Pandemic-Proof
Despite being blindsided by the coronavirus, the National Football League’s cash juggernaut powers on.
Despite being blindsided by the coronavirus, the NFL cash juggernaut powers on, with the average team worth more than ever in 2020. Those empty seats will be filled again someday, after all.
(Inset) Las Vegas Raiders owner Mark Davis
The NFL is back, bringing with it the two most expensive stadiums ever built: Stanley Kroenke’s $5 billion SoFi Stadium in Los Angeles and Mark Davis’ $1.9 billion Allegiant Stadium in Las Vegas (page 17). The venues were the capstones of two franchise relocations and helped turbocharge those teams’ values: The Los Angeles Rams are now worth $4 billion, up 176% in five years; the Las Vegas Raiders are up 117% over the same period, to $3.1 billion.
Unfortunately, SoFi and Allegiant opened in front of empty seats and vacant boxes, as virus restrictions will keep fans in both cities absent all season. Still, the Rams’ and Raiders’ valuations are both up yearoveryear in 2020, as is every other NFL franchise save the Cincinnati Bengals, who were flat and who are the league’s least valuable team, at $2 billion. The average franchise value ($3.05 billion) is up 7% from last year and tops $3 billion for the first time. That’s because most bankers look at the potential $5 billion or so revenue hit NFL owners will likely take this year as just a oneyear blip.
The NFL gravy train, which in 2019 produced average operating income (earnings before interest, taxes, depreciation and amortization) of $109 million per team, is thereafter expected to pick up where it left off. The league’s national mediarights deals, which are split evenly among the 32 teams, average $7.5 billion per year, with negotiations ongoing for even more lucrative television agreements that will kick off in 2023. The NFL is unmatched on TV, accounting for 42 of the 50 mostwatched programs in 2019, and the new collectivebargaining agreement added more TV inventory: two additional playoff games starting this season.
Another factor that keeps valuations high: NFL teams rarely change hands; average ownership tenure is four decades. “It could take 30 years” to snag a team, says sports investment banker Sal Galatioto, who says he knows at least a halfdozen multibillionaires who are looking to buy a franchise. “That scarcity factor holds values up.”