http://skift.com/2014/11/27/arizona-businesses-hope-the-home-team-doesnt-make-the-super-bowl/
The businesses of Arizona hope the playoff bound Arizona Cardinals does not make it to the Super Bowl, which will be played in Glendale this year, the team's home stadium... Sounds weird, right? Financially though, the businesses right the right to be concerned if the Cardinals get the NFC title, and that is a lack of income from tourism.
The NFL and local organizing committees estimated that the Super Bowl brings in $500 million of economic impact to the host community. If the Cardinals go to the Super Bowl, that $500 million could easily turn into only $50 million. That is because there would be way fewer tourists, and they are the only people to spend significant amounts of money on an event like this, not the locals. Some of the loss in Super Bowl revenue would be made up in extra Cardinals' playoff games, so the lost income will not be as bad as it could have been without considering that.
I think the Super Bowl will be extremely profitable at the stadium. I do not agree that tourism will bring the $500 million to only $50 million. Locals fans and businesses will support their hometown team and spend some money they would not have done in the regular season; however, assuming the estimates would be accurate, the best possible scenario would be the the Cardinals lose in the NFC Championship game.
Tuesday, December 16, 2014
A (Football) Tale of 2 Universities
https://www.insidehighered.com/views/2014/12/16/one-universitys-decision-drop-football-should-be-model-others-essay
The college football frenzy, where schools are in an athletic arms race, feeling it necessary to send spend ridiculous funds on high coaches' salaries and fancy facilities to not suffer athletic humiliation and the wrath of angry alumni and fans, is taking full force as bowl season is right around the corner. Despite this, University of Alabama Birmingham has ended the school's football program after the regular season came to a close.
Its stadium, Legion Field, which seats 72,000 people, could barely hold an average attendance of 15,000 people per game since Alabama and Auburn takes the spotlight. UAB lost $18 million on athletics annually, mainly because of football, so cutting the sport help eliminate some of the loss without having to spend millions of dollars on new facilities.
Contrasting the UAB experience is Ohio University. Their average attendance is the same, but the stadium's capacity is just 24,00. Ohio State University takes fans from OU, just like UAB has been experiencing. The school also losses $18 million on athletics annually. Despite of the loss in money, OU has a different plan; they will had a study hall for athletes costing $5 million.
From the schools here (UAB and OU), I think UAB will be better off in the long hall. They know that they cannot compete financially in athletics in the state of Alabama, so the college would be saving themselves a ton of money.
OU might be making a mistake in taking their football program active and spending millions on extra dollars on unnecessary libraries. The university is just wasting their money on sports instead of spending money on necessary fine arts programs and scholarships on striving students.
The college football frenzy, where schools are in an athletic arms race, feeling it necessary to send spend ridiculous funds on high coaches' salaries and fancy facilities to not suffer athletic humiliation and the wrath of angry alumni and fans, is taking full force as bowl season is right around the corner. Despite this, University of Alabama Birmingham has ended the school's football program after the regular season came to a close.
Its stadium, Legion Field, which seats 72,000 people, could barely hold an average attendance of 15,000 people per game since Alabama and Auburn takes the spotlight. UAB lost $18 million on athletics annually, mainly because of football, so cutting the sport help eliminate some of the loss without having to spend millions of dollars on new facilities.
Contrasting the UAB experience is Ohio University. Their average attendance is the same, but the stadium's capacity is just 24,00. Ohio State University takes fans from OU, just like UAB has been experiencing. The school also losses $18 million on athletics annually. Despite of the loss in money, OU has a different plan; they will had a study hall for athletes costing $5 million.
From the schools here (UAB and OU), I think UAB will be better off in the long hall. They know that they cannot compete financially in athletics in the state of Alabama, so the college would be saving themselves a ton of money.
OU might be making a mistake in taking their football program active and spending millions on extra dollars on unnecessary libraries. The university is just wasting their money on sports instead of spending money on necessary fine arts programs and scholarships on striving students.
