papazoid Posted September 8, 2011 Share Posted September 8, 2011 The biggest winners are high-revenue team owners who will see their revenue sharing payments to their low-revenue rivals drop. In part this explains why the value of the top 10 teams rose 4% on average. There is a growing divide between the rich and poor NFL franchises (poor being a relative term as all 32 teams rank among the 50 most valuable sports teams in the world). Supplemental revenue sharing payments to low revenue teams under the old CBA were expected to rise to $220 million with high rolling teams like the Cowboys, Washington Redskins (No. 2, worth $1.55 billion) and New England Patriots (No. 3, worth $1.4 billion) supplying much of the welfare and on the hook for more than $10 million apiece. Under the new CBA, the amount any big market teams will have to kick into the system is capped at $3.5 million. Low revenue teams will receive only $50 million to $100 million collectively in the early years of the deal according to NFL estimates. Leaguewide revenues are expected to increase to the point where supplemental revenue sharing almost disappears by the end of the new 10-year CBA. The new CBA hurts teams at the bottom of the financial pyramid as well because beginning in 2013, teams must spend 89% of the salary cap in cash or be subject to penalties. Keeping a lid on player costs allowed the Tampa Bay Buccaneers to be football’s fourth most profitable teams over the past five years. The Bucs’ player costs were $35 million lower than any other team during that time and $150 million less than the Cowboys. The Chiefs, Bills and Bengals have also kept spending in check fattening up the bottom line. That is not an option anymore. While the value of the top teams is up, the bottom 10 stayed flat on average. http://www.forbes.com/sites/kurtbadenhausen/2011/09/07/the-nfls-most-valuable-teams/ Link to comment Share on other sites More sharing options...
Beerball Posted September 8, 2011 Share Posted September 8, 2011 #29 in value #8 in profit With the help of the big city teams won't this # increase at least until the Bills are 'forced' to spend to the cap? Link to comment Share on other sites More sharing options...
GG Posted September 8, 2011 Share Posted September 8, 2011 #29 in value #8 in profit With the help of the big city teams won't this # increase at least until the Bills are 'forced' to spend to the cap? I guess Littman has earned his salary. Link to comment Share on other sites More sharing options...
Mr. WEO Posted September 8, 2011 Share Posted September 8, 2011 Forbes: Bills low on valuation, high on income This has been true most years over the past decade. But hey, what about the "LA premiuim", that makes the Bills actually worth "1.2-1.3 billion"? The 1.85 number for the Cowboys is a joke. If they went on the market tomorrow, they wouldn't get close to that. Link to comment Share on other sites More sharing options...
GG Posted September 8, 2011 Share Posted September 8, 2011 The 1.85 number for the Cowboys is a joke. If they went on the market tomorrow, they wouldn't get close to that. They probably will get more than that. A marquee property like that doesn't come on the market too often. Plus a 15x multiple is very reasonable for the Cowboys. Giants, OTOH would hvae to sell at 32x to get to their Forbes value. Link to comment Share on other sites More sharing options...
Mr. WEO Posted September 8, 2011 Share Posted September 8, 2011 They probably will get more than that. A marquee property like that doesn't come on the market too often. Plus a 15x multiple is very reasonable for the Cowboys. Giants, OTOH would hvae to sell at 32x to get to their Forbes value. It's more like 2.5 billion with the debt. Besides, there are so few likely buyers that it would be a buyers market. Link to comment Share on other sites More sharing options...
GG Posted September 8, 2011 Share Posted September 8, 2011 It's more like 2.5 billion with the debt. Besides, there are so few likely buyers that it would be a buyers market. Franchise value, as all enterprise values, includes the debt in the calculation. Link to comment Share on other sites More sharing options...
Thoner7 Posted September 8, 2011 Share Posted September 8, 2011 these values are always high. in 2005 the Vikings were sold for 600 mil. Just last year, a minority owner of teh Rams bought the rest of the team to be the sole owner. If you do the math on that deal, the team sold for 650 mil. Now the Vikings are valued at 796 mil and the Rams at 775 mil. Ironically enough the Bills are sandwhiched right in between those two teams. Considering the Rams have a fairly new indoor stadium I doubt the Bills sell for much more than 650, max of 700 mill. And for the record, a 640 million dollar investment yeilding 40 mill a year in revenue is only 6% ROI. That sucks for an investment of that size. Thats not counting appreciation obviously, which is unrealized. Link to comment Share on other sites More sharing options...
Mr. WEO Posted September 8, 2011 Share Posted September 8, 2011 Franchise value, as all enterprise values, includes the debt in the calculation. The value of the Cowboys has steadly increased--it has been listed as 1.85, 1.8, 1.7, 1.65, 1.5 billion the past 5 years. When did JJ's $650 million stadium debt get factored in? Link to comment Share on other sites More sharing options...
billsfan89 Posted September 8, 2011 Share Posted September 8, 2011 If the Bills actually strung together a couple of winning seasons (3 out of 4 seasons with 10 or more wins) I think the value will only go up. This team is down as far as winning goes and the value would go up more so if it was perceived more so as a winner. Link to comment Share on other sites More sharing options...
