New report shows NFL, Chiefs a television-over-everything business

Kansas City Star writers Mike Hendricks and Steve Vockrodt released an article titled, Kansas City Chiefs’ tax returns provide rare look inside the business of pro football on Wednesday morning.

I encourage you to read the article in full—because of a rare public filing due to a dispute between the Kansas City Chiefs and Department of Revenue, financial records from the years 2008-10 became available to the public.

The Kansas City Star obtained the records and published its major takeaways from the records this morning:

▪ There is little correlation between the team’s on-field performance and how much money it makes.

▪ [By 2010], the grown children of team founder Lamar Hunt split nearly $40 million in gross operating income. A team executive said they reinvested more than half of it in the team.

▪ Some of the costs fans grumble about the most, such as parking, amount to a tiny fraction of the team’s overall revenues.

The major item that the article confirms for me is that for the Chiefs, and really, all NFL teams, television contracts matter more to the club making money than anything else.

And unlike in other leagues—such as the MLB—the league shares the revenue from its television contract. That number was nearly $100 million in 2010 and has since gone up nearly 150 percent, per the report. The Chiefs made a total of $302 million in 2010, meaning a third of the revenue came from television money.

What this means to me is whenever you think about discussing parking problems, high concession prices, defensive coordinator issues or anything of the sort, remember that each really means little to the bottom line, at least from the organization’s standpoint.

Again, it’s a fascinating piece, and you can check it out in full here.