The Dallas Cowboys in 2013 became the first American professional sports franchise to hit the $3 billion mark — as in, Jerry Jones’ franchise is now worth an astounding $3.2 billion. That’s enough to make the team that has become somewhat of a perennial disappointment the second-most valuable sports franchise in the world, after only the $3.4-billion Spanish soccer club Real Madrid. The Cowboys brought in a cool $560 million in operating revenues last year, $246 million of which was profit.
The rest of the NFL isn’t quite that valuable, but the other 31 teams aren’t struggling either. According to Forbes’ team valuations released this week, the average NFL franchise is now worth $1.43 billion after a 23-percent increase in 2013, the largest year-over-year jump since 1999. Three other franchises — New England, Washington, and the New York Giants — are worth at least $2.1 billion, and just seven of the league’s 32 teams fall below the $1 billion mark. Even the least valuable franchise, the St. Louis Rams, is worth $930 million and hauled in an estimated $16 million in operating profits in 2013.
Forbes’ numbers are just valuations — sales and financial documents have shown that sometimes the true values and profits are higher — but life is clearly good in the owner’s boxes around the league. The biggest reason for this continued growth is TV, where the NFL is bringing in record revenues and, thanks to new deals, will continue to see those numbers escalate.
The single-year jump only adds to already skyrocketing values. Between 1998 and 2008, NFL franchises increased in value by 360 percent, according to University of Chicago economic professors Kevin M. Murphy and Robert H. Topel. TV isn’t the only reason that has happened. Another factor, one that Forbes also noted and that should cause these rising values to draw more public attention, is the value of the NFL stadiums and the revenues they are generating. The NFL, like other leagues, has seen a boom of new stadium construction in the last decade-plus, and new stadiums have allowed teams to generate more revenue through seat licenses, naming rights, and other factors. Of course, they’re almost always doing it with the help of public money.
Indeed, the Cowboys moved into the $1 billion AT&T Stadium in 2009. It was built with the help of more than $300 million in public funds. Others have done and continue to do the same.
And while Forbes points out that there is “a widening wealth gap in the NFL” in part “due to the piles of cash big market teams generate from modern stadiums,” those in the bottom half ought not worry too much. At least two of them — St. Louis and Oakland — are at the end of lease deals and are asking their home cities or any other for new or renovated stadiums. The Atlanta Falcons, valued at $1.125 billion, will get at least $200 million from the city for their new stadium. The Buffalo Bills, another member of the less-than-a-billion club, are about to be sold and, amid fears that new owners might ship them across the border to Toronto when the current stadium lease ends, will likely get public money for either renovations or a new stadium. The San Diego Chargers will want a new stadium soon. Other teams, like New Orleans and Cincinnati, are benefiting from new lease agreements with their hometowns or are asking cities to hand over naming rights and other revenue generators.
The benefit of publicly financed stadiums and the sweetheart deals that often accompany them is huge for owners in all sports. New stadiums built in this spree of public financing have helped double the value of American sports franchises since the turn of the century, Bloomberg reported last year. In other words, the massive public commitments that rarely have sizable economic returns for taxpayers and their cities have helped generate huge benefits for the men who own these teams. And, in cohort with massive TV revenues, they only appear poised to continue doing so in the near future.
There are other factors for rising growth. The owners certainly aren’t hurt by the friendly collective bargaining agreement that resulted from the lockout they orchestrated prior to the 2011 season. At the time, owners were seeking a huge cut to the share of the league’s $9 billion in revenues that went to player salaries, and though they didn’t claim a victory as massive as the NBA owners who followed in their footsteps just months later, they were able to extract concessions that made owning an NFL team even more lucrative than it already was.
So bookmark these figures. Next time an owner comes calling on a city council or state government for massive subsidies to finance a stadium, remember how much that means to his personal finances. And a few years from now, when the current collective bargaining agreement expires, remember these numbers if owners decide to jeopardize the start of football season with another labor dispute. As a University of Oregon business professor told Deadspin when it obtained Carolina Panthers financial documents last year, “These franchises are a license to print money.” That’s true in part because owners have gotten so good at asking the public and players for more and more of it.