While the major stock indexes just recorded their worst years since 2008, major sports leagues like the NBA and NFL reported record years of revenue and the highest value of franchise sales ever in 2022.
Those sales aren’t likely to slow anytime soon, according to one industry expert.
“I think some of those teams [for sale] store, we’re going to see another milestone year,” Bill Mulvihill, head of the US Bank Sports and Entertainment Group, told Yahoo Finance. “I have no reason to believe we’re going to see a pullback in valuations.”
Walmart’s ( WMT ) heir Rob Walton’s record $4.65 billion sale of the Denver Broncos pushed sports franchise values to new highs in 2022.
Even more valuable sports teams are up for sale this year, including MLB’s Los Angeles Angels of Anaheim and the Washington Nationals, the Premier League’s Manchester United and the NFL’s Washington Commanders.
According to Forbes, the Commanders could be sold for more than $7 billion, surpassing the previous record set by Walton’s purchase of the Broncos.
Mulvihill, like other industry experts, attributes rising sports values to the industry’s growing relationship with Big Tech.
Apple ( AAPL ) has broadcast MLB games in 2022 and has invested roughly $2.5 billion in Major League Soccer ( MLS ) over the next decade. The NFL struck a $1 billion annual deal with Amazon ( AMZN ) and gave YouTube ( GOOG ) exclusive rights to stream its NFL Sunday Ticket for an estimated $2.5 billion.
“We knew sports and entertainment were valuable when viewed live,” San Francisco 49ers chairman and Elevate Sports Ventures chairman and CEO Al Guido told Yahoo Finance. “We didn’t know how valuable it was when you were able to cut the ribbon. It was really the only sticky thing left from an eyeball perspective.”
Media is a major driver of sports revenue, accounting for more than 50% of most teams’ revenue, according to Mulvihill. In a league like the NFL, where national broadcast revenue is evenly distributed, it’s easy to see the growth in revenue and thus the potential return on investment.
Last year, the Green Bay Packers reported combined media revenue of $347.3 million. With expenses of about $501 million, the Packers were 70% of the way to profitability before the regular season even started. Billion-dollar deals with companies like Amazon and Google ( GOOGL ) are adding even more value to these teams.
“It’s not like you’re buying cryptocurrency or internet stocks that have nothing,” Michael Rapkoch, founder and CEO of Sports Value Consulting, told Yahoo Finance. “There is actually something there. Revenues are growing. Attendance is still high.”
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Josh is a reporter and producer for Yahoo Finance.
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