Monday, December 15, 2014
A good deal? Other teams have paid more than Rays to break lease
/http://tbo.com/news/politics/a-good-deal-other-teams-have-paid-more-than-rays-to-break-lease-20141213/
St. Petersburg Mayor Rick Kriseman and Tampa Bay Rays officials jointly announced a deal that would let the baseball team break its Tropicana Field contract. This give the Rays the chance to move out of Tampa Bay for just $24 million over the next 12 years, but sports economists have been confused and just a bit baffled about why this deal would have been okay-ed. Here are some examples why the economists do not agree with this potential deal.
1) After the Supersonics moved out of Seattle and into Oklahoma City in 2008, the team payed a $45 million out-of-court settlement to Seattle.
2) The city of Pontiac in 2000 sued the Detroit Lions for damages totaling more than $100 million when the team broke its lease and left the Silverdome.
The main reason why the city of St. Petersburg and Tampa Bay would be okay with this deal is because the stadium is losing the area $1.4 million per year. This is due to $1 million of property insurance annually and $1.8 million which covers Tropicana Field's game days or other hosting events.
If the Rays leave, the area would demo the stadium to avoid having to maintain an empty building. This would give the 84-area site much needed development and add millions of tax dollars as a result.
I think this is a good potential move by St. Petersburg and Tampa Bay officials. The stadium is a useless $300 million + money pit that is not helping the cities.
St. Petersburg Mayor Rick Kriseman and Tampa Bay Rays officials jointly announced a deal that would let the baseball team break its Tropicana Field contract. This give the Rays the chance to move out of Tampa Bay for just $24 million over the next 12 years, but sports economists have been confused and just a bit baffled about why this deal would have been okay-ed. Here are some examples why the economists do not agree with this potential deal.
1) After the Supersonics moved out of Seattle and into Oklahoma City in 2008, the team payed a $45 million out-of-court settlement to Seattle.
2) The city of Pontiac in 2000 sued the Detroit Lions for damages totaling more than $100 million when the team broke its lease and left the Silverdome.
The main reason why the city of St. Petersburg and Tampa Bay would be okay with this deal is because the stadium is losing the area $1.4 million per year. This is due to $1 million of property insurance annually and $1.8 million which covers Tropicana Field's game days or other hosting events.
If the Rays leave, the area would demo the stadium to avoid having to maintain an empty building. This would give the 84-area site much needed development and add millions of tax dollars as a result.
I think this is a good potential move by St. Petersburg and Tampa Bay officials. The stadium is a useless $300 million + money pit that is not helping the cities.
Sunday, December 14, 2014
Seattle gridlock slows down NHL expansion plans
http://seattletimes.com/html/hockey/2025238270_bakercolumn15xml.html
The NHL's expansion plans have been mostly stalled because of Seattle; however, the city does want a hockey team. The main reasons for the stall are:
1) Seattle does not have a proper venue since the Seattle Supersonics moved to Oklahoma City.
2) The approval of the Sodo arena project is not likely until after 2016, and Seattle's Department of Transportation and the city counsel would have to approve other grants and regulations which would take another four or five months for approval.
The Florida Panthers and Arizona Coyotes would have been candidates for moving to Seattle in 2018 or 2019, but that does not seem overly likely right now.
I always wanted an NHL team in Seattle. The city loves sports and would be very willing to spend money to see hockey and basketball games. Anyhow, I would think the Florida Panthers would have been more likely to move to Seattle than Arizona since the Coyotes could have moved to Canada for the short-term.
Also, I want my Supersonics back!
The NHL's expansion plans have been mostly stalled because of Seattle; however, the city does want a hockey team. The main reasons for the stall are:
1) Seattle does not have a proper venue since the Seattle Supersonics moved to Oklahoma City.
2) The approval of the Sodo arena project is not likely until after 2016, and Seattle's Department of Transportation and the city counsel would have to approve other grants and regulations which would take another four or five months for approval.
The Florida Panthers and Arizona Coyotes would have been candidates for moving to Seattle in 2018 or 2019, but that does not seem overly likely right now.
