While the world increasingly embraces electronic gaming, the ownership of sports franchises remains a high-stakes game of Monopoly for the wealthy. Despite the ever-increasing costs of entry, individual ownership still dominates the landscape. Out of 121 major league professional sports franchises, only a small fraction are controlled by corporations.
Many owners often claim financial losses, which might explain the reluctance of shareholder-driven companies to acquire teams. However, the prevailing sentiment suggests that sole owners are hesitant to sell due to the unique enjoyment and prestige associated with sports ownership – a welcome diversion from their usual business endeavors.
So, what exactly are these franchises worth?
Unlike traditional businesses, the value of sports franchises hinges on their revenue-generating potential. This stems from several factors. Within a league, teams don’t directly compete with one another financially. Operating expenses are generally consistent across teams. Revenues tend to fluctuate based on on-field performance, stadium capacity, and the size of the home market. Moreover, all teams in a league benefit equally from lucrative national broadcasting rights.
While estimated values vary significantly between sports, franchise values within a specific league tend to be relatively clustered, with a few notable exceptions.
NFL franchises lead the pack in terms of value, with the Washington Commanders previously topping the charts as the first American sports franchise to surpass a billion dollars. Football’s dominance is evident, as 32 of the top 33 most valuable franchises are NFL teams. The New York Yankees are the sole exception. Even the lowest-valued NFL team, the Arizona Cardinals, boasts a considerable worth.
The Los Angeles Lakers, a prized NBA asset, are valued which places them in a similar range to MLB’s Los Angeles Dodgers and New York Mets. One could theoretically trade the top NFL teams to acquire the entire NBA. That’s roughly equivalent to $7.6 billion.
The first NHL team on the list, the Detroit Red Wings, is valued but that exceeds the Detroit Tigers. In fact, the range represents the most common price point in sports, with a substantial mix of NHL, NBA, and MLB teams falling within this bracket.
Ultimately, the value of any asset, whether a sports franchise or any other entity, is determined by what someone is willing to pay. The undeniable allure of owning a sports team constitutes its true and intrinsic value.