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RE: LeoThread 2024-10-31 14:22

The Dallas Cowboys are the first franchise to lasso a $10 billion valuation, and all 32 teams are now worth at least $4 billion, with prices primed to keep rising.

The Dallas Cowboys have been the most valuable team in the world’s richest sports league for 18 straight years, but America’s Team wasn’t the first franchise worth $1 billion, or $2 billion, or even $3 billion. (By Forbes’ calculations, those milestones were first achieved by, in order, the then-Washington Redskins in 2004, Manchester United in 2012 and Real Madrid in 2013.)

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If everything really is bigger in Texas, though, Dallas owner Jerry Jones can surely appreciate this: The Cowboys are the first sports team to cross the $10 billion threshold, landing at $10.1 billion on Forbes’ annual list of the NFL’s most valuable teams. That figure represents a 77% increase since 2020—when the Covid-19 pandemic momentarily slowed NFL teams’ growth—and an annualized return of 15%, beating the S&P 500’s 13% in the same four-year period.

The Cowboys may not have won a Super Bowl since 1996, but they now have a $2.5 billion lead on the NFL’s second-most-valuable team, the Los Angeles Rams—and a $7 billion gap ahead of the No. 32 Cincinnati Bengals—thanks to Dallas’ nearly $800 million in local revenue during the 2023 season, including ticket sales, sponsorships, merchandise and other streams specific to the club. No other pro football team even topped $400 million, with the Las Vegas Raiders and the Rams getting the closest, and Dallas’ $564 million in operating income essentially doubled up the second-place Rams’ $286 million.

All NFL franchises are riding high, however, with roughly $380 million in revenue per team coming from the league’s lucrative new national media rights package, which kicked in last season. The agreements—with CBS, ESPN/ABC, Fox, NBC and YouTube, plus Amazon’s Thursday Night Football deal, which started a year earlier—are set to pay at least $125.5 billion through 2033.

That kind of guaranteed money has all 32 NFL teams now worth at least $4 billion, at an average of $5.7 billion, up 11% from 2023’s record $5.1 billion. And every team is profitable, with operating income of at least $56 million across the board for the 2023 season, according to Forbes estimates. (By contrast, Major League Baseball, Major League Soccer and the NBA each had at least three teams lose money in the most recent season of Forbes data.) Those economics help explain why the NFL’s valuations sit in a relatively narrow band, with the Cowboys worth 2.5 times the last-place Bengals—smaller than the spread in Forbes’ most recent lists for MLB (7.6x), MLS (3x), the NBA (3.2x) and the NHL (5.6x).

The future of the NFL’s “Sunday Ticket” package, which shifted from DirecTV to YouTube last season, is somewhat uncertain in the midst of an antitrust lawsuit in which the presiding federal judge recently overturned the jury’s $4.7 billion verdict against the league. (The plaintiffs are expected to appeal.) But after the Washington Commanders were sold last year for a record $6.05 billion (including a $200 million earn-out), there are tailwinds that could push team prices even higher.

First, Netflix is set to stream two Christmas Day games this season and at least one in 2025 and 2026, adding one more competitor to the media bidding war. The NFL is also growing internationally, with five games being played abroad in 2024 and flag football debuting as an Olympic sport in Los Angeles in 2028. Meanwhile, NFL Commissioner Roger Goodell continues to push for an 18-game regular season, after the players’ union reluctantly accepted a 17th game starting in 2021, and the widespread legalization of sports betting is opening new opportunities. In addition, several teams around the league are pursuing new stadiums, which typically boost revenue.

More immediately, the NFL, which has always required team owners to be individuals, could see an influx of private equity money after a vote at a special meeting on Tuesday to allow select funds to own up to 10% of a franchise’s equity. That level of investment is well below what MLB (15%), MLS (20%), the NBA (20%) and the NHL (20%) reportedly permit a fund to own, so the impact may be somewhat muted. The idea, though, is that institutional investors can expand the ranks of potential bidders for teams, a pool that would otherwise keep getting smaller as prices continue to soar.

Likewise, in October, the NFL raised its debt limit for teams to $700 million, from $600 million, and for team buyers to $1.2 billion, from $1.1 billion. That should make it easier for a prospective NFL owner to cover the 30% of a team’s equity that the league requires a franchise’s general partner to hold.

So while the Cowboys are the first team to get to $10 billion, they surely won’t be the last.

#1. $10.1 billion
Dallas Cowboys

#2. $7.6 billion
Los Angeles Rams

#3. $7.4 billion
New England Patriots

#4. $7.3 billion
New York Giants

#5. $6.9 billion
New York Jets

#6. $6.8 billion
San Francisco 49ers

#7. $6.7 billion
Las Vegas Raiders

#8. $6.6 billion
Philadelphia Eagles

#9. $6.4 billion
Chicago Bears

#10. $6.3 billion
Washington Commanders

#11. $6.2 billion
Miami Dolphins

#12. $6.1 billion
Houston Texans

#13. $5.6 billion
Green Bay Packers

#14. $5.5 billion
Denver Broncos

#15. $5.45 billion
Seattle Seahawks

#16. $5.4 billion
Tampa Bay Buccaneers

#17. $5.3 billion
Pittsburgh Steelers

#18. $5.2 billion
Atlanta Falcons

#19. $5.15 billion
Cleveland Browns

#20. $5.1 billion
Los Angeles Chargers

#21. $5.05 billion
Minnesota Vikings

#22. $5 billion
Baltimore Ravens

#23. $4.9 billion
Tennessee Titans

#24. $4.85 billion
Kansas City Chiefs

#25. $4.8 billion
Indianapolis Colts

#26. $4.6 billion
Jacksonville Jaguars

#27. $4.5 billion
Carolina Panthers

#28. $4.4 billion
New Orleans Saints

#29. $4.3 billion
Arizona Cardinals

#30. $4.2 billion
Buffalo Bills

#31. $4.15 billion
Detroit Lions#32.

#32. $4.1 billion
Cincinnati Bengals