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Team values: Woohoo, we're not last!

PromoTheRobot

By PromoTheRobot
in The Stadium Wall Archives

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Ridgewaycynic2013 Hall of Famer

Ridgewaycynic2013

Posted
Posted
1 minute ago, PromoTheRobot said:

 

I'd like to know how Green Bay is worth a billion more than the Bills?

 

Local community ownership...every year they fly Goldie Gardner out there, and they run a three month pledge drive to bankroll the team.  "We're going to hold going to the practice until we get 25 new members for Green Bay football..."

Big Turk Hall of Famer

Big Turk

Posted
Posted
1 hour ago, Niagara Bill said:

Non sense. Jac worth more than Bills. Haha

Josh is worth more than Jacksonville.

 

I mean they got Sunshine Ronnie Bass playing QB for them now...

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DrDawkinstein Hall of Famer

DrDawkinstein

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12 minutes ago, MiltonWaddams said:

It’s funny how little the on-field product effects the value of the team. See: Texans, Houston 

 

6 minutes ago, foreboding said:

If your QB is worth a quarter of a billion dollars, does that not, by definition, raise the floor of the franchise value?

 

Nope, its all about the market size, TV revenue, and local corporate availability for suites.

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PromoTheRobot Hall of Famer

PromoTheRobot

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7 minutes ago, DrDawkinstein said:

 

 

Nope, its all about the market size, TV revenue, and local corporate availability for suites.

Which is why I was asking how GB is worth a billion more than us?

Augie Hall of Famer

Augie

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Posted
1 minute ago, PromoTheRobot said:

Which is why I was asking how GB is worth a billion more than us?

 

They make a fortune selling cheese curds???   🤷‍♀️

 

I doubt they can beat us in beer sales. 

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PromoTheRobot Hall of Famer

PromoTheRobot

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Posted
4 minutes ago, Augie said:

 

They make a fortune selling cheese curds???   🤷‍♀️

 

I doubt they can beat us in beer sales. 

Is it because they own their stadium?

DrDawkinstein Hall of Famer

DrDawkinstein

Posted
Posted (edited)
12 minutes ago, PromoTheRobot said:

Which is why I was asking how GB is worth a billion more than us?

 

Couple of things.

 

Milwaukee counts in their market, which isnt much bigger than Buffalo but it's not just the Green Bay area that is counted. Heck, they even get some of the Chicago market.

 

Plus, brand value comes into play as well. The history and championships do mean something. It's a big part of what makes the Cowboys the most valuable team, and why Jerry Jones will always volunteer for Hard Knocks (keeping that brand in the spotlight, any spotlight). I mean, the Championship trophy is named after Green Bay's old coach. There is big brand value there compared to the Bills.

 

 

Edited by DrDawkinstein
Shaw66 All Pro

Shaw66

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Posted
35 minutes ago, DrDawkinstein said:

 

Couple of things.

 

Milwaukee counts in their market, which isnt much bigger than Buffalo but it's not just the Green Bay area that is counted. Heck, they even get some of the Chicago market.

 

Plus, brand value comes into play as well. The history and championships do mean something. It's a big part of what makes the Cowboys the most valuable team, and why Jerry Jones will always volunteer for Hard Knocks (keeping that brand in the spotlight, any spotlight). I mean, the Championship trophy is named after Green Bay's old coach. There is big brand value there compared to the Bills.

 

 

I don't think TV market size has much, if anything, to do with how valuable a franchise.  Individual teams don't share the tv revenue based on their market size.  The fact that the NFL shares tv revenue among all teams is exactly what makes smaller market teams viable.  

 

It's all about brand value, as you say.  In particular, it's how much revenue you can generate in your community.   The Bills have among the lowest ticket prices in the league.  If they raised all tickets $50 per game, they'd be in line with a lot of other teams.  That's $2.5 million per game, or $20 million per season.  Some of it is shared with the visiting team (I think not the suite revenue).  Net to the home team on all the ticket revenue would be at least $10 million more, probably $15 if you have a lot of suite revenue.  $10 million of extra net income a year increases the value of the franchise by $100 million to $200 million.  The Bills aren't worth as much as the other teams because their market won't permit them to raise ticket prices that much, and their market won't support a lot of high-priced suites.  

hondo in seattle All Pro

hondo in seattle

Posted
Posted (edited)

Businesses are often valued as a multiple of their earnings (often expressed as EBITDA: Earnings Before interest, Taxes, Depreciation, and Amortization).   For example, you can buy a Burger King franchise for around 6xEBITDA.   The multiple is decided by the market: buyers & investors consider how strong the brand is, the safety of their investment, and their projected future returns.  

 

The price generated by the multiple will be modified by a number of things including the physical assets included, expected future expenses, the strength of the specific market, and so on.   So while the multiple for Burger King might be 6x, the actual price you pay for a particular group of BK restaurants can be somewhat more or less. 

 

These modifications can get complicated when looking at the valuation of a NFL club.  This is how Forbes does it:

 

METHODOLOGY

Figures for revenue and operating income (earnings before interest, taxes, depreciation and amortization) are for the 2020 season and net of stadium debt service. Debt includes both team and stadium debt recourse to team owners. We employ the cash basis, rather than the accrual basis, of accounting. Team values are enterprise values (equity plus net debt) and include the economics (including non-NFL revenue that accrues to the team’s owner) of the team’s stadium but not the value of the stadium real estate itself. 

 

 

www.forbes.com/sites/mikeozanian/2021/08/05/the-nfls-most-valuable-teams-2021-average-team-value-soars-to-35-billion-as-league-shrugs-off-pandemic-year/?sh=b510896654e9

Edited by hondo in seattle
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Shaw66 All Pro

Shaw66

Posted
Posted
22 minutes ago, hondo in seattle said:

Businesses are often valued as a multiple of their earnings (often expressed as EBITDA: Earnings Before interest, Taxes, Depreciation, and Amortization).   For example, you can buy a Burger King franchise for around 6xEBITDA.   The multiple is decided by the market: buyers & investors consider how strong the brand is, the safety of their investment, and their projected future returns.  

 

The price generated by the multiple will be modified by a number of things including the physical assets included, expected future expenses, the strength of the specific market, and so on.   So while the multiple for Burger King might be 6x, the actual price you pay for a particular group of BK restaurants can be somewhat more or less. 

 

These modifications can get complicated when looking at the valuation of a NFL club.  This is how Forbes does it:

 

METHODOLOGY

Figures for revenue and operating income (earnings before interest, taxes, depreciation and amortization) are for the 2020 season and net of stadium debt service. Debt includes both team and stadium debt recourse to team owners. We employ the cash basis, rather than the accrual basis, of accounting. Team values are enterprise values (equity plus net debt) and include the economics (including non-NFL revenue that accrues to the team’s owner) of the team’s stadium but not the value of the stadium real estate itself. 

 

 

www.forbes.com/sites/mikeozanian/2021/08/05/the-nfls-most-valuable-teams-2021-average-team-value-soars-to-35-billion-as-league-shrugs-off-pandemic-year/?sh=b510896654e9

What's the multiple Forbes uses?  I'd guess it's 10 or more.  

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