If you have an extra $2.86 billion in your back pocket, you could become the proud owner of an NFL franchise. If not, get together with some friends, pool your money and make the purchase – new NFL rules just made it easier for certain individuals to buy a team.
That figure is the amount Forbes lists as the average franchise cost based on their recent analysis, and it’s a number that has grown as a result of legalized sports gambling in America. According to Forbes, average NFL franchise valuations have increased 11% since the U.S. Supreme Court told federal lawmakers they were wrong to have signed off on the Professional and Amateur Sports Protection Act of 1992 (PASPA) in May of last year.
Forbes is known for keeping its finger on the pulse of financial activity in a number of fields and publishes annually its NFL’s Most Valuable Teams list. This year’s list was just put out, and the top ten are what you’d expect. The Dallas Cowboys are, for the 13th straight year, the most valuable team in the league with a valuation of $5.5 billion. The cheapest team in the top ten list are the 49ers, valued at $3.5 billion.
To put the valuations into perspective, previous team sales have gone for a lot less. In 2010, the St. Louis Rams, now the LA Rams, sold for $881 million. Four years later, in 2014, the Buffalo Bills were picked up for $1.51 billion. Last year, the Carolina Panthers changed hands for $2.32 billion.
The NFL may have realized that the increase in valuation may make it more difficulty for deals to be completed. Earlier this year, it approved rules that allow individual owners to finance up to $150 million in loans in order to pick up a team, with the team being used as collateral. There is also discussion within the league to allow more relaxed “acquisition debt” rules, but this would be decided on a case-by-case basis.
Valuations could increase significantly more, as well. The owner of the Cowboys, Jerry Jones, believes that sports gambling expansion is going to increase TV viewership and this, in turn, could make franchises more valuable. He explained to Yahoo Finance earlier this week, “Betting and wagering has been an integral part of the NFL for a long time. My town versus your town. It’s always been a benefit to the viewership.”
As a result of that interest, combined with expanded sports gambling capabilities, TV viewership will increase, which means the cost of advertising will increase, as well. Jones predicts, “Gaming is going to make a big difference, and increase the value of television presenting our games. I dare say it will go up 50 percent because of the gaming concentration.”
That kind of jump will make things more interesting for further sports gambling legislation, as well as how games are broadcast. It might be that, within five years, there’s a huge TV screen on every street corner during football season. I’d be okay with that.
