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Kansas City Chiefs have become one of the NFL's dynasties -- here's why they should be valued less than teams that regularly miss playoffs.

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September 6, 2024

But making and dominating the playoffs won’t produce as much value-driving revenue for a team as one would assume; most of their earnings each season come from NFL media rights fees that skyrocket annually. According to CNBC’s reporting and data analysis, NFL teams typically received media rights fees of more than $350 Million during 2023 season – representing well over half their annual revenues according to most studies of financial information from league. Last season, the Chiefs recorded $590 Million in revenue. Furthermore, much of their postseason ticket sales revenue goes directly back to cover expenses within their league. Home teams receive a small stipend from hosting playoff games; however, doing it 10 times over five years – as has happened with the Chiefs – doesn’t impact ticket sales as significantly. Contrast that with leagues like NBA and NHL, where clubs enjoy much larger cuts of playoff ticket revenue. Stadium ownership and operating rights also represent lucrative sources of income for NFL clubs. Jerry Jones of the Dallas Cowboys set the blueprint for earning huge amounts not shared across all teams in the league through sponsorship deals and nonfootball events at AT&T Stadium – something Kansas City Chiefs owner Clark Hunt cannot duplicate just yet. Arrowhead Stadium, owned and rented out to them by Jackson County Sports Complex Authority. Because they pay rent to this authority rather than being tenants themselves, Lamar Hunt family-owned Chiefs cannot monetize nonfootball revenue as effectively as Cowboys or Rams do. Arrowhead Stadium was constructed over 50 years ago and lacks the wide-ranging sponsorship and advertising opportunities offered by newer venues like Las Vegas Raiders Allegiant Stadium or Los Angeles Rams SoFi Stadium, among others. Chiefs ownership had intended to upgrade it. Jackson County voters in Missouri rejected an extension proposal of sales taxes which would have helped finance renovation costs. Leaders of the Kansas City Chiefs have set an end-of-2024 deadline as an informal decision deadline regarding what will occur when their current leasing agreement with Jackson County Sports Complex Authority expires in 2031. Though postseason appearances and success don’t directly equate to financial gains for any team during one playoff run year alone, their effects can still have lasting benefits for ticket sales as having an improved record could drive prices up and increase revenues for some time afterward. According to Statista, Kansas City Chiefs tickets averaged an above-league-average ticket cost per game at $131.81 during 2023 season – well exceeding their league-wide average ticket cost of $120.94. Perennial playoff teams may also appeal to sponsors because they provide almost assured attendance every season – the Chiefs made history Thursday by beating Baltimore Ravens 27-20! CNBC PRO provides some insights from this exciting victory! Don’t miss them.

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