broad authority in disputes between clubs, players, coaches, and employees. He is the "principal executive officer"[41] of the NFL and also has authority in hiring league employees, negotiating television contracts, disciplining individuals that own part or all of an NFL team, clubs, or employed individuals of an NFL club if they have violated league bylaws or committed "conduct detrimental to the welfare of the League or professional football".[41] The commissioner can, in the event of misconduct by a party associated with the league, suspend individuals, hand down a fine of up to US$500,000, cancel contracts with the league, and award or strip teams of draft picks.[41]
In extreme cases, the commissioner can offer recommendations to the NFL's Executive Committee up to and including the "cancellation or forfeiture"[41] of a club's franchise or any other action he deems necessary. The commissioner can also issue sanctions up to and including a lifetime ban from the league if an individual connected to the NFL has bet on games or failed to notify the league of conspiracies or plans to bet on or fix games.[41] The current Commissioner of the National Football League is Roger Goodell, who was elected in 2006 after Paul Tagliabue, the previous commissioner, retired.[42]
Financials
NFL revenue is from three primary sources: NFL Ventures (merchandising), NFL Enterprises (NFL Network and NFL Sunday Ticket, which the league controls), and the television contract. The league distributes such revenue equally among teams, regardless of performance. As of February 2019 each team receives $255 million annually from the league's television contract, up 150% from $99.9 million in 2010.[43]
Most NFL teams' financial statements are secret. The Kansas City Star obtained the Kansas City Chiefs' tax returns for 2008–2010. According to the Star, the team's revenue rose from $231 million in 2008 to $302 million in 2010. In 2010, two thirds of revenue came from the league: $99.8 million from NFL Ventures ($55.3 million) and NFL Enterprises ($44.6 million), and the $99.9 million share of the television contract. The remaining one third was from tickets ($42.4 million), corporate sponsorships ($6.6 million), food sales ($5 million), parking passes ($4.7 million), in-stadium advertising ($3.7 million), radio contract ($2.7 million), and miscellaneous sources.[43]
The largest Chiefs expense in 2010 was $148 million for players, coaches, and other employees. Of the $38 million in operating income, Clark, Lamar Jr., two other children, and widow of former team owner Lamar Hunt divided $17.6 million, and reinvested the remaining $20 million into the team.[43]
According to economist Richard D. Wolff, the NFL's revenue model is in contravention of the typical corporate structure. By redistributing profits to all teams the NFL is ensuring that one team will not dominate the league through excessive earnings.[44] Roger Noll described the revenue sharing as the league's "most important structural weakness", however, as there is no disincentive against a team playing badly and the largest cost item, player salaries, is capped.[43]
Teams
The NFL consists of 32 clubs divided into two conferences of 16 teams in each. Each conference is divided into four divisions of four clubs in each. During the regular season, each team is allowed a maximum of 53 players on its roster;[45] only 46 of these may be active (eligible to play) on game days.[46] Each team can also have a 10-player practice squad separate from its main roster, but the practice squad may only be composed of players who were not active for at least nine games in any of their seasons in the league. A player can only be on a practice squad for a maximum of three seasons.[47]
Each NFL club is granted a franchise, the league's authorization for the team to operate in its home city. This franchise covers 'Home Territory' (the 75 miles surrounding the city limits, or, if the team is within 100 miles of another league city, half the distance between the two cities) and 'Home Marketing Area' (Home Territory plus the rest of the state the club operates in, as well as the area the team operates its training camp in for the duration of the camp). Each NFL member has the exclusive right to host professional football games inside its Home Territory and the exclusive right to advertise, promote, and host events in its Home Marketing Area. There are several exceptions to this rule, mostly relating to teams with close proximity to each other: the San Francisco 49ers and Oakland Raiders only have exclusive rights in their cities and share rights outside of it; and teams that operate in the same city (e.g. New York City and Los Angeles) or the same state (e.g. California, Florida, and Texas) share the rights to the city's Home Territory and the state's Home Marketing Area, respectively.[48]
