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ARTICLE · 22 SEPTEMBER 2023

Franchise Valuations: Is There A Ceiling? How League Rules Affect The Calculus

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If you had invested in a North American sports franchise between 1991 and 2022, you would have earned a sevenfold return for an NHL team or more than a 14-fold return for an NBA team on your...

United StatesMedia, Telecoms, IT, Entertainment
David I. Sunkin
David I. Sunkin
Nayan Karanth
Nayan Karanth
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If you had invested in a North American sports franchise between 1991 and 2022, you would have earned a sevenfold return for an NHL team or more than a 14-fold return for an NBA team on your investment, bettering the return from the S&P 500 over that period of time by at least a 2:1 ratio. According to sports media, in the past year alone, the average value of an NFL franchise has increased by 24%.

The prestige of being one of very few franchise owners in each league has always kept values high. But what's been the cause of these more recent soaring valuations? Media rights, sponsorships, cable-package sales, streaming, naming rights and signage are some of the factors. Modern multibillion-dollar, multiuse stadiums not only improve the game-day experience, but also serve as more attractive venues for non-sporting events throughout the year.

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