How Much Is an NFL Team Worth?

How much is an NFL team worth? This is a question that many people have, especially given the recent sale of the Buffalo Bills for $1.4 billion. Forbes provides some insight into the answer, based on a number of factors.

Introduction

On July 25, 2015, Forbes magazine released their annual evaluation of the value of NFL teams. For the first time in the history of the magazine, the Dallas Cowboys were valued at more than $4 billion, making them not only the most valuable sports franchise in the world, but also the first team to be worth that much. The New England Patriots were a distant second, with a value of $3.2 billion.

The values of NFL teams have been on a steady increase in recent years. In 2010, the average team was worth $1.04 billion. In 2015, that number had increased to $2.34 billion. The increase in value can be attributed to a number of factors, including increased revenue from television contracts, merchandise sales, and stadium naming rights.

The following is a list of the most valuable NFL teams, as evaluated by Forbes in July 2015.

1. Dallas Cowboys – $4 billion
2. New England Patriots – $3.2 billion
3. Washington Redskins – $2.85 billion
4. New York Giants – $2.8 billion
5 . Houston Texans – $2.6 billion
6 . New York Jets – $2.55 billion

The Business of the NFL

Running an NFL team is a costly business. The average NFL team is worth $2.58 billion, but the most valuable team, the Dallas Cowboys, are worth $4.8 billion. The NFL brings in a lot of revenue, but it also has a lot of expenses. Let’s take a look at the business of the NFL.

Revenue

The National Football League (NFL) is a professional American football league consisting of 32 teams, divided equally between the National Football Conference (NFC) and the American Football Conference (AFC). The NFL is one of the four major North American sports leagues, and the highest professional level of American football in the world. The NFL’s 17-week regular season runs from early September to late December, with each team playing 16 games and having one bye week. Following the conclusion of the regular season, seven teams from each conference (four division winners and three wild card teams) advance to the playoffs, a single-elimination tournament culminating in the Super Bowl, which is usually held on the first Sunday in February and is played between the champions of the NFC and AFC.

The NFL was formed in 1920 as the American Professional Football Association (APFA) before renaming itself the National Football League for the 1922 season. The NFL considers itself to be the oldest professional sports league in America,[1] and one of only four major professional sports leagues in North America. The NFL’s nine other members are: Major League Baseball (MLB),the National Basketball Association(NBA),the National Hockey League(NHL),and Major League Soccer(MLS).

The league generated about $9 billion in revenue during its 2017 fiscal year.[2] Each team plays 16 regular season games between September–December, totalling 256 games. Most conferences hold their championship games on different weekends so that they do not conflict; however, some exceptions do exist. In addition to these 256 games, twelve teams will play in a post-season playoff tournament that culminates with a single championship game; this game is known asthe Super Bowl, which has become one of television’s most watched annual events.

Television contracts are a large part of revenue for NFL teams; nationally televised preseason games are broadcast on various cable and satellite channels such as ESPN, TNT, and NBC Sports Network, while nationally broadcast regular season games are primarily aired on CBS, Fox, or NBC Sunday afternoons (with ESPN broadcasting a Monday Night Football doubleheader most weeks). Games are also simulcast on local television stations in each market. In addition to these national broadcasts, some games are nationally telecast on Thursday nights (by CBS and NFL Network), Saturday nights (by NFL Network),and Sunday nights (by NBC).

Expenses

The biggest expense for an NFL team is player salaries and benefits. In 2017, the average player salary was $2.1 million, but certain players can make much more than that. For example, in 2018, Kirk Cousins became the highest-paid player in the NFL with a fully guaranteed contract worth $84 million over three years. With a salary cap of $177.2 million in 2018, NFL teams have to carefully manage their spending on player salaries to ensure they stay under the cap and don’t incur any penalties.

Other significant expenses for an NFL team include stadium facilities and operations, travel costs and game-day expenses such as security, ushers and concession workers. Depending on the size and location of their stadium, some teams may also have to pay rent to their local municipality or government.

