Chris Price is an award-winning journalist and public relations principal. When he’s not writing, he’s avid about music, the outdoors, and Saints, Ole Miss and Chelsea football.
Last month, news broke that the Denver Broncos were sold to the Walton-Penner group for a reported $4.65 billion, a record for an American sports team.
Most people can’t even dream of owning $4.65 billion, much less dropping that amount on a football team.
Rob Walton — the oldest son of Walmart founder Sam Walton, whose schtick included driving an old red pickup truck to appeal to the everyman — led the group that purchased the “mile high” city’s football team. It’s a daunting investment, but one the heirs of the Walmart dynasty can expect to make a significant return — maybe even doubling their money within a decade.
The NFL has 32 franchises, and they don’t hit the open market too often. The last team to be sold was the Carolina Panthers. In May 2018, hedge fund billionaire David Tepper bought the club for $2.275 billion, less than half of the Broncos’ purchase price.
The Broncos were put on the market in February after legal battles within previous owner Pat Bowlen’s family were settled. Bowlen, who purchased the team in 1984 for about $70 million, passed away in 2019.
In its 2021 valuation of NFL teams, Forbes valued the Broncos at $3.75 billion, the 10th most valuable franchise in the league. For the 15th straight year, the Dallas Cowboys were considered the most valuable franchise at $6.5 billion, while the Buffalo Bills were the least valuable at $2.27 billion. (Forbes ranked the New Orleans Saints 25th at $2.825 billion.)
It is interesting to note that in 2021 the value of each NFL franchise increased at least 10% from a year earlier, with the Tampa Bay Buccaneers increasing a league-leading 29% in value (Tom Brady and a Super Bowl championship will do that for you).
Double-digit growth in a team’s valuation is a trend that has continued for much of this century. The average NFL team value, according to Forbes, is now $3.48 billion, even as the league went through a tough 2020 dealing with the COVID-19 pandemic. It’s seen a 14% increase year over year.
One of the main reasons for the increase in NFL franchise values is the contracts the league has struck with broadcast partners to televise games over the next decade. In March, the NFL signed $112.6 billion worth of media rights deals, including extending ESPN’s rights to Monday Night Football through the 2032 season for $27.2 billion; FOX’s coverage of Sunday NFC games through 2033 for $25.2 billion; CBS’ rights to Sunday AFC action through 2033 at $23.6 billion; $22.6 billion for NBC to televise Sunday Night Football; and Amazon Prime’s $13.2 billion deal to stream Thursday night games through 2032. That will cause each team’s payout to rise from $220 million in 2021 to $377 million in 2032.
The league’s NFL Sunday Ticket contract with DirecTV is worth about $1.5 billion annually and expires after the 2022 season.
The advent of legalized gambling at in-person and/or online and mobile sportsbooks in 30 states and the District of Columbia has also driven more spectators to their screens to take in game action.
During the 2021 regular season, NFL games averaged 17.1 million viewers (TV and digital) — the highest regular-season average since 2015 and up more than 10% from 2020, according to the league.
The Walton-Penner ownership group was one of four finalists for the team, including groups led by Philadelphia 76ers and New Jersey Devils owner Josh Harris; Mat Ishbia; and investors Jose Feliciano and Behdad Eghbali.
The NFL is a cash cow. Those with the means to own teams know this and are dropping stacks of cash to get in as soon as they can. It will be interesting to see where things go from here; there doesn’t seem to be a ceiling on how profitable the NFL can be.
