{"id":1054,"date":"2016-11-22T00:00:00","date_gmt":"2016-11-22T00:00:00","guid":{"rendered":"https:\/\/leadersinsport.com\/sport-business\/reports\/what-is-driving-the-growth-in-nfl-team-valuations\/"},"modified":"2022-03-17T18:53:17","modified_gmt":"2022-03-17T18:53:17","slug":"driving-growth-nfl-team-valuations","status":"publish","type":"article","link":"https:\/\/leadersinsport.com\/sport-business\/articles\/driving-growth-nfl-team-valuations\/","title":{"rendered":"What is driving the growth in NFL team valuations?"},"content":{"rendered":"\n\n
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\n Nov 22, 2016 <\/p>\n \t\t\t\t\t\t\n\t\t\t\t\t\t\t<\/span>Articles<\/a>\n\n\t\t\t\t\t\t

What is driving the growth in NFL team valuations?<\/h1>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\n \n\t\t\t<\/div>\n\t\t<\/div>\n\n\t<\/div>\n<\/div>\n
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an article by SportBusiness International<\/p>\n \n \n \n

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An article by<\/em>\u00a0
\n<\/a><\/strong><\/p>\n

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SportBusiness International (Original Publication date: \u00a0October 2016)<\/em><\/p>\n

Team values are continuing to soar in the NFL. Barry Wilner asks what is behind the continuing success of the North American League and whether it will continue.<\/h4>\n
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NFL commissioner Roger Goodell has announced the objective of reaching $25bn in revenues within the next decade and America\u2019s most popular league seems well on the way to such a lofty goal.<\/p>\n

The numbers crunched by business magazine Forbes this year on each of the 32 teams\u2019 values are astounding.<\/p>\n

Yes, we expect the Dallas Cowboys to carry the flag for the sport \u2013 and pretty much every other sport, considering it is apparently worth more than any other franchise globally, including Real Madrid, Barcelona and Manchester United. But a value of $4.2bn? A full 25 per cent more than the NFL\u2019s next most valuable team, the New England Patriots?<\/p>\n

And consider the overall valuations. An NFL franchise comes in at an average worth of $2.34bn, an increase of 19 per cent in one year. The least valuable club, the Buffalo Bills, are tagged at $1.5bn, an increase of 13 per cent. So what\u2019s going on and will such significant increases continue?<\/p>\n

Audiences<\/strong>
\nThe first place to look is at the product itself and its attraction for commercial partners.<\/p>\n

\u201cIt is the appointment viewing,\u201d says Chris Curtin, chief brand and innovation officer at Visa. \u201cIt\u2019s harder and harder to aggregate audiences for live events, and the NFL still delivers that, not just once in a while, but every Sunday, every Monday night and now every Thursday night. The NFL still maintains that appeal of sitting down and watching the games as they occur.\u201d<\/p>\n

That element is crucial for advertisers, of course. While viewing audiences have become so fragmented for other TV programming, hardly anyone is sitting down to watch recorded NFL games at a later time. With the advent of fantasy football and its soaring popularity, plus the always present gambling element, Visa and all the other league partners are assured of large audiences.<\/p>\n

Viewership for live games actually fell by about 11 per cent in the first six weeks of the 2016 season, but Goodell cited a number of acceptable reasons for the dip \u2013 most notably two clashes with broadcasts of US presidential debates.<\/p>\n

Moreover, Curtin notes that the NFL performs well on gender diversity, attracting family viewing, with communities even hosting viewing parties. In America, other than perhaps the NCAA basketball tournament, better known as March Madness, and some rare one-offs, only the NFL has that kind of drawing power. \u201cWith the exceptions of the Oscars or the presidential debates, the point is well taken: sport is one of the remaining platforms that consistently delivers in a world with multiplicity,\u201d he says.<\/p>\n

Another element that makes the NFL so attractive is the devotion that fans carry for the sport. \u201cThe second thing is the NFL intersects well with elements we like to stand for as a brand, including passion,\u201d Curtin adds. \u201cThat is an equity within a brand that we would like to share and that Visa would like to exemplify, hopefully. There\u2019s such a big bond between the fans and the teams and the players. In that respect, you are seeing extraordinary and ordinary human beings that are relatable.\u201d<\/p>\n

Visa, the second-longest sponsor of the NFL behind Gatorade, also has deals with nine individual clubs: Atlanta, Baltimore, Buffalo, Cleveland, Denver, New England, San Francisco, Chicago and Jacksonville. Those affiliations are important, because they can reach hundreds of thousands of fans directly at the stadia.<\/p>\n

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“With the exceptions of the Oscars or the presidential debates, the point is well taken: sport is one of the remaining platforms that consistently delivers in a world with multiplicity”<\/h3>\n<\/blockquote>\n

Experience<\/strong>
\nMany believe that the TV experience is superior for the NFL than for any other US sports viewers, particularly when the weather gets dicey in locales ranging from Buffalo to Green Bay to Kansas City to Denver. But the league has been seeking ways to make the in-game experience at the ballpark something special. Sponsors want to be in on those efforts, too.<\/p>\n

\u201cThey have enhanced the experience of going to an NFL game that makes it attractive beyond what is being done on the field,\u201d Curtin says. \u201cIt can range from the way in which you get tickets or present them, or the ability to buy merchandise. It\u2019s become more and more sophisticated in the way people interact with them.<\/p>\n

