The American Money Machine

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The league's fastest growing revenue stream comes from new stadiums, which are also a product of the recent centralization. Under a program called G3, the league grabs $1 million in television revenues from each team and uses the money as collateral to float bonds for stadium construction. The NFL has loaned $725 million to help build or renovate 20 stadiums in the past 10 years. Total investment: $3 billion, $2.4 billion of which has been put up by owners. To keep those projects going — new stadiums are abuilding in Dallas and Phoenix, Ariz.--the league maintains in-house finance and stadium-design arms that the owners can tap when needed.

These new football palaces have made the games a much more pleasant customer experience. And they gush money. The Patriots' Gillette Stadium opened in 2002 at a cost of $350 million. None of it was publicly financed, and about half was initially financed by the NFL. The new stadium has 87 luxury suites, which sell for $100,000 to $300,000 annually; its 6,000 clubhouse seats go for $5,000 each. Throw in the stadium signage and naming rights, and the Patriots go from 28th in the league in stadium revenues to near the top. The Green Bay Packers increased revenues 36% in two years with the help of a stadium renovation too.

The league has pulled this off despite a decision-making structure that seems perfectly rigged for trouble. There are 32 owners, many of whom are entrepreneurs who tend to follow the golden rule of management: he who has the gold makes the rules. Those owners are assigned to committees charged with handling everything from labor, competition and broadcasting to finding a team for Los Angeles. It's a group that includes NFL rebel Al Davis of the Oakland Raiders, financial ciphers like Malcolm Glazer of the Tampa Bay Buccaneers, nouveau riche types like Daniel Snyder (Redskins) and old-school owners such as the Rooney (Steelers) and Mara (Giants) families.

The trickiest part? No decision or deal can be approved without a 75% majority of the owners. "Nine guys can prevent you from taking a bathroom break," says Denver's Bowlen. For the NFL's front office, the 75% rule practically demands that any new idea or proposal be absolutely compelling, since it must be embraced by a group of powerful individuals who don't necessarily share the same agenda. "It's not that we all like each other and want to have dinner with each other all the time," says Bowlen. "It does force a clarity of thinking," says Harold Henderson, the NFL's labor chief. "You can't present something to them unless you've thought it through thoroughly." Or as Bowlen puts it, if there are 11 or 12 owners who agree to disagree on a proposal, "something must be wrong with it."

Although the Patriots are now one of the NFL's most successful teams, the counterintuitive management lesson that owner Kraft had to learn is that losing is the defining feature of football. "Even in a good year, when you go 10-6, you are going to lose about 40% of your games," he says. So Kraft went long in his management approach. A paper-industry magnate, he says football has a lot in common with the rough-and-tumble paper trade, in which shifting commodity prices can quickly turn gains into losses. But having the right system in place brings profits in the long term.