I always wanted an NHL team in Seattle. The city loves sports and would be very willing to spend money to see hockey and basketball games. Anyhow, I would think the Florida Panthers would have been more likely to move to Seattle than Arizona since the Coyotes could have moved to Canada for the short-term.
Also, I want my Supersonics back!
Friday, October 31, 2014
Players, Teams Strike Hoops Gold As NBA Nearly Triples Prior Media Deal
http://www.forbes.com/sites/prishe/2014/10/06/players-teams-strike-hoops-gold-as-nba-nearly-triples-prior-media-deal/
My last blog (How TV's Sports Addiction Could Destroy Its Business) was about this update, so to recap...
This deal is a win-win for the NBA since the players and owners will be making more money. This is a good thing for the league. There will be no way for this deal to backfire. The NBA is too popular.
My last blog (How TV's Sports Addiction Could Destroy Its Business) was about this update, so to recap...
- ESPN and Turner Sports have completed a 9 year deal worth $24 billion to renew their NBA media rights through the 2024-2025 season (starts with 2016-2017 season).
- This happened because of basketball's growth, mega-superstars (LeBron James, Kevin Durant...), and the NBA's global marketability .
This deal is a win-win for the NBA since the players and owners will be making more money. This is a good thing for the league. There will be no way for this deal to backfire. The NBA is too popular.
Wednesday, October 29, 2014
How TV's Sports Addiction Could Destroy Its Business
http://www.theatlantic.com/business/archive/2014/10/how-televisions-sports-addiction-could-ultimately-destroy-its-business/381147/
Over the weekend, the NBA signed a deal with ESPN and TNT worth $24 billion between 2016 and the 2024-2025 season. The association got this deal for a couple of reasons.
I think this deal is good for the NBA even if expanded basic cable keeps getting more expensive and unaffordable. ESPN is strong enough to handle any threat to pay-TV's business by directly charging its core fans. Consumers and potential consumers will purchase TV bundles because of live sporting events.
Over the weekend, the NBA signed a deal with ESPN and TNT worth $24 billion between 2016 and the 2024-2025 season. The association got this deal for a couple of reasons.
- The decisive leadership of the new commissioner Adam Silver, most known for the handling of the Donald Sterling racism issue, is making the NBA something fans can watch and respect at the same time.
- The league's superstars (LeBron James, Kevin Durant, Blake Griffin, Chris Paul) are international stars that can make the NBA more marketable globally.
- The NBA's rating have grown in the last ten years.
I think this deal is good for the NBA even if expanded basic cable keeps getting more expensive and unaffordable. ESPN is strong enough to handle any threat to pay-TV's business by directly charging its core fans. Consumers and potential consumers will purchase TV bundles because of live sporting events.
Wednesday, October 15, 2014
Can rich countries afford the Olympics?
http://money.cnn.com/2014/10/07/news/olympics-norway-cost/index.html
Norway has pulled out of the race to host the 2022 Winter Games, leaving only Being, China and Almaty, Kazakhstan in the running.
Norway is a wealthy nation and passionate about winter sports. The logical explanations on why the country declined hosted are...
1) "There's too much wining and dining... It doesn't fit with Norwegian culture," said a government source from Norway. The fanciness of the Olympics was too much for them. They rather keep it simple and just hold good events.
2) The Norwegian citizens were not convinced that the money spent would have been too much and decided it was not worth holding the 2022 Winter Games. Norway is one of the developed nations that is struggling with ballooning debt and voter opposition, that opens the door for more developing nations, who are more likely to gain from showing themselves to the world.
Despite of the trend of developed nations dropping Olympic bids since 2000, rich countries will still participate holding the games. Salt Lake City (United States) might bid for the 2026 Winter Games.
The more reasonable reason for Norway not holding the games is '2)'. National debt is limiting developed nations' ability to hold big global events and share their culture and gain revenue.
Norway has pulled out of the race to host the 2022 Winter Games, leaving only Being, China and Almaty, Kazakhstan in the running.
Norway is a wealthy nation and passionate about winter sports. The logical explanations on why the country declined hosted are...
1) "There's too much wining and dining... It doesn't fit with Norwegian culture," said a government source from Norway. The fanciness of the Olympics was too much for them. They rather keep it simple and just hold good events.