GG Posted September 8, 2011 Share Posted September 8, 2011 (edited) The value of the Cowboys has steadly increased--it has been listed as 1.85, 1.8, 1.7, 1.65, 1.5 billion the past 5 years. When did JJ's $650 million stadium debt get factored in? Forbes footnote says that the franchise value "is without deduction for debt." It does exclude stadium related debt, likely due to how NFL runs the 3G program. But in Cowboys' case, if you include the stadium debt, then you have to add the value of the stadium (which generates money outside JJ's NFL operations). Forbes is trying to pin a value just on the NFL franchise. Edited September 8, 2011 by GG Link to comment Share on other sites More sharing options...
Mr. WEO Posted September 8, 2011 Share Posted September 8, 2011 Forbes footnote says that the franchise value "is without deduction for debt." It does exclude stadium related debt, likely due to how NFL runs the 3G program. But in Cowboys' case, if you include the stadium debt, then you have to add the value of the stadium (which generates money outside JJ's NFL operations). Forbes is trying to pin a value just on the NFL franchise. I think I said that. Anyway, there has not been a sharp jump in the value during the construction of or the completion of the stadium. The stadium revenue hasn't really been realized yet and likely pales in comparison to the debt. The best paying customers for the use of the JerryDome...is Jerry, unfortunately for him. Link to comment Share on other sites More sharing options...
DE Bills Fan Posted September 8, 2011 Share Posted September 8, 2011 these values are always high. in 2005 the Vikings were sold for 600 mil. Just last year, a minority owner of teh Rams bought the rest of the team to be the sole owner. If you do the math on that deal, the team sold for 650 mil. Now the Vikings are valued at 796 mil and the Rams at 775 mil. Ironically enough the Bills are sandwhiched right in between those two teams. Considering the Rams have a fairly new indoor stadium I doubt the Bills sell for much more than 650, max of 700 mill. And for the record, a 640 million dollar investment yeilding 40 mill a year in revenue is only 6% ROI. That sucks for an investment of that size. Thats not counting appreciation obviously, which is unrealized. Actually, it is much, much less when you factor in the Present Value of the future cash flows. it all depends on what your hurdle rate is as 6% in some industries is not a bad return. Link to comment Share on other sites More sharing options...
SF Bills Fan Posted September 8, 2011 Share Posted September 8, 2011 I wonder where the tipping point for franchise valuations are? The point where it doesn't make sense to buy a team because the ROI is too little compared to the cost? There will always be people that are waelthy enough to buy a team like Warren Buffet, Larry Ellison etc, but would they want to? It would seem that at some point in the not too distant future, there will come a point where buying a team in a smaller market, like Minn or St. Louis won't make sense becasue you will need to take on too much debt and need a new stadium (that you will need to fund) in order to make money, but even then you will pay over a billion and make 20 million a year. Even with a strong league like the NFL and projected growth in revenue, it just seems like it won't make sense. Link to comment Share on other sites More sharing options...
RTW2012 Posted September 8, 2011 Share Posted September 8, 2011 If the Bills are 29th out of 32 teams, then aren't they one of the NFL's least valuable teams? Link to comment Share on other sites More sharing options...
dpberr Posted September 8, 2011 Share Posted September 8, 2011 I thought the Forbes article was lousy. Didn't just give you a list. No, it had to be a list in pictures. I don't buy these numbers. There are teams with debt to their eyeballs, and that's why they played hardball with this most recent contract. So what that the team is worth X. If you want to buy the team, you really want to take on all of the existing debt too? To me, a mountain of debt degrades a team's "worth" to a buyer. Debt is the 800lb gorilla that Forbes and the NFL doesn't want to talk about. Link to comment Share on other sites More sharing options...
BillsfaninFl Posted September 10, 2011 Share Posted September 10, 2011 The Bills owner has been maximizing the team's value for years now. Ralph makes an occasional spin comment, but really doesn't care about having a winning team. Nix and Gailey are caretaker staff, but the power is with the financial guys. I can't believe so many people here refuse to accept this. Link to comment Share on other sites More sharing options...
kota Posted September 10, 2011 Share Posted September 10, 2011 (edited) Isn't it the point of business to maximize profit? People love spending other people's money. Going into the Red by getting overpriced free agents isn't a solid business plan. Edited September 10, 2011 by kota Link to comment Share on other sites More sharing options...
Pondslider Posted September 10, 2011 Share Posted September 10, 2011 Isn't it the point of business to maximize profit? People love spending other people's money. Going into the Red by getting overpriced free agents isn't a solid business plan. Right because it's either one or the other. There's no way they could spend more money without losing money? Link to comment Share on other sites More sharing options...
PearlHowardman Posted September 10, 2011 Share Posted September 10, 2011 You are not alone. The Buffalo Bills are moving. Someone with a chunk of money is gonna buy the Bills and move them. That's why I suggest everyone start watching the SU Orange football team. The Orange are never going to leave CNY. And I know there's already a significant SU Orange football following in Rochester & Buffalo because my company sells a lot of SU merchandise there. Not so much in smAlbany, though. Link to comment Share on other sites More sharing options...
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