National Football League Term Paper

Download this Term Paper in word format (.doc)

Note: Sample below may appear distorted but all corresponding word document files contain proper formatting

Excerpt from Term Paper:

National Football League is the most profitable sports enterprise. The industry boasts over 100 teams and grosses billions in profits each year. The purpose of this discussion is to analyze this industry using Porter's five forces. We will also provide a company analysis of the Cincinnati Bengals. In addition, the discussion will focus on an analysis between the United States Army and the National Football league.

Industry Analysis of the National Football League using Michael Porters 5 Forces:

The national football league has grown tremendously since the time of its inception. Although the NFL is known today as the premier entity for football in America, it is not the first professional football league. The first league was the American Professional football league, which was founded in 1920. (NFL History Guide) The national football league came into being in 1922. (NFL History Guide) According to the NFL history guide, once the NFL was formed professional football became as popular as college football once the draft was put into place in 1936. (NFL History Guide) The guide asserts that the popularity of the NFL continued to grow and coaches developed new offensive and defensive plays that made the game more exciting. (NFL History Guide)

However by the 1970's the popularity of the NFL began to decrease. (NFL History Guide) The guide explains that in 1970 ABC began televising Monday night football, which has become a mainstay in American television. (NFL History Guide) Today the NFL is extremely successful and football remains as an extremely popular sport. (NFL History Guide)

Threat of new entrants

The threat of new entrants into an industry can be an extremely volatile issue for many different industries. The national football league is the most lucrative professional sports entity. Football is an extremely popular sport and Americans spend a great deal of money on Football related items. For many industries, the threat of new entrants is extremely high.

For the National Football league, the threat of new entrants is extremely low. The reason why there is a low likelihood of this occurring has to do with the expense associated with the startup costs associated with entering the industry. It is extremely expensive to put into place the infrastructure that is needed to become a part of such an industry.

Bargaining power of buyers

Buyers in this industry have limited buying power. Because the industry consists of different teams, prices related to purchasing vary and are set by the individual teams. Depending on where the team is located, these prices can be higher or lower. Buyers have some power because if they are not willing to pay for tickets or purchase team products because they are too expensive.

Threat of substitute products or services

The threat of substitute products is very low. Arena Football can be viewed as a substitute product but Arena football is not nearly as popular as conventional football but it could be viewed as a substitute. In addition, some sports enthusiasts may become more interested in other sports and made substitute watching football for some other sport. However, the possibility of this occurring is unlikely because sports seasons differ and although they often overlap the threat of a different sport, becoming a substitute is extremely unlikely.

Bargaining power of suppliers

Suppliers have bargaining power. In the case of the NFL and its suppliers, one hand washes the other. The National Football League needs certain products and services to survive and the suppliers need that prestige of being associated with the NFL.

The suppliers with the most bargaining power are the athletes and their agents. They have the most power because they have the ability to negotiate contracts. According to an article found in the American Business Law Journal, this is referred to as individual contract negotiations. The article explains that 'The salary system in the NFL is comprised of various mechanisms and rules that create the framework within which contract negotiations are conducted and league-wide salaries are generally determined.(12) Overall team salaries are largely controlled by the League's salary cap, a mechanism in the League's current CBA designed to limit the amount of money that individual teams can spend on player salaries.(13) The current CBA also establishes distinct categories of players, primarily on the basis of seniority or the number of accrued seasons in the League,(14) although two categories or designations of players, franchise and transition players, are determined on the basis of superior ability or value to a team.(15) Within the restrictions imposed by the salary cap, individual player salaries are driven by distinct sets of rules governing negotiations for each of these different categories of players." (Lock 1998)

This process allows the player to receive the pay that they want while assuring the team that the player cannot receive an unlimited amount of money because of the salary cap that exists. The salary cap differs from team to team and taken as a percentage of defined gross revenues. (Lock 1998)

Rivalry among existing firms

The only existing firms are the Canadian Football League and Arena Football league, which really do not possess the wherewithal to rival the NFL. The Canadian Football League often recruits college players who are not able to get into the NFL. Arena Football also recruits college players and the game is played on a smaller field (50 yards). Although the arena league has had some labor disputes, the arena football league has had some success in recent years. (Fisher) According to an article found in the Washington Times the arena football league is quietly flourishing. The article asserts that the "AFL is ever so quietly posting some of the strongest growth figures in the entire sports industry, regardless of particular sport or size. Average attendance for the 2004 season, which started Feb. 5, is 12,503-12% above last year and on pace for the league's highest mark in its 18 years. Sellouts in several markets, including Philadelphia, Columbus, Ohio and Denver, are regular occurrences. Television audiences for AFL games on NBC average around 1.7 million households, more than the NHL on ABC and competitive with CBS' regular-season college basketball coverage. Franchise values have soared from $375,000 to $16 million in less than a decade. Merchandise sales have increased by more than 50%. The league has attracted a star-studded lineup of team owners including NFL legend John Elway, rock star Jon Bon Jovi, and current NFL team owners Jerry Jones, Tom Benson and Pat Bowlen. Neither one of these entities has the money or the know how to seriously compete with the National Football League." (Fischer)

Industry economic trends

It is evident that the industry will remain profitable. The NFL will probably continue to grow and establish more expansion teams. Monday night football and the game of football will continue to be popular. In addition, the amount of talented players will continue to increase as advances in technology and the proper coaching increases. Although the Canadian Football league and Arena Football are much smaller players in the industry their productivity will probably remain steady because of the popularity of the sport.