2) The Norwegian citizens were not convinced that the money spent would have been too much and decided it was not worth holding the 2022 Winter Games. Norway is one of the developed nations that is struggling with ballooning debt and voter opposition, that opens the door for more developing nations, who are more likely to gain from showing themselves to the world.
Despite of the trend of developed nations dropping Olympic bids since 2000, rich countries will still participate holding the games. Salt Lake City (United States) might bid for the 2026 Winter Games.
The more reasonable reason for Norway not holding the games is '2)'. National debt is limiting developed nations' ability to hold big global events and share their culture and gain revenue.
Thursday, October 9, 2014
Women CEOs stand by the NFL
http://money.cnn.com/2014/10/08/news/companies/nfl-women-ceos/index.html
I am surprised by this: The CEOs (female) of Pepsi, Campbell Soup, and General Motors look like they will be sticking with the NFL amid its domestic violence issues. None of them said they would pull its sponsorship if the league does not do enough to eliminate or at least greatly reduce the amount and intense levels of violence against women and children.
The NFL gets $150 million per year from those sponsors with Pepsi being the largest at $100 million. The league needs to be careful about how they deal with this violence epidemic; they could lose a lot of marketing revenue and credibility from just about everyone.
Amheuser-Busch has been the NFL's most critical sponsor saying how unsatisfied they are with the league's handling of this situation, and the league would really go down quickly if they dropped it sponsorship.
I agree with the CEO of the Women's Sports Foundation saying no CEOs should give Goodell a pass! He needs to be held accountable for his actions (or lack of them) and punished for not properly dealing with the domestic cases (Ray Rice is an example). If the punishment is dropping him from his commissioning position, then so be it!
I am surprised by this: The CEOs (female) of Pepsi, Campbell Soup, and General Motors look like they will be sticking with the NFL amid its domestic violence issues. None of them said they would pull its sponsorship if the league does not do enough to eliminate or at least greatly reduce the amount and intense levels of violence against women and children.
The NFL gets $150 million per year from those sponsors with Pepsi being the largest at $100 million. The league needs to be careful about how they deal with this violence epidemic; they could lose a lot of marketing revenue and credibility from just about everyone.
Amheuser-Busch has been the NFL's most critical sponsor saying how unsatisfied they are with the league's handling of this situation, and the league would really go down quickly if they dropped it sponsorship.
I agree with the CEO of the Women's Sports Foundation saying no CEOs should give Goodell a pass! He needs to be held accountable for his actions (or lack of them) and punished for not properly dealing with the domestic cases (Ray Rice is an example). If the punishment is dropping him from his commissioning position, then so be it!
Monday, October 6, 2014
Why Kevin Durant chose Nike over Under Armour
http://www.sbnation.com/2014/9/3/6098457/kevin-durant-nike-contract-under-armour
After a summer when Under Armour and Nike were fighting to sign NBA All Star, Kevin Durant, Nike won after they offered a $300 million deal over the next 10 years. It started when K.D. was in his final months of a 7 year and $60 million contract with Nike. While that went on, Under Armour dropped him with a massive offer worth $265-$285 million, and it included company ownership and a recreational center that would be named after his mother. This put a ton of pressure on Nike to match or exceed the big deal.
After a summer when Under Armour and Nike were fighting to sign NBA All Star, Kevin Durant, Nike won after they offered a $300 million deal over the next 10 years. It started when K.D. was in his final months of a 7 year and $60 million contract with Nike. While that went on, Under Armour dropped him with a massive offer worth $265-$285 million, and it included company ownership and a recreational center that would be named after his mother. This put a ton of pressure on Nike to match or exceed the big deal.
Under Armour only had 0.35% of the market share on basketball shoes at the end of 2013 while Nike and Brand Jordan held 93%, so there was very little evidence that big names would go to a smaller corporation, but the probability of that occurring was not 0. They did sign Stephen Curry
in 2013, so the company hoped that would help them jump into the NBA. Signing Durant would have
been a huge profitable gain.