Every NFL team is based in the contiguous United States. Although no team is based in a foreign country, the Jacksonville Jaguars began playing one home game a year at Wembley Stadium in London, England, in 2013 as part of the NFL International Series.[49] The Jaguars' agreement with Wembley was originally set to expire in 2016, but has since been extended through 2020.[50] The Buffalo Bills played one home game every season at Rogers Centre in Toronto, Ontario, Canada, as part of the Bills Toronto Series from 2008 to 2013. Mexico also hosted an NFL regular-season game, a 2005 game between the San Francisco 49ers and Arizona Cardinals known as "Fútbol Americano",[51] and 39 international preseason games were played from 1986 to 2005 as part of the American Bowl series.[52] The Raiders and Houston Texans played a game in Mexico City at Estadio Azteca on November 21, 2016.[53]
According to Forbes, the Dallas Cowboys, at approximately US$4 billion, are the most valuable NFL franchise and the most valuable sports team in the world.[54] Also, all 32 NFL teams rank among the Top 50 most valuable sports teams in the world;[55] and 14 of the NFL's owners are listed on the Forbes 400, the most of any sports league or organization
The NFL was formed in 1920 as the American Professional Football Association (APFA) before renaming itself the National Football League for the 1922 season. After initially determining champions through end-of-season standings, a playoff system was implemented in 1933 that culminated with the NFL Championship Game until 1966. Following an agreement to merge the NFL with the American Football League (AFL), the Super Bowl was first held in 1967 to determine a champion between the best teams from the two leagues and has remained as the final game of each NFL season since the merger was completed in 1970. Today, the NFL has the highest average attendance (67,591) of any professional sports league in the world[4] and is the most popular sports league in the United States.[5] The Super Bowl is also among the biggest club sporting events in the world,[6] with the individual games accounting for many of the most watched television programs in American history and all occupying the Nielsen's Top 5 tally of the all-time most watched U.S. television broadcasts by 2015.[7]
The Green Bay Packers hold the most combined NFL championships with 13, winning nine titles before the Super Bowl era and four Super Bowls afterwards. Since the creation of the Super Bowl, the Pittsburgh Steelers and New England Patriots both have the most championship titles at six. The Patriots are the NFL's current champions following their victory over the Los Angeles Rams in Super Bowl LIII.
Founding and history
On August 20, 1920, a meeting was held by representatives of the Akron Pros, Canton Bulldogs, Cleveland Indians, and Dayton Triangles at the Jordan and Hupmobile auto showroom in Canton, Ohio.[8] This meeting resulted in the formation of the American Professional Football Conference (APFC), a group who, according to the Canton Evening Repository, intended to "raise the standard of professional football in every way possible, to eliminate bidding for players between rival clubs and to secure cooperation in the formation of schedules".[9]
Another meeting was held on September 17, 1920 with representatives from teams from four states: Akron, Canton, Cleveland, and Dayton from Ohio; the Hammond Pros and Muncie Flyers from Indiana; the Rochester Jeffersons from New York; and the Rock Island Independents, Decatur Staleys, and Racine (Chicago) Cardinals from Illinois.[10] The league was renamed to the American Professional Football Association (APFA).[9] The league elected Jim Thorpe as its first president, and consisted of 14 teams (the Buffalo All-Americans, Chicago Tigers, Columbus Panhandles, and Detroit Heralds joined the league during the year). The Massillon Tigers from Massillon, Ohio was also at the September 17 meeting, but did not field a team in 1920. Only two of these teams, the Decatur Staleys (now the Chicago Bears) and the Chicago Cardinals (now the Arizona Cardinals), remain
Although the league did not maintain official standings for its 1920 inaugural season and teams played schedules that included non-league opponents, the APFA awarded the Akron Pros the championship by virtue of their 8–0–3 (8 wins, 0 losses, and 3 ties) record.[12] The first event occurred on September 26, 1920 when the Rock Island Independents defeated the non-league St. Paul Ideals 48–0 at Douglas Park.[8][13] On October 3, 1920, the first full week of league play occurred.[14][15] The following season resulted in the Chicago Staleys controversially winning the title over the Buffalo All-Americans.[16] On June 24, 1922, the APFA changed its name to the National Football League (NFL).[17][18]
