Infographic – Sports Franchise Values

Posted on February 21, 2013 by Chris Lindauer

As a follow up to one of our previous posts, we commissioned Curvity Design to create an infographic to demonstrate the risk vs. the reward in purchasing a professional sports franchise (including the Forbes’ evaluation of team value at or near the time of the team’s sale). Hope you enjoy the results! Thanks to Laura Bennett at Curvity Design for developing the graphic…great work Laura! Follow her on Twitter at @curvitydesign. She is also on Facebook at facebook.com/curvity and her website is www.curvity.com.

Also, many thanks to our blog manager, Griffin Booth, for his efforts in researching data for this infographic. You can also see his previous post on the topic (“How Accurate are Forbes Franchise Evaluations?”) by clicking here.

Not pictured in the infographic is the current tug-of-war for the rights to the NBA’s Sacramento Kings franchise. Reports suggest the franchise could be sold for upwards of $500 million, while Forbes currently puts a $525 million valuation on the team. The current owners of the franchise paid just $156 million for the Kings in 1998.

Griffin Booth is in his first year as Sports Career Consulting’s Blog Manager. He is a recent Washington State University graduate where he majored in communications with an emphasis in broadcasting. Booth began his career as an intern with sports radio 950 KJR in Seattle where he was responsible for managing the show’s podcasts. He later gained experience as a news anchor, producer, and reporter for Cable 8 news in the greater Pullman area. In addition to his role with Sports Career Consulting, he is currently an intern with Washington State University’s Cougar Athletic Fund, helping to raise money for student-athlete scholarships. Born and raised in Seattle, Booth is a huge fan of all Seattle sports. For any questions, comments, or feedback please feel free to contact Griffin by email at gbooth206@gmail.com. You can also follow him on Twitter @gbooth6.

How Accurate Are Forbes’ Franchise Values?

Posted on January 24, 2013 by Chris Lindauer

Today’s post comes courtesy of Griffin Booth, Sports Career Consulting’s blog manager.

While sporting events provide entertainment for fans, above all else, it is a business. Owners of professional sports organizations, like owners of any business, have a responsibility to strive for profitability. Unfortunately for many professional teams, turning a profit is extremely difficulty thanks to inflated player salaries. Why then, would anyone actually want to own a franchise? Well, good question…until you take a good look at the annual estimates of franchise values published by Forbes each year. Just out of curiosity, we decided to compare and contrast the published Forbes franchise valuations against the actual recent sale price of sports teams. The results might surprise you.

MLB

In March of 2012, Forbes valued the Los Angeles Dodgers at $1.4 billion. The owner at that time, Frank McCourt, paid just $355 million for the team in 2004. McCourt agreed to sell the team in late March to an ownership group that included NBA hall of famer Magic Johnson and longtime baseball executive Stan Kasten. The reported sale price was $2 billion dollars, shattering the record for the sale price of a professional sports team while allowing McCourt to enjoy a very generous profit.

Despite the large amount of money invested in purchasing the team, the franchise has yet to become legitimate contenders for a Major League Baseball championship. While the Dodgers made a splash at the MLB trade deadline, hauling in the large contract of former Marlins all-star Hanley Ramirez and despite a winning record, the Dodgers failed to make the playoffs last year.

Before the 2012 season began, the San Diego Padres were valued at $458 million dollars by Forbes. In a season of struggles with the team finishing second to the last in the NL west division, the Padres were sold toward the end of season. The sale price? $800 million dollars, paid by an ownership group headed by beer distributed Ron Fowler, nearly twice the amount the previous owners paid just three years earlier. Prior to that, the team was purchased in 1994 for only $94 million.

NBA

In 2012, Forbes listed the Memphis Grizzlies franchise value at $269 million, making it the second lowest valued team in the NBA (only the Milwaukee Bucks had a lower value). Former Grizzlies owner Michael Heisley entered into a sales agreement with Robert J. Pera, founder and CEO of the Ubiquiti Networks, in June with a purchase price of around a reported $350 million dollars. By October 30^th, the official sale price was listed at $377 million dollars. Heisley purchased the team in 2000 for $160 million dollars, netting a profit of roughly $217 million dollars.

