Forbes' NFL team valuations

[sj-roc]

Article from Forbes this week on the valuations of all NFL franchises:

http://www.forbes.com/sites/mikeozanian ... valuation/

The ranked listing is here:

http://www.forbes.com/nfl-valuations/list/

20 of 32 franchises are valued at $1B+ and none lost value from a year ago. The valuations range from a low of $770M for the Jacksonville Jaguars up to a league-leading $2.1B for the Dallas Cowboys.

No comparing the Cowboys to other North American sports teams in terms of their money-making power; their EBITDA is almost double that of the next NFL team and more than the total from all teams combined in the NHL or NBA. Any investor would have to envy the 12.2% average annual growth rate of the Cowboys' valuation over the 23 years of JJ's ownership — about the same as the equally impressive average annualised growth in the NFL's broadcasting revenue dating back to 1970 — which corresponds to a doubling in value every six years or so.

Interestingly, JJ's net worth at $2.7B is not much greater than the Cowboys' valuation.

[notahomer]

Kinda neat too because the NFL does have a lot of socialist type ideas. In other words, its competitive but really what is Jone's Cowboy franchise really worth if all the other teams do not succeed as well. I don't mean football wise but business wise. The NFL does a lot of revenue sharing and fiddling with the free market that would be called 'socialist tinkering' if it were applied to other segments of the US economy. But it makes the NFL truly competitive and helps raise all the ships in the ocean.

I'm still amazed there is no Los Angeles franchise and I think whatever team that ends up there will quickly rise in these FORBES NFL team valuations......

[Toppy Vann]

Kinda neat too because the NFL does have a lot of socialist type ideas. In other words, its competitive but really what is Jone's Cowboy franchise really worth if all the other teams do not succeed as well. I don't mean football wise but business wise. The NFL does a lot of revenue sharing and fiddling with the free market that would be called 'socialist tinkering' if it were applied to other segments of the US economy. But it makes the NFL truly competitive and helps raise all the ships in the ocean.

I'm still amazed there is no Los Angeles franchise and I think whatever team that ends up there will quickly rise in these FORBES NFL team valuations......

LOL not sure of the socialist label as that is a bit deep for a football board but in the NFL cities were outbidding for teams with stadium deals down in the US. Not quite like that here in the CFL.


If you at the Eng. Prem. League it is clear that the haves win and the have nots lose. Not a good scene for the future.

[sj-roc]

Kinda neat too because the NFL does have a lot of socialist type ideas. In other words, its competitive but really what is Jone's Cowboy franchise really worth if all the other teams do not succeed as well. I don't mean football wise but business wise. The NFL does a lot of revenue sharing and fiddling with the free market that would be called 'socialist tinkering' if it were applied to other segments of the US economy. But it makes the NFL truly competitive and helps raise all the ships in the ocean.

I'm still amazed there is no Los Angeles franchise and I think whatever team that ends up there will quickly rise in these FORBES NFL team valuations......

I suppose it depends on how one looks at it. Microscopically the various wealth redistribution schemes of the NFL might be considered socialist but macroscopically the goal of these schemes is to maximise the aggregate wealth, which of course would make it capitalist. One could even apply an economic argument to assert that the microscopically socialist schemes create somewhat of a free rider problem whereby some franchises never seem to invest as much effort as others into fielding a competitive lineup. I believe Bob Ackles made such observations on the relative merits of some NFL franchises in his Waterboy book, although I don't think he was couching them within such an economic framework model, but relating them more to variations in team ownership culture.

[cromartie]

LOL not sure of the socialist label as that is a bit deep for a football board but in the NFL cities were outbidding for teams with stadium deals down in the US. Not quite like that here in the CFL.
If you at the Eng. Prem. League it is clear that the haves win and the have nots lose. Not a good scene for the future.

A lot of interesting observations for two sentences.

The NFL does operate on a socialist plus model. In the NFL, each team shares base revenue, including national and international television revenue equally. This in and of itself is generally enough to get you close to profitability in all but a few instances. In addition, all licensing revenue that falls under the umbrella of NFL Properties and all licensed use of NFL league and individual team logos are shared equally as well.

Gate revenue is a 60/40 split for home and away.

Above and beyond that, however, whatever you can make as a club, you make as a club. Luxury box revenue, sponsorship naming rights, local radio and preseason television contracts, and whatever you can squeeze out of your local municipality in terms of how to generate revenue from your stadium and game day operations is yours to keep. To that end, NFL teams are encouraged to squeeze local municipalities for as much of a percentage of revenue from the stadium as they can to enhance their bottom line.

In general, only a few teams in a given year legitimately do not make a profit. Most books are not open, but I vaguely recall the Lions, Bengals and Dolphins as franchises that did not make a profit three years ago. (The Bengals barely lost money, the Dolphins lost roughly $1m and the Lions lost roughly $3m but in fairness they were 0-16 and the local economy collapsed.)