In 1932, the season ended with the Chicago Bears (6–1–6) and the Portsmouth Spartans (6–1–4) tied for first in the league standings.[19] At the time, teams were ranked on a single table and the team with the highest winning percentage (not including ties, which were not counted towards the standings) at the end of the season was declared the champion; the only tiebreaker was that in the event of a tie, if two teams played twice in a season, the result of the second game determined the title (the source of the 1921 controversy). This method had been used since the league's creation in 1920, but no situation had been encountered where two teams were tied for first. The league quickly determined that a playoff game between Chicago and Portsmouth was needed to decide the league's champion. The teams were originally scheduled to play the playoff game, officially a regular season game that would count towards the regular season standings, at Wrigley Field in Chicago, but a combination of heavy snow and extreme cold forced the game to be moved indoors to Chicago Stadium, which did not have a regulation-size football field. Playing with altered rules to accommodate the smaller playing field, the Bears won the game 9–0 and thus won the championship. Fan interest in the de facto championship game led the NFL, beginning in 1933, to split into two divisions with a championship game to be played between the division champions.[20] The 1934 season also marked the first of 12 seasons in which African Americans were absent from the league. The de facto ban was rescinded in 1946, following public pressure and coinciding with the removal of a similar ban in Major League Baseball.[21]
The NFL was always the foremost professional football league in the United States; it nevertheless faced a large number of rival professional leagues through the 1930s and 1940s. Rival leagues included at least three separate American Football Leagues and the All-America Football Conference (AAFC), on top of various regional leagues of varying caliber. Three NFL teams trace their histories to these rival leagues, including the Los Angeles Rams (who came from a 1936 iteration of the American Football League), the Cleveland Browns and San Francisco 49ers (the last two of which came from the AAFC). By the 1950s, the NFL had an effective monopoly on professional football in the United States; its only competition in North America was the professional Canadian football circuit, which formally became the Canadian Football League (CFL) in 1958. With Canadian football being a different football code than the American game, the CFL established a niche market in Canada and still survives as an independent league.
A new professional league, the fourth American Football League (AFL), began play in 1960. The upstart AFL began to challenge the established NFL in popularity, gaining lucrative television contracts and engaging in a bidding war with the NFL for free agents and draft picks. The two leagues announced a merger on June 8, 1966, to take full effect in 1970. In the meantime, the leagues would hold a common draft and championship game. The game, the Super Bowl, was held four times before the merger, with the NFL winning Super Bowl I and Super Bowl II, and the AFL winning Super Bowl III and Super Bowl IV.[22] After the league merged, it was reorganized into two conferences: the National Football Conference (NFC), consisting of most of the pre-merger NFL teams, and the American Football Conference (AFC), consisting of all of the AFL teams as well as three pre-merger NFL teams.[23]
Today, the NFL is considered[clarification needed] the most popular sports league in North America; much of its growth is attributed to former Commissioner Pete Rozelle, who led the league from 1960 to 1989. Overall annual attendance increased from three million at the beginning of his tenure to seventeen million by the end of his tenure, and 400 million global viewers watched 1989's Super Bowl XXIII.[24] The NFL established NFL Properties in 1963. The league's licensing wing, NFL Properties earns the league billions of dollars annually; Rozelle's tenure also marked the creation of NFL Charities and a national partnership with United Way.[24] Paul Tagliabue was elected as commissioner to succeed Rozelle; his seventeen-year tenure, which ended in 2006, was marked by large increases in television contracts and the addition of four expansion teams,[25] as well as the introduction of league initiatives to increase the number of minorities in league and team management roles.[26] The league's current Commissioner, Roger Goodell, has focused on reducing the number of illegal hits and making the sport safer, mainly through fining or suspending players who break rules.[27] These actions are among many the NFL is taking to reduce concussions and improve player safety.[28]