Under Armour sold $30 million in
basketball shoes last season, whereas K.D.generated $85 million alone in 2013. They could have blown up
Durant and generated enough sales to more than make up for
the reported $30 million/year cost of signing him, which would make it a no-brainer to pursue him.
Despite of the failed signing (for Under Armour), it was still a good move. The company had a lot of buzz this summer, so they might have sold more shoes because of that. If U.A. would have been successful in the signing, then they would have been a top name with Nike in the NBA very quickly!
Wednesday, October 1, 2014
College sports thrive amid downturn
http://espn.go.com/espn/otl/story/_/id/10851446/sports-programs-nation-top-public-colleges-thrived-economic-downturn-earning-record-revenues
Many of the nation's wages and number of jobs have decreased by the Great Recession of 2008; however, sports program at NCAA's Division 1 have actually thrived as the payrolls increased by 40%. With how successful how NCAA sports are doing, there has been more light on this: Should collegiate athletes get paid?
Being paid like professional athletes; no. Many of the student-athlete on scholarship do not have to pay for any tuition and get free room & board and unlimited meal-plans, so they are not suffering from not getting paid.
Getting paid for cost of living in the cities the colleges are located at; it is still a no. Even though operating revenues at all schools (from academic year 2007-2008 to 2012-2013) have gone up by 32% with much for that begin attributed from the higher demand for millions of Americans wanting to watch college sports, the students should be going to school to go to class and get a degree instead just going to the professional sports leagues. Despite of football player Northwestern University success in being able to unionize, students are students, not employees, so college athletes should not get paid.
Many of the nation's wages and number of jobs have decreased by the Great Recession of 2008; however, sports program at NCAA's Division 1 have actually thrived as the payrolls increased by 40%. With how successful how NCAA sports are doing, there has been more light on this: Should collegiate athletes get paid?
Being paid like professional athletes; no. Many of the student-athlete on scholarship do not have to pay for any tuition and get free room & board and unlimited meal-plans, so they are not suffering from not getting paid.
Getting paid for cost of living in the cities the colleges are located at; it is still a no. Even though operating revenues at all schools (from academic year 2007-2008 to 2012-2013) have gone up by 32% with much for that begin attributed from the higher demand for millions of Americans wanting to watch college sports, the students should be going to school to go to class and get a degree instead just going to the professional sports leagues. Despite of football player Northwestern University success in being able to unionize, students are students, not employees, so college athletes should not get paid.
Sunday, September 14, 2014
Explaining Indian Sports Weakness through Economics
http://centreright.in/2014/08/explaining-indian-sports-weakness-through-economics/
With as many people in India's population, I thought this nation would be a sports machine; however, I was completely wrong. It struggles to emerge as a sports powerhouse despite of the fact that very few countries can match the country's craze for sports, especially at college and high school levels. A strong showing in most sports are very rare, with the exception of cricket and hockey (when it was played on grass). It could be that Indians for averse to violent sports like American football and wrestling since they like to view them as luxury. There are a couple arguments that make sense of this.
1) In recent years, millions of dollars have been spent on new sports equipment, dietary supplements, and playing surfaces; however, the money spent has not helped India out. For their decline in hockey, it is directly correlated to the switch from grass to artificial turf and scarcity of artificial turf in India today, so the country's advancement in sports technology has not aided them to dominance.
Another strong point is that cricket receives disproportionately large share of attention, and that affects the rest of the sports monetary and non-monetary. A big, wide gap between the skill and talent of international and domestic player also exists which gets rid of some of the demand for Indian sports; therefore, the presence of the '80-20' rule is in effect. This means 80% of the attention and rewards are trapped by 20% of the sports and the rest 80% struggle to survive, and that point leads to the next argument.
2) Many people in India decide not to pursue sports too strongly as a career since sports offer incredibly short shelf lives. The rewards earned for the investment tend to come in an even shorter time-frame when the athlete is at their peak, and the biggest rewards of money and fame tend to go to the best-of-the-best athletes while most athletes struggle to stay in a sport for more than 3-4 years. There is also a element of opportunity cost. A person has to allocate a lot of time, money, and other resources and trade off with loss of free time, money, and family sacrifices.
