Do you dream of owning a sports franchise team? Here are some of the prices you need to consider and check whether your investments will deem profitable.
How Much Does It Cost To Buy an NFL Team?
According to Yahoo Finance, you need around $3 billion or more to invest in an NFL team. This investment rises as the team value does. Currently, here are the five most valued franchises in the NFL and their respective prices:
- Dallas Cowboys: $5.7 billion
- New England Patriots: $4.4 billion
- New York Giants: $4.3 billion
- Los Angeles Rams: $4.0 billion
- San Francisco 49ers: $3.8 billion
The NFL team value can be measured, of course, by their game performance and revenue. Being recognized as top league teams opens opportunities for sponsorship, media rights, and licensing. Most importantly, it leads to the return of investments. These opportunities, along with operating income, are the familiar sources of revenue for NFL teams.
In terms of profitability, it is the top teams that have high revenue ranges. Dallas Cowboys tops the revenue streams with $980 million. Each team’s profitability can be measured by deducting debts and operating costs from their collective revenue, which vary across teams.
With the progressive legalization of sports betting in many states, enormous betting corporations will spend huge sums of money to sponsor teams and stadiums, increasing the value of these entities. Such projections can be confidently modeled after other sports and jurisdictions like England, in which the Premier League teams are very heavily backed by gambling companies.
How Much Does It Cost To Buy an NBA Team?
As per the recently released valuations, buying your favorite NBA team might cost you around $2.4 billion. This sum is just the average, with high-value teams coming at higher prices. Currently, here are the prices for the top five most valued NBA teams:
- New York Knicks: $5.42 billion
- Golden State Warriors: $5.20 billion
- Los Angeles Lakers: $5.14 billion
- Brooklyn Nets: $3.40 billion
- Boston Celtics: $3.18 billion
The most economical team you could purchase today is the New Orleans Pelicans, with a value of $1.35 billion. In terms of profitability, Records show that the same top two teams generated the most revenues. The Golden State Warriors generated around $474 million, while New York Knicks made $421 million. On average, NBA teams have lower price values compared to NFL teams.
How Much Does It Cost To Buy an NHL Team?
Based on Forbes’s annual National Hockey League valuation, current average team values start at $653 million. The current value range of the top team ranges as follows:
- New York Rangers: $1.55 billion
- Toronto Maple Leafs: $1.45 billion
- Montreal Canadiens: $1.30 billion
- Chicago Blackhawks: $1.00 billion
- Boston Bruins: $925 million
A 2018 record shows that the average revenue for NHL is around $5 billion. This mainly streams from media rights, arena tickets, and licensing royalties. Generally, owners and players share their team’s revenue in half.
The same statistics show that the highest revenue comes from the New York Rangers with about $225 million. In contrast, the lowest revenue recorded comes from Arizona Coyotes with $95 million.
How Much Does It Cost To Buy an MLS Team?
Major League Soccer teams have an average value of $313 million. The latest MLS top team values issued by Forbes are as follows:
- Atlanta United: $500 million
- LA Galaxy: $480 million
- LAFC: $475 million
- Seattle Sounders: $405 million
- Toronto FC: $395 million
MLS recently announced that new ownership of the 28th and 29th teams would pay an entrance fee of $200 million. Meanwhile, a $325 million entrance fee will be required for the ownership of the 30th team.
Is Buying A Sports Team Profitable?
Generally speaking, after team expenses are deducted from the revenue streams, sports franchises do not make a profit. However, it does not mean that sports franchises are a loose-all business model. The term we should note here is their “value over time.”,
The value over time of sports franchises can result in whopping amounts of return on investments. As an example, back in 1985, Jerry Reinsdorf purchased the Chicago Bulls for $16.2 million. Today, the current value of the said team is around $3.18 billion, which is a 19,653% ROI. Forbes considers this purchase to be the 4th most valuable NBA franchise.
Our Final Thoughts
Purchasing a sports team is more like purchasing art. You buy it because you love it, and hopefully, that value appreciates to gain profit when you sell it in the future. It’s a complex business model that requires incredible resources, vast connections, and sharp business acumen. It is also advisable to invest the money you could only afford to lose.
Undeniably, this makes sports franchising accessible to few wealthy investors that have resources. Thus, it is critical to understand how the business works if you plan to enter a franchise. And for those who don’t understand the business, build up a partnership with those who do.