Sunday, September 9, 2012

Dollars & Sense - Forbes NFL Team Values

Last week, Forbes released their 2012 NFL team valuations.  America’s team, the Dallas Cowboys, came in with the highest value at a huge $2.1 billion.  The Jacksonville Jaguars came in with the lowest value at $770 million.  Rounding out the top five were the New England Patriots at $1.635 billion, the Washington Redskins at $1.6 billion, the New York Giants at $1.468 billion, and the Houston Texans at $1.305 billion. 

This season saw a record 20 out of 32 teams being valued at $1 billion or more just further evidence of the NFL’s sheer dominance.  The other billion dollar teams included the Jets, Eagles, Bears, 49ers, Packers, Ravens, Colts, Broncos, Steelers, Dolphins, Panthers, Seahawks, Buccaneers, Titans, and Chiefs. 

Clearly the NFL team values don’t discriminate in size of media market, team win-loss record, new or old stadium, or player star power.  One of the big reasons that NFL teams are valued so highly is the almost $10 billion of revenue that the league brings in each year.  A huge contribution to that are the oft talked about national television contracts. 

The Cowboys also blew away the competition in terms of revenue and profit with an astounding $500 million in revenue and over $225 million in profit.  You could see where a team like the Oakland Raiders (valued at $785 million) would have some trouble given revenue that is less than the Cowboys’ profit, while they also operate at a loss of a little more than $15 million.

Each year the Forbes NFL values truly show the strength of the brands in the league.  Even the bottom team, the Jaguars, is still valued at $770 million.  With an ambitious new owner in Shadid Khan, it would come as no surprise if the Jags were able to boost their value a bit over the next few seasons.

Brand strength is really what helps in determining the value.  That is the same reason why the New Orleans Saints are only at number 23 on the list.  Sure they’re really good and have been for a handful of years now, but they are still a relatively new brand.  The Cowboys have been a marquee brand for years now.  The strength of their brand may be what allows them to charge $75 for parking.

Team values are simply estimations because it is of course impossible to tell exactly.  Relative to other professional sports leagues, team values are less volatile in the NFL due to the centralized revenue stream.  But still there is room for improvement for many on this list.  Which team do you think has the best chance of overtaking the Cowboys for the top spot in the coming years?

Follow Kevin Rossi on Twitter @kevin_rossi.

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