Analysis

NFL Remains on Top of the Sports World in Latest Team Valuations

NFL Franchise Growth

Throughout the last two decades, the business side of the NFL has grown exponentially. From the salary cap to TV contracts, the league has found ways to expand its financial footprint. One of the benefactors of that is the increased growth in franchise values.

As Walmart’s heir Ron Walton prepares to purchase the Broncos for a record $4.65 billion, the sale beats what David Tepper paid for the Carolina Panthers by more than double ($2.258 billion). That price is also 850% higher than what Arthur Blank paid for the Atlanta Falcons in 2002 ($545 million).

The latest team evaluations released on Monday by Sportico painted a picture of the NFL’s success and its 32-ball clubs. They are not only making more money than ever but they are also outpacing other leagues in doing so.

Heavy is the Crown

The sale of the Broncos was 47% more than the $3.16 billion Chelsea, a Premier League soccer club that touches every corner of the globe, fetched this spring. The previous team record price in sports was $3.3 billion for the 2019 sale of the Brooklyn Nets and operating rights to Barclays Center. The Broncos went for 41% more.

The growth which the league has seen is staggering. The average value of an NFL franchise is $4.14 billion, which is 18% higher than what Sportico calculated last year. The value of all of the franchises combined tops out at $132 billion. How are these franchises growing their net worth?

“There are a few ways,” said Joe Banner, Former NFL Executive and Founder of The 33rd Team, “and most of them are just maximizing what you already do as an organization. Selling merchandise, luxury boxes, and sponsorships are the easiest ways to accomplish that.”

The most valuable NFL franchise is unsurprisingly the Dallas Cowboys. Owned by Jerry Jones, they are valued at a whopping $7.64 billion, which also puts them atop all of the four major US sports. The next most valuable franchise is the New York Yankees, which slots $630 million behind the Cowboys. An astonishing stat comparing the NFL to the other three US sports leagues (MLB, NBA, and NHL) is how many are valued at over $4 billion. Half of the NFL (16 franchises) are valued at over $4 billion whereas only seven total (four MLB, three NBA) meet that threshold. 

The other four teams that were in the top five of the rankings were the Los Angeles Rams ($5.91 billion), New England Patriots ($5.88 billion), New York Giants($5.73 billion) and San Francisco 49ers ($5.18 billion). On the opposite side, the NFL only has four franchises with evaluations less than $3 billion: Buffalo ($2.99 billion), Jacksonville ($2.94 billion), Detroit ($2.86 billion) and Cincinnati ($2.84 billion).

Room to Grow

Owning the stadium and the land is another easy way. Teams only host 10-13 games per season meaning there are a lot of dates that the stadium can be rented out for concerts, the Final Four and even monster truck shows. Owning your own real estate can maximize the area as well. The Patriots, who have the third-highest evaluation, have a mall on-site that includes shops and restaurants. Teams are also working to build their connection with fans beyond home games. The Washington Commanders just launched a consent studio and the Atlanta Falcons will have one of their own in the coming months.

One untapped market that the NFL hasn’t tapped into as of yet is jersey sponsorships. The other three of the four major sports have embraced it, but the NFL has yet to do so. The league has been very cautious about who it lets infiltrate the league, as it just recently started partnering with sportsbooks and embraced sports betting.

They have in turn also said no to institutional money, which pairs directly with sponsorships. Some of the highest-valued organizations outside of the NFL have embraced the money, including the Los Angeles Dodgers and Golden State Warriors. As of now, the NFL has said no to these funds, but that day seems to be on the horizon, especially with teams that have stable ownership groups. Teams that have had the same ownership for at least 10 years can have people buy in for as little as 1%. One of the potential hangups could be the Green Bay Packers. Being the only publicly owned franchise in the league, they are required to report their financial results. The NFL is understandably hesitant to reveal more financial information to outside investors.

Tyler Forness contributed to this report.