Sports franchises are good business, you should ask the billionaires who own these gigaclubs. Since 1960, sports franchises have returned 13.1 percent annually, well ahead of the U.S. stock market (10.54 percent return over the same period). In other words, every $1 invested in a sports franchise since 1960 would be worth $2,640 today.
The NFL sucks
Between 2020 and 2022 a Dallas Cowboys is a New England Patriots combined, they made more money than the 30 Major League Baseball (MLB) teams combined over the last three seasons. It is no coincidence, then, that private capital will soon seep even further into the NFL, as it is already doing in the case of MLB, NBA, NHL and soccer. One of the main reasons Wall Street is eager to get into soccer is the league’s unparalleled profitability.
And to go on about the greatness of Dallas,
In 2023, the Cowboys generated $550 million in profits, more than the league’s next-ranking New England Patriots ($250 million) and LA Rams ($243 million) combined.
Among the 25 most profitable sports teams in the world – based on the data compiled by Forbes – 13 are in the NFL, 6 teams from the English Premier League are represented, there are also six from the NBA and even a Bundesliga football team managed to climb onto the list . Moreover, the dominance of the NFL is far from over, according to the news, in the future, more teams may fight their way up to the elite list after seeing the increase in results.
Image: Economx
The NFL is producing crazy results: The Dallas Cowboys and New England Patriots have combined operating income of $1.83 billion over the past three seasons, compared to the total of $1.76 billion for the entire MLB in the three-year period through 2023.
The average operating income of the top 25 teams is $378 million, up 7.7 percent from last year. Two teams newly added to this year’s list – that is Atlanta Falcons and it is Arsenal – reached the top via opposite routes:
the NFL team has reduced the amount spent on players by nearly $100 million since 2019, and the English league club has increased its revenues by $130 million over the past three years.
This is partly due to his excellent performance on the pitch, as well as the fact that he earned $30 million by reaching the last 16 in the Europa League.
As for basketball, the NBA is very close to signing a new national media deal that could reportedly triple its value. For basketball teams, from a profit perspective, the question would be how much tax they would be willing to pay.
Past success and brand name push the best
As you can see, the NFL’s Dallas Cowboys are the most valuable club in the world 11 billion dollars with its value. The team was purchased by Jerry Jones for $150 million in 1989, and although its value growth was slower at first, the Cowboys’ valuation has increased by 80 percent over the past five years.
A Golden State Warriorsnak they will have problems in the future, because according to the American sports press, they will pay a huge luxury tax, which could knock them off the top of the list due to a drop in net income.
The LA Rams he capitalized on his recent success by appearing in the 2020 and 2022 Super Bowls, winning the latter for the second time in franchise history. However, the Rams had a history in Los Angeles even before that, but their current shine is largely due to the move back into the media market and the modernization of their stadium.
The New England Patriots are a member of the NFL’s AFC East division and have won 6 Super Bowl titles since 2002, making them the NFL’s most successful franchise. Tom Brady has made the Patriots a world-renowned and recognized team, generating an unfathomable amount of revenue for the club.
In the American baseball league New York Yankees started from the big New York market, but later became a global brand, as they succeeded in launching their famous logo, which can be found on products all over the world.
Real and United are among the best
Two European football teams were included in the narrow elite, the Real Madrid and the most valuable European team in the sport. Operating income (before disposal of fixed assets) for the 2023/24 financial year was €1.073 billion, an increase of €230 million (27 percent) compared to the 2022/23 financial year. During this period, despite the stadium not being fully functional, the club managed to eclipse one billion euros in operating income before the sale of fixed assets. This is an unprecedented figure for any football club.
There was an increase in all businesses except broadcasting rights, where LaLiga’s revenues in 2023/2024 were lower than in the 2022/23 season. However, the improvements in marketing and the stadium are particularly noteworthy.
As a result of the profit obtained, the club’s net asset value increases year by year, a total value of 574 million euros was registered on June 30, 2024.
The other elite club is a Manchester United. At first, this sounds strange, since the team has not achieved a major result either in the championship or in the European Cup round since time immemorial. But the club has long been considered one of the biggest brands in the world, and their long-term contract with Adidas, as well as many other partnership contracts, is driving business in an extraordinary way.
The Glazer family, which owns the club, recently sold 27 percent of the business to billionaire businessman Sir Jim Ratcliffe, who paid about $1.3 billion for his stake. After Ratcliffe’s arrival, he embarked on severe cost-cutting measures, resulting in over 250 job cuts at the club. The head of INEOS also announced that from now on, mindless spending is over, they will not spend 80-10 million euros on worthless players.
So, in addition to trying to professionally put the team back on the football map, the new management has set a primary goal of steering Manchester United, which was sinking into one, back onto an economically viable path.
Source: www.economx.hu
