The Average NFL Franchise Is Worth $3.5 Billion

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Hey Friends,

The National Football League is a massive (& growing) business. Forbes released its annual franchise valuations yesterday, with the NFL’s 32 teams now worth $3.48 billion on average and increasing 14% year-over-year.

NFL Franchise Valuations (YoY % Change)

1. Dallas Cowboys: $6.5 billion (+14%)

2. New England Patriots: $ 5 billion (+14%)

3. New York Giants: $4.85 billion (+13%)

4. Los Angeles Rams: $4.8 billion (+20%)

5. Washington Football Team: $4.2 billion (+20%)

6. San Francisco 49ers: $4.175 billion (+10%)

7. Chicago Bears: $4.075 billion (+16%)

8. New York Jets: $4.05 billion (+14%)

9. Philadelphia Eagles: $3.8 billion (+12%)

10. Denver Broncos: $3.75 billion (+17%)

11. Houston Texans: $3.7 billion (+12%)

12. Seattle Seahawks: $3.5 billion (+14%)

13. Green Bay Packers: $3.475 billion (+14%)

14. Pittsburgh Steelers: $3.43 billion (+14%)

15. Miami Dolphins: $3.42 billion (+18%)

16. Las Vegas Raiders: $3.415 billion (+10%)

17. Baltimore Ravens: $3.4 billion (+14%)

18. Minnesota Vikings: $3.35 billion (+14%)

19. Indianapolis Colts: $3.25 billion (+14%)

20. Atlanta Falcons: $3.2 billion (+11%)

21. Tampa Bay Buccaneers: $2.94 billion (+29%)

22. Kansas City Chiefs: $2.93 billion (+17%)

23. Los Angeles Chargers: $2.92 billion (+12%)

24. Carolina Panthers: $2.91 billion (+14%)

25. New Orleans Saints: $2.825 billion (+14%)

26. Jacksonville Jaguars: $2.8 billion (+14%)

27. Arizona Cardinals: $2.65 billion (+14%)

28. Tennessee Titans: $2.625 billion (+14%)

29. Cleveland Browns: $2.6 billion (+11%)

30. Detroit Lions: $2.4 billion (+14%)

31. Cincinnati Bengals: $2.275 billion (+14%)

32. Buffalo Bills: $2.27 billion (+11%)

The Tampa Bay Buccaneers were the clear winner last year. They started by securing the greatest quarterback of all-time in the offseason. That led to season ticket price increases from 10 to 45 percent and made Tom Brady the best-selling NFL player in history, from a merchandise perspective. Oh yeah, they also won the Super Bowl.

The result was a 30% increase in valuation, or about 2x the league average.

Everyone knows the NFL had a tough year in 2020. There were empty stadiums, millions of dollars spent on COVID-19 testing, delayed games, non-existent game-day revenue, a reduction in sponsorship income, and more. The result was a 20% decline in league revenue, or an average of about $380 million per team.

Even worse, 20 out of the NFL’s 32 teams (63%) reported negative operating income for the year — a company’s profit after subtracting its regular, recurring costs & expenses — with the Los Angeles Chargers & the San Francisco 49ers with $48.7 million and $45.4 million in negative operating income respectively.

Avg. NFL Team Operating Income

• 2019-20 NFL Season: $109 million

• 2020-21 NFL Season: $7.1 million (-93%)

Highest Operating Income 2020

1. Dallas Cowboys: $280.4 million

2. New England Patriots: $142.4 million

3. Jacksonville Jaguars: $68.8 million

4. Los Angeles Rams: $37.2 million

5. Washington Football Team: $25 million

Lowest Operating Income 2020

1. Los Angeles Chargers: -$48.7 million

2. San Francisco 49ers: -$45.4 million

3. Green Bay Packers: -$33.5 million

4. Philadelphia Eagles: -$25.9 million

5. Detroit Lions: -$22.2 million

Still, the NFL flexed its muscles and saw franchise valuations increase about 14% across the league on the back of new multi-billion-dollar media rights packages.

The total package is worth about $112 billion over the next decade, and as a result, individual teams will receive annual payments starting at $220 million this year and gradually increasing to $377 million by 2032. That doesn’t even include the league’s Sunday Ticket deal with DirecTV.

This is a perfect illustration of why private equity firms and other institutional players have recently been deploying billions of dollars of capital across professional sports leagues & teams.

Sure, these assets are a diversified, non-correlated bet to hedge equity/credit exposure and have appreciated by more than 500% on average over the last decade, but the certainty of cash flow can’t be understated either.

For example, as a result of the new media rights package, each of the NFL’s 32 teams will individually receive a check for $220 million next year, $249 million in 2022, $264 million in 2023, $282 million in 2024, etc. — as long as the games are played, they get paid. That cash flow certainty has created a revenue floor that private market investors can get comfortable with.

We’ll see how the coming years play out, but it’s difficult to imagine the NFL will ever face a year as financially challenging as 2020. They operate in a monopolistic capacity due to a lack of competition, have a scarcity factor because of the fixed supply of teams, and are able to monetize their premium IP extremely, extremely well.

Have a great weekend, and I’ll talk to everyone on Monday.

You can read the entire Forbes valuation piece here.

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