Cowboys lead to $ 6.9 billion – Sportico.com
The Denver Broncos have yet to hit the bidding block, but it’s coming. Potential bidders are already surrounding the team which was put in trust in 2014 by owner Pat Bowlen, who suffered from Alzheimer’s disease and died in 2019. His seven children cannot settle on a chosen successor. , and while there is a distant scenario where 31 – 1-year-old Brittany Bowlen takes control, the near universal expectation is that the Broncos will hit the market after the 2021 season.
The price will break an NFL team’s previous sales record – $ 2.28 billion for the Carolina Panthers in 2018. Bowlen paid $ 78 million for the Broncos in 1984, but a long-time owner of the NFL speculated that the price is more likely to start with a 5, than a 3, such as billions, which would more than double the previous high point. Sportico cautiously values the team at $ 3.8 billion, 11th among 32 franchises.
The Dallas Cowboys are the NFL’s most valuable team for a second straight year at $ 6.92 billion, despite just four playoff wins in the past quarter century. America’s Team is worth nearly double the NFL’s average of $ 3.5 billion, a 13% increase from last year. Collectively, the value of NFL franchises, including team-related businesses and owner-owned real estate, is $ 112 billion.
Sportico Projects NFL teams will generate $ 550 million per team in revenue this season on average, assuming the league plays a full 17-game schedule with fans in attendance. With a season full of stadiums, the Cowboys are expected to be the first North American sports team to post $ 1 billion in annual revenue.
Sportico spoken to over 30 people in teams, banks, law firms, and consulting firms that do business with the NFL, and the overwhelming consensus: Business is booming. What’s not to love with $ 113 billion in new media deals and a collective agreement that almost ensures peace at work until the end of the decade? TV ratings and earnings are the envy of all sports leagues, and the league is also in the cat seat for the gaming rush to come.
“The NFL widened the gap between itself and all other sports leagues during COVID,” said Marc Ganis, who serves as a consultant for several NFL teams. “It’s really like Amazon and Apple. This is where the NFL is as a business.
A 13% gain in value may seem modest for the most stable and profitable sports league when bitcoin is up 500% in the past year; meme / Reddit actions like GameStop quadruple in two days; and Major League Soccer teams with minimal income sell for $ 400 million and up. But the percentage represents an average increase of $ 415 million per franchise over 12 months.
All 32 teams share the dominant position of the NFL in media, domestic sponsorships and gambling, which will result in an expected distribution of $ 400 million, per team, from the NFL in 2023 when the new TV deals enter. in force, up from $ 309 million last year. By that time, almost all teams will generate at least $ 100 million in annual cash flow, with the top performing teams north of $ 200 million. So even the Cincinnati Bengals, almost universally seen as the least valuable NFL team, could make $ 2.4 billion in the open market, more than all but seven MLB teams.
NFL Team Sales
NFL franchises hardly ever go on sale – the Panthers are the only team to have changed hands in the past seven years, and the previous three sales were in Buffalo, Cleveland and Jacksonville, all of which are among the franchises. seven less valuable.
The average length of ownership of the NFL, at 40, is double that of other major American sports leagues. Speculation swirled that Carolina would attract bids of up to $ 3 billion when Jerry Richardson auctioned off the club in late 2017, but they did not materialize, and David Tepper nabbed the team for 725 million dollars less. The Broncos will be a litmus test of how far the price of an NFL franchise can go.
“You need two whales who want it,” said one banker. “It won’t happen everywhere, but there is a chance it will happen in Denver. “
Tepper was the only “whale” to emerge in Carolina, and the NFL conducted a post-mortem review on the selling process and its ownership rules. The adjustments included ending the long-distance ownership ban, which prevented owners from having non-NFL teams in markets with NFL clubs. Debt limits were also increased from $ 150 million to $ 500 million for an acquisition. This year, the league approved up to $ 1 billion in debt to acquire a controlling stake. Fitch Ratings ranks NFL-linked bond issues with high credit ratings of A + or A, and Chad Lewis, senior director of Fitch, said Sportico the outlook is “very stable” based on ABC and media agreements.