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Around the Horn: April 5th

Posted on April 6, 2012 by Chris Lindauer

For those interested in Masters social media, the folks at Octagon First Call have assembled a “social media guide” to the 76th Masters golf tournament at Augusta. Great resource for those who want to follow their favorite golfers or get real-time updates on scores.

Need evidence to support your theory that the NBA loves star power? Look no further than last night’s highlights of the Clippers vs. Lakers game on nba.com. Based on the ratio of Clippers to Lakers highlights, one would assume the Clippers won the game (they didn’t). That said, seeing Blake Griffin dunking on Gasol like that (twice) makes a pretty compelling case for why Kia and Subway seem to think he can help them sell more product.

Brands looking for the next up and coming athlete with real star power don’t need to look any further than Robert Griffin III, better know as RG3, who posted his first tweet to his twitter account this week. Just 24 hours later, he already had nearly 75,000 followers (and nearly 80,000 at the time of this post). You think this guy is going to help whichever team drafts him sell tickets? Adidas also stands to benefit from RG3′s foray into social media because Griffin endorses the brand. Nike probably isn’t complaining either, knowing the former Baylor QB is likely to sell a LOT of jerseys, and they now have the sacred NFL apparel deal.

Speaking of the NFL’s apparel deal with Nike, I’m still amazed how much hype Nike‘s new uniform “reveal” event on Tuesday generated. Nobody manufactures buzz like the swoosh…

For those wondering how lucrative the digital media market is for the NCAA, AdAge recently reported that digital viewership of March Madness generates $60 million in advertising revenue for Turner and CBS.

In entertainment news, it was announced earlier this week that James Bond (Daniel Craig) will help open the Summer Games in London. GREAT score for MGM Studios as over a billion people are expected to watch the Opening Ceremonies…

JOB SEEKERS! Seattle University Athletics is looking for a ticket sales Account Executive & Assistant GM of ticket sales. For more details, please see the previous post on our blog.

Around the Horn: March 9th

Posted on March 10, 2012 by Chris Lindauer

The development of niche sports (I wouldn’t go so far as to refer to them as “emerging” sports) apparently remains a hip, trendy endeavour among the community of alternative sport enthusiasts. Last week, we mentioned the “sport” of Taser Ball. This week? Standup Paddleboard Yoga…what will they think of next? What’s the most bizarre sport you’ve seen?

Today’s Oregonian featured interesting insight on the development of a new soccer ball for the upcoming Major League Soccer season. Adidas America, headquartered here in Portland, OR, made a few tweaks to the ball used the past two seasons. The redesigned ball should help minimize complaints from league goalies who suggested the old ball would “knuckleball” on them, making it difficult to predict movement patterns.

Heard a heated discussion taking place at lunch today discussing the Andrew Luck vs. Peyton Manning discussion…and not the on-field performance argument either. The debate was focused on which player would best represent a brand as an endorser. With questions remaining about Peyton’s ability to bounce back from several neck surgeries and Luck’s “upside” that so many NFL analysts are raving about, which QB would you rather have endorsing your product from this point forward?

Around the Horn: March 1st

Posted on March 1, 2012 by Chris Lindauer

Turns out the crash that delayed the Daytona 500 on Monday night gave Tide a great opportunity to connect with the most brand loyal fans in all of sports. According to a report from bizjournals.com, the fire and subsequent cleanup effort (requiring nearly 2 hours in which Tide detergent was used to mop up the spill) provided the brand with $8 million in free exposure. Why free? Because Tide has not been an official sponsor of NASCAR since 2006…

As part of the NBA’s “Noche Latina” event (in celebration of Latin heritage), the Orlando Magic will debut “El Magic” uniforms for 3 home games in March. “Los Bulls”, “Los Lakers”, “Los Suns”, “Los Spurs”, “El Heat” and “Nueva York” are among those also participating in the month-long event. According to a report last year from nba.com, hispanic fans comprise 15% of the league’s overall fan base.

