It is boom times for professional sports team owners as they capitalize on their greatest financial advantage: DVR-proof programming in a fractured TV environment. Sports teams are awash in cash today thanks to multibillion-dollar media deals around the globe.
The undisputed TV king in the world of sports is the NFL, which kicked off new network deals last year worth more than $5 billion a year, not including its $1.5 billion-a-year pact with DirecTV. The NBA inked a $2.66 billion-a-year deal in October with ESPN and TNT, which was triple the previous rate. Regional sports networks are committing to long-term deals with baseball teams, like the Los Angeles Dodgers’ 25-year, $8.35 billion contract with Time Warner Cable TWC +1.38%. The English Premier League joined the party in February with a $2.7 billion-a-year pact with Sky, which kicks off in 2016 and represents a 70% bump on the current deal.
Sports teams are not resting on their riches. They are searching for the next goldmine with new streaming services and daily fantasy games. Baseball is pouring resources into its digital and technology arm, MLB Advanced Media, which is equally owned by MLB’s 30 teams and has been valued at $10 billion.
The world’s 50 most valuable sports teams are now worth $1.75 billion on average, up 31% from 2014. The minimum valuation to make the cut is $1.15 billion, versus $856 million a year ago, thanks largely to the soaring worth of NBA and MLB teams. The top 50 includes 22 baseball and basketball franchises, compared to only 10 in 2014.
The NBA and MLB may be hot right now, but the world’s most valuable team still resides in Spain. Real Madrid ranks first for the third straight year at $3.26 billion, edging out a couple of iconic American sports franchises in the Dallas Cowboys and New York Yankees, which tie for second at $3.2 billion.
Real Madrid won its record 10th Champions League crown in 2014 and had the highest revenue in all of sports at $746 million. Real banked a profit of $171 million on the backs of top talent like Cristiano Ronaldoand Gareth Bale. Real and main rival Barcelona benefit from how TV money is distributed in La Liga. Clubs cut their own deals in La Liga, instead of going through collective bargaining like other European soccer leagues. The result is the highest broadcast revenue in sports at $277 million.
Despite the top billing, it was a relatively rough year for the Spanish soccer powerhouse. The value of the franchise is off 5%, thanks largely to the decline of the euro against the dollar. Real reached the Champions League semifinals for a fifth straight year, but failed to win the European competition or La Liga. Coach Carlo Ancelotti was axed by the club’s president, Florentino Perez, in May. The cruelest blow from a financial perspective might have come in February when Madrid’s regional high court shot down plans for the club to expand the club’s stadium, Santiago Bernabéu, with new seating, shopping and a hotel complex. The club still hopes to push forward with the renovation.
The Yankees lead a group of 12 MLB teams, up from six last year, in the top 50. Credit the massive influx of TV money, both nationally and locally, for soaring baseball values. The Yankees were one of the first teams to recognize the importance of TV with their launch of the YES Network in 2002. It has been the most-watched regional sports network in 11 of the past 12 years. Yankee Global Enterprises retains 20% of the RSN with Fox owning 80% after upping their stake in 2014.
The value of the Yankees is up 28%, and the team moved up two spots to tie for second place. The 27-time world champions missed the postseason for the second consecutive season in 2014 and only the third time since 1994, but the Bronx Bombers still finished tops in the American League in attendance, averaging 42,520 fans per game. The Yankees generated $676 million in revenue before deducting for $90 million in revenue-sharing payments and $78 million in bond payments that go towards stadium debt.
The Cowboys have been the NFL’s most valuable team for the past eight years (the Washington Redskins were the last football team to rank ahead of Dallas in 2006). The team’s home, AT&T T -1.11% Stadium, is a cash cow. The Cowboys generate more than $100 million annually from both premium seating and sponsors, anchored by their 25-year, $500 million stadium naming rights deal with AT&T. The Cowboys are the most profitable team in sports with operating income of $246 million thanks to revenue that is 31% higher than any other NFL team and the NFL’s salary cap.
Rounding out the top five are a pair of global soccer powers with Barcelona at No. 4 worth $3.16 billion and Manchester United fifth at $3.1 billion.
Forbes has valued teams in the major sports leagues since 1998. The top 50 is based on Forbes’ valuations done in the past year for the NFL, NHL, NBA, MLB, F1, soccer and Nascar. Our team values are enterprise values (equity plus debt) based on current venue deals (unless a new venue is pending).
The NFL landed the most teams in the top 50 with 20 franchises, followed by MLB (12), NBA (10) and soccer (7). Formula one’s most storied squad, Ferrari, made the cut at No. 32 worth $1.35 billion and the NHL landed one team on the list with the Toronto Maple Leafs tied for No. 37 at $1.3 billion. There are 51 teams this year thanks to a three-way tie at No. 49 with the Atlanta Braves, Dallas Mavericks and Minnesota Vikings all worth $1.15 billion by our count. There are 62 sports franchises globally worth at least $1 billion.