The NFL requires the primary owner to own at least 30% of the team’s shares, and the ban on corporate ownership and private equity investments means a small pool of capable and interested buyers, despite the hike stock markets; there is almost no interest in NFL ownership by people outside of North America. Raising the $ 200 million LP stakes is a lot trickier than the $ 20 million when you’re getting next to nothing for that part of the team.
“There are a lot of billionaires who want to invest in sports, and the NFL is the least risky,” said a prominent sports banker. “But the problem is, the prices are going up so high that the number of people who can actually bid is tiny.”
So, despite price inflation in MLS, bitcoin and elsewhere, most bankers believe that NFL teams are still worth 5.5-7 times earnings under current ownership requirements, similar to earnings multiples of these. years, with the Broncos at the top of the ladder.
NFL fans can’t wait to return to games after a year of absence; overall attendance fell 93% in 2020 due to COVID-19 restrictions. This season’s 92% membership renewal rates were a five-year high, and resurgent teams like the Cleveland Browns topped 99%. Tampa Bay, which has struggled to sell tickets in recent years, sold its ticket inventory over the summer at a premium of up to 45% after its Super Bowl title. The Bucs are worth $ 2.8 billion, up 22%, and rank 25th, by Sportico‘s account, with the Browns one place behind at $ 2.73 billion, up 16%.
For SporticoInteractive NFL 2021 Franchise Reviews, click here.
With media deals and ticket revenues stalled, the next wave of revenue opportunities is forming. Four years ago Commissioner Roger Goodell said: “We are not changing our position on legalized sports betting. We still don’t think this is a positive thing. It’s safe to say the “position” has changed and the league is on top.
In April, the NFL announced its first sports betting partnerships in the United States with Caesars Entertainment, DraftKings and FanDuel; the league then added Fox Bet, BetMGM, PointsBet and WynnBet as approved advertisers during matches. The New Orleans Saints announced a 20-year stadium rights deal with Caesars in July, 12 months after the Raiders named their new $ 1.9 billion Las Vegas stadium after moving from Oakland. The NFL has granted Genius Sports the exclusive right to distribute game data to sportsbooks around the world, as first reported by Sportico. The six-year deal tripled Sportradar’s previous cash payment, according to a source, and it included an equity component worth $ 475 million based on the company’s recent share price. .
Local teams’ income from sports betting, casinos and daily fantasy has tripled over the past three years and is now a nine-figure business, with some teams generating as much as $ 10 million in revenue per year. This is just a taste of the revenue direction as legalization spreads and gaming opportunities become more pervasive around the action of the game. In January, the Washington football team became the first NFL team to be licensed in sports betting, thanks to a partnership with FanDuel in Virginia. The club just got another license in Maryland.
The NFL on TV
The NFL entered negotiations with the media from a position of strength with 73 of the 100 most watched shows in 2019, according to Nielsen. This allowed the NFL to get an opt-out option after seven years if it finds a more lucrative or advantageous option.
The last major component of the NFL media package is the Sunday Ticket. DirecTV’s $ 1.5 billion a year deal expires after the 2022 season, and the service provider’s parent company AT&T has indicated it will not renew. The league is expected to announce a new partner early next year.
“I think Sunday Ticket could be tied to maybe the biggest media deal out there, which sells a percentage of NFL Media,” media rights consultant Lee Berke said in a phone interview. Goldman Sachs was hired this year by the NFL to sell a stake in its media business, which includes NFL Network, RedZone and NFL.com. Berke believes that Disney / ESPN, Comcast / NBCU, and ViacomCBS could bid for both NFL Media and Sunday Ticket, given their current status as League media partners, but that Apple and Amazon are offering resources beyond the simple production and distribution. Amazon already has a relationship with the league; he signed a 10-year contract in March to broadcast Thursday Night Football. Apple is developing its sports division.
Berke believes there are many ways for a powerful partner to help the NFL further exploit its content, nationally and globally, and he expects the Sunday Ticket rights alone could represent 2, $ 5 billion a year. “When it comes to a stake in NFL Media, you’re more than buying a game pack that has an end date, you’re buying a long-term relationship with the biggest sport in the richest economy. of the world, “he said. .