Above and beyond those revenue sources are how you, as an owner, can influence areas around your stadium. The Vikings campaigned hard for a site in the suburbs. They did this because their owner obtained an option to purchase parcels around that site for resale. In essence, the stadium deal, which would be publicly finance, was basically a way for him to generate significant revenue off of a real estate deal.

As for the EPL, I think you're right. But then again, I look at MLB in the US and people follow that league like sheep. Same with the NBA. Over the long haul, I think our entertainment options are so diverse, and only becoming more so, that sports leagues will have to institute salary like caps to create the perception that their product is competitive, or they will not survive.

[notahomer]

LOL not sure of the socialist label as that is a bit deep for a football board but in the NFL cities were outbidding for teams with stadium deals down in the US. Not quite like that here in the CFL.
If you at the Eng. Prem. League it is clear that the haves win and the have nots lose. Not a good scene for the future.

A lot of interesting observations for two sentences.

The NFL does operate on a socialist plus model. In the NFL, each team shares base revenue, including national and international television revenue equally. This in and of itself is generally enough to get you close to profitability in all but a few instances. In addition, all licensing revenue that falls under the umbrella of NFL Properties and all licensed use of NFL league and individual team logos are shared equally as well.

Gate revenue is a 60/40 split for home and away.

Above and beyond that, however, whatever you can make as a club, you make as a club. Luxury box revenue, sponsorship naming rights, local radio and preseason television contracts, and whatever you can squeeze out of your local municipality in terms of how to generate revenue from your stadium and game day operations is yours to keep. To that end, NFL teams are encouraged to squeeze local municipalities for as much of a percentage of revenue from the stadium as they can to enhance their bottom line.

In general, only a few teams in a given year legitimately do not make a profit. Most books are not open, but I vaguely recall the Lions, Bengals and Dolphins as franchises that did not make a profit three years ago. (The Bengals barely lost money, the Dolphins lost roughly $1m and the Lions lost roughly $3m but in fairness they were 0-16 and the local economy collapsed.)

Above and beyond those revenue sources are how you, as an owner, can influence areas around your stadium. The Vikings campaigned hard for a site in the suburbs. They did this because their owner obtained an option to purchase parcels around that site for resale. In essence, the stadium deal, which would be publicly finance, was basically a way for him to generate significant revenue off of a real estate deal.

As for the EPL, I think you're right. But then again, I look at MLB in the US and people follow that league like sheep. Same with the NBA. Over the long haul, I think our entertainment options are so diverse, and only becoming more so, that sports leagues will have to institute salary like caps to create the perception that their product is competitive, or they will not survive.

Thank- you Cromartie for expanding upon what I was getting at. Also, even stuff like restricting rookie contracts and the franchise tag. I realize those were collectively bargained, but still in a true free market, wouldn't the highest bidder just get to offer what they wanted?

Thankfully, IMO, that is not the case. I think the fact NFL franchises are some of the most successful businesses AND they operate under revenue sharing etc...

I also do think things should be done to limit 'free-riding'. All 32 teams deserve to be competitive. In a way it is in your interest to field a competitive team simply becuase you get playoff revenue.

You have to wonder how much longer the 'individual' NFL owner will be around? Groups of millionairs and/or gigantic corporations maybe the owners of the future as how many interested billionaires will be able to take on these franchises if/when the current owners decide to get out of the business.....

[Toppy Vann]

Yes, the leagues have to do something to keep the haves from overpowering the have nots. Eng. Premier League is talking on this.

CNN did a story on which of the major Eng. and European clubs got the biggest bang for their buck and if IIRC it was Real Madrid or a Serie A team and by quite a wide margin (based on what they paid their players only and how deep in Europe they went in club play as well as league play).

CFL is not dissimilar and they have their SMS of course. If teams with tons of money in the CFL were to be let loose it would no doubt result in one or two teams winning big and others losing all the time. That would be bad. The CFL problem is really how to grow the game and expand into more cities and not face retrenchment with teams failing. I really hope that Quebec City gets a CFL franchise and that would be great for Montreal and good for the league. Not sure of the local support for Ottawa but more teams is a good thing. Not sure about the Moncton situation with no teams between them and Montreal but if it works no problem. Could Ontario support another team or Saskatoon or Victoria? Two teams work well in Alberta.

Not sure I'd term NFL or CFL with any socialism label as the ownership is really private ownership but they are all operating franchises of the league. You might label the giveaways to teams for stadium deals as corporate welfare which is seemingly accepted as counties built stadiums that would bring in teams or gov'ts incent business with tax breaks.

[notahomer]

...
Not sure I'd term NFL or CFL with any socialism label as the ownership is really private ownership but they are all operating franchises of the league. You might label the giveaways to teams for stadium deals as corporate welfare which is seemingly accepted as counties built stadiums that would bring in teams or gov'ts incent business with tax breaks.

I dont disagree with your points either Toppy Van. I think a lot of those 'labels' are just that made up things that don't really apply to the descriptions one might learn in an economics textbook. Its like a lot of the so-called P3's that operate in our fair province now. Its a public/private partnership, IOW, if theres money to be pocketed, its a private company but if things aren't working out, its still funded by taxpayers.