Thursday, September 8, 2011

The NFL's most valuable teams

Sept 07, 2011 | by Kurt Badenhausen

The average National Football League team is now worth $1.04 billion, 1.4% more than last year. During the 2010 season average revenues for the league’s 32 teams rose 4% compared with the previous season, to $261 million. Although operating income (earnings before interest, taxes, depreciation and amortization) fell 8.1%, to an average of $30.6 million per team due to higher costs for stadium operations, training facilities and marketing, the new collective bargaining agreement will give owners a bigger slice of overall revenue.

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.

“The new CBA provides owners with a level of certainty as well as greater profitability,” says Marc Ganis, president of consultancy SportsCorp. The 10-year deal, the result of a four and a half month lockout of its players, ensures labor peace for the next decade as neither side can opt of the agreement.

Owners will pay players 47% to 48% of total revenues under the new pact, down from 51% under the old CBA. We estimate the NFL’s 32 teams generated a total of $8.3 billion in revenue last year, which is a 4% gain from 2009 (our figures include the net proceeds the teams receive from sources like merchandise and NFL.com).

Under the new CBA, teams will receive around $250 million per year more at first based on the new revenue split. That figure will climb substantially as the league negotiates new television contacts over the next 12-months. The current deals with CBS, ESPN, FOX and NBC expire after the 2013 season and owners are expecting increases up to 60% on the current $3.1 billion average annual value of those deals (DirecTV brings in additional $1 billion each year). Given the league’s high television ratings and the lust males between the age of 18 and 45 have for watching football, such a boost is not inconceivable.

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