Season and playoff development
From 1920 to 1934, the NFL did not have a set number of games for teams to play, instead setting a minimum. The league mandated a 12-game regular season for each team beginning in 1935, later shortening this to 11 games in 1937 and 10 games in 1943, mainly due to World War II. After the war ended, the number of games returned to 11 games in 1946 and to 12 in 1947. The NFL went to a 14-game schedule in 1961, which it retained until switching to the current 16-game schedule in 1978.[29] Proposals to increase the regular season to 18 games have been made, but have been rejected in labor negotiations with the National Football League Players Association (NFLPA).[30]
The NFL operated in a two-conference system from 1933 to 1966, where the champions of each conference would meet in the NFL Championship Game. If two teams tied for the conference lead, they would meet in a one-game playoff to determine the conference champion. In 1967, the NFL expanded from 15 teams to 16 teams. Instead of just evening out the conferences by adding the expansion New Orleans Saints to the seven-member Western Conference, the NFL realigned the conferences and split each into two four-team divisions. The four division champions would meet in the NFL playoffs, a two-round playoff.[31] The NFL also operated the Playoff Bowl (officially the Bert Bell Benefit Bowl) from 1960 to 1969. Effectively a third-place game, pitting the two conference runners-up against each other, the league considers Playoff Bowls to have been exhibitions rather than playoff games. The league discontinued the Playoff Bowl in 1970 due to its perception as a game for losers.[32]
Following the addition of the former AFL teams into the NFL in 1970, the NFL split into two conferences with three divisions each. The expanded league, now with twenty-six teams,[23] would also feature an expanded eight-team playoff, the participants being the three division champions from each conference as well as one 'wild card' team (the team with the best win percentage) from each conference. In 1978, the league added a second wild card team from each conference, bringing the total number of playoff teams to ten, and a further two wild card teams were added in 1990 to bring the total to twelve. When the NFL expanded to 32 teams in 2002, the league realigned, changing the division structure from three divisions in each conference to four divisions in each conference. As each division champion gets a playoff bid, the number of wild card teams from each conference dropped from three to two.[33]
Corporate structure
At the corporate level, the National Football League considers itself a trade association made up of and financed by its 32 member teams.[34] Up until 2015, the league was an unincorporated nonprofit 501(c)(6) association.[35] Section 501(c)(6) of the Internal Revenue Code provides an exemption from federal income taxation for "Business leagues, chambers of commerce, real-estate boards, boards of trade, or professional football leagues (whether or not administering a pension fund for football players), not organized for profit and no part of the net earnings of which inures to the benefit of any private shareholder or individual.".[36] In contrast, each individual team (except the non-profit Green Bay Packers[37]) is subject to tax because they make a profit.[38]
The NFL gave up the tax exempt status in 2015 following public criticism; in a letter to the club owners, Commissioner Roger Goodell labeled it a "distraction", saying "the effects of the tax exempt status of the league office have been mischaracterized repeatedly in recent years... Every dollar of income generated through television rights fees, licensing agreements, sponsorships, ticket sales, and other means is earned by the 32 clubs and is taxable there. This will remain the case even when the league office and Management Council file returns as taxable entities, and the change in filing status will make no material difference to our business." As a result, the league office might owe around US$10 million in income taxes, but it is no longer required to disclose the salaries of its executive officers.[39]
The league has three defined officers: the commissioner, secretary, and treasurer. Each conference has one defined officer, the president, which is essentially an honorary position with few powers and mostly ceremonial duties (such as awarding the conference championship trophy).