The discussion of emerging sports has been a hot topic within industry the last few years…but Ultimate Taser Ball? Check this “shocking” story from Huffington Post about a new sport that is apparently gaining steam…

Around the Horn: Feb 29th

Posted on February 29, 2012 by Chris Lindauer

Looks as if ESPN “likes” Facebook…The sports media giant recently re-designed their “Sports Center” page on the popular social networking site as Facebook continues to roll out the new “Timeline” features. ESPN integrated their ESPN3 video player within the new page and, on Thursday, will begin streaming coverage of NCAA championship week games. This marks the first time live sporting events will be streamed directly to Facebook. Is this the start of a new trend?

I wonder how many sports teams are taking advantage of “Leap Day” as a promotional opportunity… Count Minor League Baseball’s Peoria Chiefs as one of those teams. They are extending a leap year promotional ticket offer to fans, buy four tickets and get the fifth free. Tweet us @sportsbized or comment below if you have seen any similar offers from other teams.

There appears to be no end in site for the “Linsanity.” Jeremy Lin has captivated the NBA audience and brands are taking immediate action to cash in. The Knicks‘ star’s brand continues its meteoric rise in value while the world continues to watch. Today, Forbes published an interesting piece online, broaching the Lin subject from a little different angle. The story, titled “4 Lessons Your Business Can Learn from Jeremy Lin(sanity),” is an interesting read, well worth a few minutes of your time.

Around the Horn: Feb 28th

Posted on February 29, 2012 by Chris Lindauer

Scary realization tonight when I noticed the price at the pump was an outrageous $4.05 per gallon. Ouch. Considering the Daytona 500 was already under way, it got me to thinking…how much do you think each car spends in gas during a NASCAR event? Good thing NASCAR teams have so many sponsors to help foot the gas bill.

EA Sports named ex-Baylor standout Robert Griffin III as the cover athlete for the NCAA Football 13 video game. I wonder if there are any metrics out there that might illustrate any discernible impact any previous cover athletes may have had on game sales… It should be noted that RG3 won’t be alone on next year’s cover, however, as EA is running a promotion on its NCAA Facebook page encouraging fans to vote on a Heisman “legend” to accompany Griffin on the cover.

As seen yesterday on Twitter from Magic Johnson: “@MagicJohnson Outside Longacre Theatre on Broadway where @MagicBirdBway will be.” Interesting. I heard rumors of a Magic and Larry Bird project a while back but didn’t realize it had already come to fruition. It is probably safe to say that “Lombardi” had a pretty successful run on Broadway last year because the same producers are behind “Magic/Bird”, scheduled to debut in April at Broadway’s Longacre Theatre.

It sounds like the Kings have a deal in place to stay in Sacramento…bad news for NBA fans in Seattle. It also sounds like the Hornets will be staying put as NBA Commissioner David Stern suggested over the weekend that a buyer was in place to keep the franchise in New Orleans.

Around the Horn: Feb 21st

Posted on February 21, 2012 by Chris Lindauer

What better way to illustrate the fierce competition for the attention of sports and entertainment consumers than Sunday’s TV lineup? In addition to the Academy Awards, those battling for viewers include the NBA (All-Star Game), NASCAR (Daytona 500), PGA Tour (WGC-Accenture Match Play), NHL (regularly scheduled games) and NFL (combine coverage)…

Speaking of the Daytona 500, what kind of impact will Danica Patrick‘s participation have on overall interest of the event? Will she provide the crossover appeal NASCAR is hoping for and help draw new fans/viewers?

Have you heard of Build-A-Head yet? If not, you will soon! Good story on the company that is capitalizing on the “big head” craze among fans attending sporting events at CNBC.com.

Around the Horn: Feb. 20th

Posted on February 20, 2012 by Chris Lindauer

The Green Bay Packers have reportedly sold nearly $66 million in “stock” at $250 per share. The organization will also begin selling shares to fans in Canada, creating even more revenue opportunities…such a unique scenario, unlike any other in sports.

Side note: In addition to paying $250 for stock that doesn’t carry any “real” value, the team is charging a $25 “handling” fee to fans in the U.S. and a $35 fee to fans in Canada.

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