In addition the American economy seems to be in recovery mode. This economic recovery will encourage spending and allow people to purchase more products. This increased spending will have a positive impact on professional sports because people will have money to purchase tickets and other sports related products.

Industry competitive forces

The competitive forces for this industry involve copycat leagues. These leagues, which have sprung up periodically throughout the life of the NFL, can be competitive by drawing away coaches and players. Although the arena league is not yet a serious threat to the NFL, it may become one as it continues to become more successful and gains more support from celebrities and ex-NFL players.

Drivers of industry changes

The main driver of industry change is the condition of the economy. Also in recent years there have been incidences of indecency and sexually explicit material that has appeared during televise NFL games. These problems occurred during the Super Bowl and more recently during a prime time NFL game. Because the NFL games have traditionally been associated with family entertainment, many people have been offended by these events. If these problems keep occurring, the NFL may have difficulty maintaining a faithful audience for televised football, which may hurt the NFL. As for the Arena Football league and the Canadian Football League economic factors also drive changes in the success of the leagues. In addition, the amount of investors who choose to invest in this industry can be a major factor in changes that may occur in the industry.

Key success factors

Many factors contribute to the success of this industry. The first factor is the popularity of the sport. The fact that so many people enjoy football and are willing to purchase football related products makes the industry successful. The industry has been able to capitalize of the popularity of the sport.

In addition, the NFL has been able to…[continue]

Cite This Term Paper:

"National Football League" (2004, November 19) Retrieved October 26, 2016, from

"National Football League" 19 November 2004. Web.26 October. 2016. <>

"National Football League", 19 November 2004, Accessed.26 October. 2016,

Other Documents Pertaining To This Topic

  • Labor Unions the National Football League NFL

    Labor Unions The National Football League (NFL) is a high profile sports organization that contributes to the large and growing sports business market and is one of the most recognized corporate brands in America. Every Sunday millions of people watch professional football presented by this organization. Commercial slots for these games provides incredible amounts of revenue as products such as jersey's, cable packages and season tickets contribute to this powerful organization.

  • Sports and Anti Trust Is the National Football

    Sports and Anti-Trust Is the National Football League's Requirements to Enter the Draft a Violation of Antitrust Law? If so why? Why does the NFL think it is not a violation? Defining the AntiTrusts Legislation Sherman AntiTrust Legislation Clayton Antitrust amendment Presidential support The Maurice Clarett Case The NFL's position, The effect is could have on the game. Judge Scheinin's decision Sherman Antitrust Act Clayton Act Basis of Judge Shira Scheinin's Decision Other cases from other Professional sports leagues, like the NBA, that are

  • Football More Popular Than Baseball

    Football A recent poll by Harris Poll showed that professional football -- the NFL -- is the most popular sport in the United States. The sport was cited as the favorite by 36% of respondents (SBD 2012). This is up from 24% in 1985. The same poll noted a decline in the popularity of baseball that was almost as severe, that sport dropping from 23% support in 1985 to just 13%

  • Football Stadium Financing a Football

    For all intents and purposes, the public benefits which are stated to accompany the development of a football stadium become increasingly less pertinent to a city's bottom line as time passes. The aging of stadiums and the constant development of newer facilities means that with the passage of just a decade, the returns on such attractions as sports attendance, convention attendance and construction employment have diminished or disappeared entirely.

  • NFL Foundation

    Their activities and support of the foundation; enable the league to demonstrate a higher purpose which is of greater social value. (Ferriter) In the majority of cases, the NFL is using the various high profile marketing events to illustrate the importance of sports in promoting various charity related events. The Super Bowl is the biggest event with it using the game as an avenue to help the community which is

  • Analyzing the NFL and Its Contributions to the American Society

    National Football League refers to professional football league based in the U.S. And forms the major professional football sport leagues in the U.S. The league comprises of the 32 teams that are divided equally between the American Football Conference and the National Football Conference. Formed in the 1920, the league has expanded to become one of the largest and most renowned football leagues across the world. The organization rewards its

  • High School Football vs College Football

    Football Besides the age, height, and weight differences, high school and college football players share many common traits. Most of them have been playing sports since they were young children and are therefore highly dedicated. However, in high school, parents are still intimately involved with their children's playing: they often show up for after-school practices or volunteer at games. Once they reach college, these young players essentially become adults. Often leaving

Read Full Term Paper
Copyright 2016 . All Rights Reserved