Net Income

In and of itself, net income is not an accurate way to value a company or team. Just because the NFL as a whole is generating a large net income does not mean that every team is valuable. A number of factors go into determining how much a particular NFL team is worth.

Operating income is a better measure of profitability for individual teams, since it strips out the effects of revenue sharing and the league’s US$1 billion annual television contract, which is equally divided among all teams. Based on operating income, the most valuable NFL team in 2019 was the Dallas Cowboys, worth an estimated US$5.5 billion. The least valuable team was the Miami Dolphins, at US$2.0 billion.

Player expenses are by far the largest expenses for any NFL team. In 2019, player expenses were an average of US$188 million per team, or 61% of total revenues. Salaries have been increasing steadily over time as players demand a larger share of revenue. In 2020, the average salary for an NFL player was $2.7 million per year.

The Value of an NFL Team

An NFL team is worth a lot of money. They are worth so much money because they bring in a lot of revenue. The revenue comes from things like ticket sales, merchandise sales, and TV rights fees. NFL teams also generate a lot of revenue from corporate sponsorships.

Enterprise Value

The enterprise value of an NFL team is the sum of the market capitalization of the team, any outstanding debt, and any minority interests – in other words, it’s the total value of the team if it were to be bought outright.

Forbes ranks NFL teams by their enterprise value on an annual basis, and as of 2019, the average franchise is worth $2.86 billion. The Dallas Cowboys are the most valuable team in the league, with an estimated worth of $5 billion. The least valuable team is the Cincinnati Bengals, who are valued at $1.8 billion.

While enterprise value is one way to look at how much a team is worth, it’s not the only metric that can be used. For example, revenue and operating income are also important measures of a team’s financial health.

In terms of revenue, the Cowboys again lead the way, bringing in an estimated $623 million per year. The least revenue-generating team is the Buffalo Bills, who bring in an estimated $329 million annually.

Operating income is a measure of how much profit a team generates from its business operations after deducting operating expenses. The New England Patriots have been extremely successful in this regard over the years, posting an operating income of $108 million in 2017 – more than double that of any other team in the league.

Operating Income

Operating income is the figure used by most sports economists when considering the value of a team. It attempts to measure the true profitability of a team by isolating the activity that is under the control of team management. In most businesses, this would be considered revenue less all expenses except for interest, taxes, depreciation, and amortization.

For a professional sports team, however, there are other considerations. First, many of the revenue sources are not within the direct control of the team. For example, television contracts are negotiated by the league as a whole. Second, player salaries have to be considered as an expense even though they are paid by someone else (i.e., the owner). Third, depreciation is not a meaningful expense for a sports franchise since there is no actual physical asset being depreciated (e.g., a factory).

As a result, economists have slightly modified the definition of operating income for professional sports teams. For our purposes, we will consider operating income to be equal to revenue less player salaries and benefits, stadium rent or mortgage payments, and all other expenses incurred by the team directly related to its operation.”

Revenue Multiples

To find the value of an NFL team, you can use a multiple of revenue method. This approach to valuation simply takes the team’s revenue figure and multiplies it by a certain number, which varies depending on the business being valued.

For example, if you think that an NFL team should be valued at 3 times its revenues, then you would take the team’s revenues and multiply it by 3 to get its value. Using this method, a team that generates $1 billion in revenue would be worth $3 billion.

This method is often used because it is simple and easy to understand. However, it has its limitations because it does not take into account factors such as profitability, growth potential, or risk. As a result, the valuation you get using this method may not be accurate.

Conclusion

In conclusion, NFL teams are worth a lot of money. The average NFL team is worth $1.97 billion, which is a significant increase from previous years. The most valuable NFL team is the Dallas Cowboys, who are worth an estimated $4.2 billion. With revenue increasing and interest in the sport at an all-time high, it’s likely that NFL team values will continue to rise in the years to come.