While major stock market indices just posted their worst years since 2008, major sports leagues like the NBA and the NFL reported record years of revenue and their highest-valued franchise sales ever in 2022.
According to one industry expert, those sales likely aren’t slowing down any time soon.
“I do think if some of those teams [for sale] trade, we will see another milestone year,” Bill Mulvihill, head of U.S. Bank Sports and Entertainment Group, told Yahoo Finance. “I don’t have any reason to believe we’re going to see a pullback in valuations.”
The record $4.65 billion sale of the Denver Broncos by Walmart (WMT) heir Rob Walton pushed sports franchise valuations to new highs in 2022.
This year, there are even more high-value sports teams for sale, including MLB’s Los Angeles Angels of Anaheim and Washington Nationals, Premier League’s Manchester United, and NFL team Washington Commanders.
According to Forbes, the Commanders could sell for more than $7 billion, which would dwarf the previous record set by Walton’s purchase of the Broncos.
Mulvihill, like other industry experts, attributed rising sports valuations to the industry’s growing relationship with Big Tech.
In 2022, Apple (AAPL) broadcasted MLB games and committed roughly $2.5 billion to Major League Soccer (MLS) over the next decade. The NFL entered into a $1 billion annual contract with Amazon (AMZN) and gave exclusive streaming rights for its NFL Sunday Ticket to YouTube (GOOG) for an estimated $2.5 billion.
“We knew sports and entertainment was valuable around live eyeballs,” San Francisco 49ers President and Elevate Sports Ventures Chairman and CEO Al Guido told Yahoo Finance. “We didn’t know how valuable it was once you were able to cut the cord. That was really the only sticky thing left from an eyeball perspective.”
Media is a main driver of sports revenue, accounting for more than 50% of most teams revenue, according to Mulvihill. In a league like the NFL, where national broadcast revenue is distributed evenly, it’s easy to see the revenue growth and therefore potential return on investment.
Last year, the Green Bay Packers reported shared media revenue of $347.3 million. With expenses of about $501 million, the Packers were 70% of the way to profitability before the regular season even began. Billion-dollar deals with companies like Amazon and Google (GOOGL) push those team valuations up even higher.
“It’s not like you’re buying into crypto or an internet stock where there’s nothing there,” Michael Rapkoch, founder and CEO of Sports Value Consulting, told Yahoo Finance. “There’s actually something there. Revenues are rising. Attendance is still strong.”
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Josh is a reporter and producer for Yahoo Finance.
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