For a prospective of a Indian sportsperson, figuring out a career path is not easy, but the uncertainty in a career a sports make it less attractive as there are many options available with greater stability, security, and durability, like engineering to medicine to law to science etc. It is cheaper to pursue other careers. There are more resources in other careers and, it is easier to become wealthy in fields that are not sports related. This could be why an average Indian would rather to go to U.S.A. on an IT/engineering/management education/assignment instead of aiming for sports scholarships.
Overall, the main reason why India is not a athletic powerhouse is because India is economically and technologically successful. As long as the United States need computer geniuses and doctors, India will not as athletes.
With as many people in India's population, I thought this nation would be a sports machine; however, I was completely wrong. It struggles to emerge as a sports powerhouse despite of the fact that very few countries can match the country's craze for sports, especially at college and high school levels. A strong showing in most sports are very rare, with the exception of cricket and hockey (when it was played on grass). It could be that Indians for averse to violent sports like American football and wrestling since they like to view them as luxury. There are a couple arguments that make sense of this.
1) In recent years, millions of dollars have been spent on new sports equipment, dietary supplements, and playing surfaces; however, the money spent has not helped India out. For their decline in hockey, it is directly correlated to the switch from grass to artificial turf and scarcity of artificial turf in India today, so the country's advancement in sports technology has not aided them to dominance.
Another strong point is that cricket receives disproportionately large share of attention, and that affects the rest of the sports monetary and non-monetary. A big, wide gap between the skill and talent of international and domestic player also exists which gets rid of some of the demand for Indian sports; therefore, the presence of the '80-20' rule is in effect. This means 80% of the attention and rewards are trapped by 20% of the sports and the rest 80% struggle to survive, and that point leads to the next argument.
2) Many people in India decide not to pursue sports too strongly as a career since sports offer incredibly short shelf lives. The rewards earned for the investment tend to come in an even shorter time-frame when the athlete is at their peak, and the biggest rewards of money and fame tend to go to the best-of-the-best athletes while most athletes struggle to stay in a sport for more than 3-4 years. There is also a element of opportunity cost. A person has to allocate a lot of time, money, and other resources and trade off with loss of free time, money, and family sacrifices.
For a prospective of a Indian sportsperson, figuring out a career path is not easy, but the uncertainty in a career a sports make it less attractive as there are many options available with greater stability, security, and durability, like engineering to medicine to law to science etc. It is cheaper to pursue other careers. There are more resources in other careers and, it is easier to become wealthy in fields that are not sports related. This could be why an average Indian would rather to go to U.S.A. on an IT/engineering/management education/assignment instead of aiming for sports scholarships.
Overall, the main reason why India is not a athletic powerhouse is because India is economically and technologically successful. As long as the United States need computer geniuses and doctors, India will not as athletes.
Wednesday, August 27, 2014
The NFL's Most Valuable Teams
http://www.forbes.com/sites/mikeozanian/2014/08/20/the-nfls-most-valuable-teams/
Some of the teams in the NFL are not reaching the high standards that many fans thought they should be doing now. Six teams are not worth $1 billion which includes two markets that would normally be goldmines in the sports industry, San Diego and St. Louis. The NFL is heavily lacking in one of the biggest markets in the entire United States, Los Angeles. The league does not have a team in that area anymore, and the NBA and MLB are the talk of the town with the $2 billion sale of the Clippers after Donald Sterling was kicked out and the steady success of the Dodgers. Could the NFL be losing its popularity in the states and role of the best sport in America?
That is not likely the case, and that might be far from the truth.
The National Football League is actually being the most successful it has been in years. The football teams have seen their value increase by an average of 23% since last year. The average value of the teams are $1.43 billion, the highest value in the last 17 years, and none of the teams are worth lower than $900 million. Even the least valuable team, the St. Louis Rams, at $930 million, is more wealthy than the average NBA ($643 million average) and MLB ($811 million average) franchise, and the team could see a huge jump in revenue in the not-too-distant-future.