\u201cTheir Twitter partnership (for streaming games) is somewhat remarkable. I have experienced that myself and it is a really compelling way in which they are doing that. Those are some of the dynamic and interesting things they are trying to do.\u201d<\/p>\n

It\u2019s not just sponsors and advertisers who find it imperative to be affiliated with the NFL. It runs true for the league\u2019s broadcast partners.<\/p>\n

That means DirecTV, Fox, CBS, NBC and ESPN for live television game coverage. It means SiriusXM Satellite Radio, too.<\/p>\n

The NFL product brings such a strong cachet that it can virtually establish a broadcast outlet as a viable entity. That happened with Fox on television nearly a quarter of a century ago and it has occurred with SiriusXM.<\/p>\n

\u201cFor us, they have really been a major tent pole in our programming,\u201d says Steve Cohen, SiriusXM\u2019s senior vice-president of sports programming. \u201cWe announced our deal with the league in 2003 and launched our Sirius NFL Radio channel in 2004. We also gave fans the ability to hear home and away broadcasts no matter where the listeners happen to be, and that was a groundbreaker for radio.<\/p>\n

\u201cFans are transplanted all over the country. It\u2019s hard to estimate the value of a local radio broadcast, except to say you don\u2019t get to watch a local TV broadcast of your team; everything is on national networks. The only way to truly keep in touch with your hometown team and with the experts who follow the team is through the local radio.\u201d<\/p>\n

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<\/p>\n

ESPN deliver their Monday Night Countdown broadcast on 14 November 2016 before the game between the Cincinnati Bengals and the New York Giant<\/h6>\n
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Uniqueness<\/strong>
\nAgain, there is a uniqueness to the NFL that works on multiple levels. Cohen also notes that SiriusXM\u2019s partnership with the league has led to other innovations, including establishing a fantasy sports channel that tends to draw more callers \u2013 and more subscribers \u2013 than any other sports outlet on satellite radio.<\/p>\n

\u201cWe track a lot of subscribers because of what we provide in our overall line-up,\u201d Cohen says, referring to a wide variety of music, talk and news channels. \u201cWe know the NFL is an important element and we know the strength of the NFL brand and loyalty of fans to their teams. If we give them a well-presented product, they will be happy to pay for radio.<\/p>\n

\u201cPlus, we are talking NFL all over our service, from Howard Stern to the music channels to all our different partner channels. It\u2019s really a sport that transcends.\u201d<\/p>\n

Will it continue? Business-wise, why not? Certainly there are some major issues, most notably preventing and treating concussions and head trauma for players. There\u2019s also the constant bickering over every topic between the players\u2019 union and the league.<\/p>\n

While hardly discounting those subjects, it\u2019s impossible to ignore the possibilities for the NFL in America and across the globe.<\/p>\n

\u201cWe can expect gross revenues from broadcasting to rise significantly,\u201d says Marc Ganis, a keen observer of NFL business as president of SportsCorp Ltd, a Chicago-based consulting firm. \u201cBut perhaps the most important reason for rising numbers overall is because the revenues the league will generate will come from all forms of partnerships. The NFL is the best-run business of any professional sports leagues worldwide and their partners recognise that.<\/p>\n

\u201cAs the league continues to explore the alternative means of distribution, it will find some big players in the digital space wanting to grab rights. It will create the ability to have a new meaningful revenue stream, much of it based on international viewership and use.\u201d<\/p>\n

Expansion<\/strong>
\nSuch countries as India, China and Brazil will be targeted by the NFL, which will provide digital coverage that should help spur merchandising and other marketing ventures. No need to stage live games in those countries \u2013 a logistical nightmare in such a condensed season for such a physical sport \u2013 when you can reach millions more potential fans through the web and social media, as well as with traditional broadcasting.<\/p>\n

\u201cThe NBA has done the best job of international expansion,\u201d Ganis notes. \u201cMajor League Baseball has done the best job in visual viewership. The NFL will become even more the sports league, taking the greatest advantage of digital distribution on a worldwide basis.\u201d<\/p>\n

Although Ganis believes some of Forbes\u2019 numbers are too high, he projects NFL valuations will continue to rise \u2013 and not just for the big shots such as the Cowboys and Patriots.<\/p>\n

If the Washington Redskins get a new stadium, their value \u201cwill soar,\u201d he says. The Falcons will move into a state-of-the-art facility in Atlanta next year. If the Chargers don\u2019t get a new stadium approved in San Diego, they could head to Los Angeles to join the Rams in their new arena, planned for opening in 2019. The Rams\u2019 value could double from the current $2.9bn by then.<\/p>\n

Should Las Vegas come through on its stadium proposal for the Oakland Raiders, including $750m in public funding, that franchise, worth $2.1bn now, will try to get approval from the rest of the owners to head to the desert.<\/p>\n

\u201cThe $25bn is achievable,\u201d Ganis says, \u201cbut will have to be subject to market conditions the league does not control.\u201d<\/p>\n

The way the NFL is going, it might be able to control those conditions, too.<\/p>\n<\/p>\n <\/div>\n \n \n \n <\/div>\n

\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n <\/section>\n","protected":false},"excerpt":{"rendered":"

Team values are continuing to soar in the NFL. 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