Good Question: Where Does The Money From Sports Merchandise Go?

MINNEAPOLIS (WCCO) — One look into the stands of any Vikings game and you’re bound to see a sea of purple – in jerseys, shirts and hats.  Sports fans buy between three and five billion dollars of pro football and baseball merchandise each year. It’s about $2 billion for the NBA and $1 billion for the NHL.

So, where does all that money go? Good Question.

Clothing manufacturers pay a licensing fee to be able to sell official sports merchandise.  Adidas has a deal with the NHL, Nike has them with the NFL and NBA and Majestic has a deal with MLB.

In 2011, Sports Illustrated reported Nike paid $1.1 billion to officially license NFL merchandise.

“It only costs them a few dollars to make each of these jerseys, so they have to charge as high as possible prices in hope that they can then recoup that investment,” says Jonathan Jensen, assistant professor of sports administration at the University of North Carolina at Chapel Hill.

Between 11 percent and 15 percent of the merchandise sales will go to the league and is then shared equally among the teams.  The rest goes to the manufacturer.

“Any of these league deals are really not public, so it’s hard to unpack how exactly the deal is structured and what those percentages have been agreed upon between the league and those teams,” says Jensen.

If a jersey with a player’s name is sold, a small cut of that money will go to the players’ association as well as the player.

“The player could get hurt or traded or something that puts them in a bad light and the retailers are on the hook for all of that risk,” Jensen says.

How much money goes to the team or the retailer also depends on where the merchandise is sold.  Retailers will take a cut when it’s sold in their stores.  A team will make some money the merchandise is sold in their stadium.

More from Heather Brown

One Comment

  1. Dan Mack says:

    The answer is the money goes to China. Same with almost all our clothing and manufactured goods. That is as it should be here in the Socialist Village. We are proud to have very little capitalism or manufacturing left to stamp out thanks to our Socialist DFL locally and our comrades in the national Socialist party.

    1. Mike Bannon says:

      Very little money goes to China. It mostly goes to Nike or whatever brand name is on the merchandise.

      1. Dan Mack says:

        The money that does not go directly to the manufacturers in China may circulate a bit before being swept into the 20 trillion dollar trade deficit vortex. But that is as it should be to conceal our Socialist Welfare Ponzi scheme. Hillary will tax the rich, and with Bernie Sanders’s help, pay all that back after we elect her.

  2. Wendy Jane says:

    The Nike NFL Jerseys SUCK. You practically need shoulder pads to fit into one properly because of the way it’s cut. Bring back Reebok’s version!!

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