Several NFL owners said there will probably be an announcement with two years to two NFL teams moving into Los Angeles and sharing a new stadium. The teams that could be moved and get more valuable are the San Diego Chargers (7th least valuable NFL team and near LA), Oakland Raiders (5th least valuable NFL team with prior success in LA during the 1980s), Jacksonville Jaguars (4th least valued team), and St. Louis Rams (least valuable franchise also with previous LA success).
Going away from the league's least profitable markets, there are plenty of teams that have been super successful. The Dallas Cowboys (worth $3.2 billion (also the second most valuable team in the world only behind Real Madrid which is worth $3.4 billion)), New England Patriots (worth $2.6 billion), Washington Redskins (worth $2.4 billion), and New York Giants (worth $2.1 billion) have seen their value soar at least 30% during the past year. Financially speaking, these franchises are doing very well, and many other teams are also being just as stable as these teams. The value of the New York Jets, Philadelphia Eagles, Chicago Bears, and San Francisco 49ers each rose by at least 30% during the past year.
These markets and other NFL markets have been growing more and more with broadcasting deals as football is the most popular sport on television, and being popular will pay off. Broadcasting deals with NBC, ESPN, CBS and Fox that begin with the 2014 season will increase revenue by $250 million over the next four years. Additionally, the league’s one-year Thursday Night Football deal with CBS will add $275 million in revenue to the league this season, and the NFL’s deal with DirecTV - which offers streaming options - should rise substantially from its current $1 billion a year fee to the league given how important the NFL is to the satellite TV provider.
Some of the teams in the NFL are not reaching the high standards that many fans thought they should be doing now. Six teams are not worth $1 billion which includes two markets that would normally be goldmines in the sports industry, San Diego and St. Louis. The NFL is heavily lacking in one of the biggest markets in the entire United States, Los Angeles. The league does not have a team in that area anymore, and the NBA and MLB are the talk of the town with the $2 billion sale of the Clippers after Donald Sterling was kicked out and the steady success of the Dodgers. Could the NFL be losing its popularity in the states and role of the best sport in America?
That is not likely the case, and that might be far from the truth.
The National Football League is actually being the most successful it has been in years. The football teams have seen their value increase by an average of 23% since last year. The average value of the teams are $1.43 billion, the highest value in the last 17 years, and none of the teams are worth lower than $900 million. Even the least valuable team, the St. Louis Rams, at $930 million, is more wealthy than the average NBA ($643 million average) and MLB ($811 million average) franchise, and the team could see a huge jump in revenue in the not-too-distant-future.
Several NFL owners said there will probably be an announcement with two years to two NFL teams moving into Los Angeles and sharing a new stadium. The teams that could be moved and get more valuable are the San Diego Chargers (7th least valuable NFL team and near LA), Oakland Raiders (5th least valuable NFL team with prior success in LA during the 1980s), Jacksonville Jaguars (4th least valued team), and St. Louis Rams (least valuable franchise also with previous LA success).
Going away from the league's least profitable markets, there are plenty of teams that have been super successful. The Dallas Cowboys (worth $3.2 billion (also the second most valuable team in the world only behind Real Madrid which is worth $3.4 billion)), New England Patriots (worth $2.6 billion), Washington Redskins (worth $2.4 billion), and New York Giants (worth $2.1 billion) have seen their value soar at least 30% during the past year. Financially speaking, these franchises are doing very well, and many other teams are also being just as stable as these teams. The value of the New York Jets, Philadelphia Eagles, Chicago Bears, and San Francisco 49ers each rose by at least 30% during the past year.
These markets and other NFL markets have been growing more and more with broadcasting deals as football is the most popular sport on television, and being popular will pay off. Broadcasting deals with NBC, ESPN, CBS and Fox that begin with the 2014 season will increase revenue by $250 million over the next four years. Additionally, the league’s one-year Thursday Night Football deal with CBS will add $275 million in revenue to the league this season, and the NFL’s deal with DirecTV - which offers streaming options - should rise substantially from its current $1 billion a year fee to the league given how important the NFL is to the satellite TV provider.
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