The commissioner is elected by affirmative vote of two-thirds or 18 (whichever is greater) of the members of the league, while the president of each conference is elected by an affirmative vote of three-fourths or ten of the conference members.[40] The commissioner appoints the secretary and treasurer and has broad authority in disputes between clubs, players, coaches, and employees. He is the "principal executive officer"[41] of the NFL and also has authority in hiring league employees, negotiating television contracts, disciplining individuals that own part or all of an NFL team, clubs, or employed individuals of an NFL club if they have violated league bylaws or committed "conduct detrimental to the welfare of the League or professional football".[41] The commissioner can, in the event of misconduct by a party associated with the league, suspend individuals, hand down a fine of up to US$500,000, cancel contracts with the league, and award or strip teams of draft picks.[41]
In extreme cases, the commissioner can offer recommendations to the NFL's Executive Committee up to and including the "cancellation or forfeiture"[41] of a club's franchise or any other action he deems necessary. The commissioner can also issue sanctions up to and including a lifetime ban from the league if an individual connected to the NFL has bet on games or failed to notify the league of conspiracies or plans to bet on or fix games.[41] The current Commissioner of the National Football League is Roger Goodell, who was elected in 2006 after Paul Tagliabue, the previous commissioner, retired.[42]
Financials
NFL revenue is from three primary sources: NFL Ventures (merchandising), NFL Enterprises (NFL Network and NFL Sunday Ticket, which the league controls), and the television contract. The league distributes such revenue equally among teams, regardless of performance. As of February 2019 each team receives $255 million annually from the league's television contract, up 150% from $99.9 million in 2010.[43]
Most NFL teams' financial statements are secret. The Kansas City Star obtained the Kansas City Chiefs' tax returns for 2008–2010. According to the Star, the team's revenue rose from $231 million in 2008 to $302 million in 2010. In 2010, two thirds of revenue came from the league: $99.8 million from NFL Ventures ($55.3 million) and NFL Enterprises ($44.6 million), and the $99.9 million share of the television contract. The remaining one third was from tickets ($42.4 million), corporate sponsorships ($6.6 million), food sales ($5 million), parking passes ($4.7 million), in-stadium advertising ($3.7 million), radio contract ($2.7 million), and miscellaneous sources.[43]
The largest Chiefs expense in 2010 was $148 million for players, coaches, and other employees. Of the $38 million in operating income, Clark, Lamar Jr., two other children, and widow of former team owner Lamar Hunt divided $17.6 million, and reinvested the remaining $20 million into the team.[43]
According to economist Richard D. Wolff, the NFL's revenue model is in contravention of the typical corporate structure. By redistributing profits to all teams the NFL is ensuring that one team will not dominate the league through excessive earnings.[44] Roger Noll described the revenue sharing as the league's "most important structural weakness", however, as there is no disincentive against a team playing badly and the largest cost item, player salaries, is capped.[43]
Teams
The NFL consists of 32 clubs divided into two conferences of 16 teams in each. Each conference is divided into four divisions of four clubs in each. During the regular season, each team is allowed a maximum of 53 players on its roster;[45] only 46 of these may be active (eligible to play) on game days.[46] Each team can also have a 10-player practice squad separate from its main roster, but the practice squad may only be composed of players who were not active for at least nine games in any of their seasons in the league. A player can only be on a practice squad for a maximum of three seasons.[47]
Each NFL club is granted a franchise, the league's authorization for the team to operate in its home city. This franchise covers 'Home Territory' (the 75 miles surrounding the city limits, or, if the team is within 100 miles of another league city, half the distance between the two cities) and 'Home Marketing Area' (Home Territory plus the rest of the state the club operates in, as well as the area the team operates its training camp in for the duration of the camp). Each NFL member has the exclusive right to host professional football games inside its Home Territory and the exclusive right to advertise, promote, and host events in its Home Marketing Area. There are several exceptions to this rule, mostly relating to teams with close proximity to each other: the San Francisco 49ers and Oakland Raiders only have exclusive rights in their cities and share rights outside of it; and teams that operate in the same city (e.g. New York City and Los Angeles) or the same state (e.g. California, Florida, and Texas) share the rights to the city's Home Territory and the state's Home Marketing Area, respectively.[48]
Every NFL team is based in the contiguous United States. Although no team is based in a foreign country, the Jacksonville Jaguars began playing one home game a year at Wembley Stadium in London, England, in 2013 as part of the NFL International Series.[49] The Jaguars' agreement with Wembley was originally set to expire in 2016, but has since been extended through 2020.[50] The Buffalo Bills played one home game every season at Rogers Centre in Toronto, Ontario, Canada, as part of the Bills Toronto Series from 2008 to 2013. Mexico also hosted an NFL regular-season game, a 2005 game between the San Francisco 49ers and Arizona Cardinals known as "Fútbol Americano",[51] and 39 international preseason games were played from 1986 to 2005 as part of the American Bowl series.[52] The Raiders and Houston Texans played a game in Mexico City at Estadio Azteca on November 21, 2016.[53]
According to Forbes, the Dallas Cowboys, at approximately US$4 billion, are the most valuable NFL franchise and the most valuable sports team in the world.[54] Also, all 32 NFL teams rank among the Top 50 most valuable sports teams in the world;[55] and 14 of the NFL's owners are listed on the Forbes 400, the most of any sports league or organization
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