Acquiring a professional sports team is the latest investment strategy sweeping the market these days. Look no further than former Microsoft CEO Steve Ballmer purchasing the Los Angeles Clippers for $2 billion, or Donald Trump and Bon Jovi showing interest in the Buffalo Bills. The reason for this is simple: professional teams are huge moneymakers, especially in the National Football League.
Are you ready for some profits? The average NFL team is currently worth $1.43 billion, up 23 percent from last year, according to a new report from Forbes. That is the highest amount in the 17 years Forbes has tracked NFL team finances, and the biggest annual increase since 1999. For the 2013 season, the average NFL team raked in record revenue and operating income. In comparison, Major League Baseball teams have an average value of $811 million, followed by the National Basketball Association at $634 million.
“There is a widening wealth gap in the NFL due to the piles of cash big market teams generate from modern stadiums and the premium a buyer would be willing to pay for entry into the most elite U.S. sports league in a big city,” explains Mike Ozanian, staff writer, Forbes. “The value of the New York Jets, Philadelphia Eagles, Chicago Bears, and San Francisco 49ers each rose by at least 30 percent during the past year.”
Let’s take a look at the ten most valuable NFL teams for 2014, according to Forbes. Values were calculated using enterprise value (equity plus debt) and multiples of revenue based on stadium economics.