Post by matsellah on Oct 15, 2021 5:40:52 GMT -6
Average Team Value Soars To $3.5 Billion As League Shrugs Off Pandemic Year Primary Forbes Article
(if you hit a paywall, it's because you've viewed too many Forbes articles Try This One
it's not as detailed but the basic information is there)
With lucrative new media deals and some fruitful investments, the NFL’s 32 teams are worth 14% more than last year on average as the Dallas Cowboys hold on to the top spot at $6.5 billion.
Disregard the NFL’s 20% drop in revenue during the pandemic-impacted 2020 season, to an average of $381 million per team. Forget that operating income (earnings before interest, taxes, depreciation and amortization) plummeted to an average of $7.1 million a team, from $109 million the previous season. The fact is, money came raining down on the NFL over the past year, pushing the value of the average team up 14%, to $3.48 billion, the biggest gain in five years.
In March, the NFL signed $111.8 billion in media rights deals ($112.6 billion including the ESPN payment for extending Monday Night Football a year through 2022 and money received from broadcasters for additional regular-season and playoff games); that represented an 82% average annual increase over the current deals. As a result, the national media rights payout to each of the league’s 32 teams is going to increase from $220 million this season to $377 million in 2032. And that’s not even counting the NFL Sunday Ticket deal with DirecTV, worth an average of $1.5 billion annually through 2022.
In March, the NFL signed $111.8 billion in media rights deals ($112.6 billion including the ESPN payment for extending Monday Night Football a year through 2022 and money received from broadcasters for additional regular-season and playoff games); that represented an 82% average annual increase over the current deals. As a result, the national media rights payout to each of the league’s 32 teams is going to increase from $220 million this season to $377 million in 2032. And that’s not even counting the NFL Sunday Ticket deal with DirecTV, worth an average of $1.5 billion annually through 2022.
Then there’s the NFL’s venture capital arm, 32 Equity, which has also been scoring. Each NFL team kicked in $1 million to launch 32 Equity in 2013 and has since put in another $3 million or so. Profits from 32 Equity have been reinvested rather than distributed to the teams, but the portfolio has generated average annual returns in excess of 30% and is now worth well over $100 million per team, according to team executives who requested anonymity. Among 32 Equity’s investments: Fanatics (sports merchandise), Skillz (mobile gaming), Genius Sports (sports data and technology), Clear (biometric identity verification), Hyperice (athlete recovery devices), Sportradar (sports data and technology), On Location (luxury event hospitality) and Mythical Games (gaming technology studio).
The NFL’s Growing Media Pie
The NFL’s new national media rights deals are worth $111.8 billion. Below is the payout (in millions) to each of the league’s 32 teams for each season through 2032. The league’s Sunday Ticket deal with DirecTV is not included.
One reason the NFL’s investments shine is that its brand and content allow the league to secure favorable investment deals, akin to what Amazon does with its vendors. For example, when Genius Sports became the official betting data source for the NFL in April, it agreed to issue up to 22.5 million warrants in addition to the cash it paid the league, entitling the NFL to purchase one ordinary share of Genius for $0.01 each. The warrants will be subject to vesting over the six-year term of the licensing agreement, with the first 11.25 million warrants to be vested immediately upon issuance.
The value of the league’s investments stand out in the Green Bay Packers’ financial statements. For the 2020 season, the team reported an operating loss (including depreciation) of $38.8 million but net income of $60.7 million thanks to $120 million in mostly unrealized investment gains.
League insiders tell Forbes that the NFL is on the verge of starting something even bigger, sort of a 32 Equity writ large—the formation of a new company in which the league will own a majority stake but will be funded by outside investors that could include companies like SoftBank and sovereign wealth funds. Other partners could potentially include existing media partners or tech companies like Apple and Twitter. The NFL’s contribution to this new company would be assets that could become much more valuable with help from partners with expertise in distribution and content creation. To kick things off, the league could potentially put in its NFL Films library, the NFL Network and the league’s deals with DraftKings, FanDuel and Caesars Entertainment.
“Lots of league assets could be leveraged up with outside money,” one team owner tells Forbes. The NFL Network, for example, generates between $1.5 billion and $2 billion in annual revenue, yet it is carried on the league’s books at zero.
The value of the league’s investments stand out in the Green Bay Packers’ financial statements. For the 2020 season, the team reported an operating loss (including depreciation) of $38.8 million but net income of $60.7 million thanks to $120 million in mostly unrealized investment gains.
League insiders tell Forbes that the NFL is on the verge of starting something even bigger, sort of a 32 Equity writ large—the formation of a new company in which the league will own a majority stake but will be funded by outside investors that could include companies like SoftBank and sovereign wealth funds. Other partners could potentially include existing media partners or tech companies like Apple and Twitter. The NFL’s contribution to this new company would be assets that could become much more valuable with help from partners with expertise in distribution and content creation. To kick things off, the league could potentially put in its NFL Films library, the NFL Network and the league’s deals with DraftKings, FanDuel and Caesars Entertainment.
“Lots of league assets could be leveraged up with outside money,” one team owner tells Forbes. The NFL Network, for example, generates between $1.5 billion and $2 billion in annual revenue, yet it is carried on the league’s books at zero.
Profitable Partners
The NFL’s new media deals all begin in 2023, except for its deal with Amazon, which begins in 2022.
All of this will further drive up team values, of course, further limiting the number of people who can afford to buy an NFL team. To make it easier for new investors to enter the owners’ club, the NFL recently and very quietly doubled the debt limit for buyers of teams to $1 billion, from $500 million.
The Dallas Cowboys, worth $6.5 billion, top our ranking for the 15th consecutive year. The Cowboys generate the most revenue ($800 million) and operating income ($280 million) in the league by a mile. Owner Jerry Jones is the league’s consummate salesman, and the team’s more than $200 million in combined sponsorship and advertising revenue is easily tops in the NFL. But the biggest one-year increase in value belongs to the Tampa Bay Buccaneers, who are up 29% and whose brand has been reborn with last season’s Super Bowl run. The Bucs have seen a surge in season-ticket and merchandise sales since the arrival of Tom Brady in March 2020 and pushed through significant ticket-price increases for the 2021 season.
You'll have to hit the link to see the rest of the teams. If you ain't got time...
7. Chicago Bears
All of this will further drive up team values, of course, further limiting the number of people who can afford to buy an NFL team. To make it easier for new investors to enter the owners’ club, the NFL recently and very quietly doubled the debt limit for buyers of teams to $1 billion, from $500 million.
The Dallas Cowboys, worth $6.5 billion, top our ranking for the 15th consecutive year. The Cowboys generate the most revenue ($800 million) and operating income ($280 million) in the league by a mile. Owner Jerry Jones is the league’s consummate salesman, and the team’s more than $200 million in combined sponsorship and advertising revenue is easily tops in the NFL. But the biggest one-year increase in value belongs to the Tampa Bay Buccaneers, who are up 29% and whose brand has been reborn with last season’s Super Bowl run. The Bucs have seen a surge in season-ticket and merchandise sales since the arrival of Tom Brady in March 2020 and pushed through significant ticket-price increases for the 2021 season.
You'll have to hit the link to see the rest of the teams. If you ain't got time...
7. Chicago Bears
- Value: $4.075 billion
One-Year Change: 16%
Owner: McCaskey family
Operating Income: –$3.6 million
Yes, that's a negative number.
