Why the explosion in the valuation of sports teams?
Sports are widely popular, attracting billions globally as both entertainment and social events. Teams’ values have risen rapidly in recent decades, with the world’s top 50 being worth 30% more than the previous year, the largest increase in the last five years.
This growth is fueled by increased investment in sports, driven by technological advancements in live TV viewing, which has boosted TV contracts and team values. People also have more leisure time now than before, and many spend it on sports, driving their popularity and revenue. The growth and ease of legal gambling has also played a role in the increased engagement in sports.
Top Ten Sports Teams by Value
- Dallas Cowboys – $8.0 billion (American Football)
- New England Patriots – $6.4 (American Football)
- Los Angeles Rams – $6.2 (American Football)
- New York Yankees – $6.0 (Baseball)
- New York Giants – $6.0 (American Football)
- New York Knicks – $5.8 (Basketball)
- Chicago Bears – $5.8 (American Football)
- Golden State Warriors – $5.6 (Basketball)
- Washington Commanders – $5.6 (American Football)
- Los Angeles Lakers – $5.5 (Basketball)
Source: Forbes
Listed above are the ten highest valued sports teams in the world, all of which are American Sports franchises, with six playing in the National Football League (NFL), three in the National Basketball Association (NBA) and one in Major League Baseball (MLB).
This was not always the case, with multiple European football teams such as Real Madrid, FC Barcelona and Manchester United being in the top ten a few years ago. These three football teams even topped the list as close as 2019. The main reason these clubs have dropped off the list is the lucrative TV and media contracts the American leagues have secured, especially the NFL who agree upon the richest media deal in sports, being worth $112 billion through 2032.
They are able to secure these contracts as American audiences are generally wealthier, so will pay more for the product and are also more attractive to advertisers, partly due to more stoppages in their sports. The franchise structure in US leagues also secures investment and benefits all teams through revenue sharing, unlike European football’s relegation system.
Dallas Cowboys – $8.0 billion (American Football)
The Cowboys joined the NFL as an expansion team in 1960 and have made it to 8 Super Bowls, winning 5, both second-most in history. With a national following, they hold an NFL record of 190 consecutive sell-outs, earning the nickname “America’s Team.” Their large fan base was built during dominant runs in the 1970s and 1990s and a streak of 20 winning seasons from 1966-1985. The Cowboys remain the world’s most valuable team due to their large fan base and $1.2 billion stadium built in 2009, despite limited recent success with only 4 playoff wins in the past 25 years.
New England Patriots – $6.4 (American Football)
The New England Patriots are an NFLl team based in Foxborough, Massachusetts. They are members of the AFC East division in the NFL and have won an impressive 6 Super Bowl championships since 2002, making them the joint most successful NFL franchise. The team is owned by Robert Kraft and led by the legendary coach, Bill Belichick. The Patriots have a large and dedicated fanbase that extends across the five states of the New England region. Their home games are played at Gillette Stadium, located 22 miles outside of Boston.
Los Angeles Rams – $6.2 (American Football)
Third on the list is the LA Rams, benefitting from recent on field success, appearing in Super Bowls in 2020 and 2022, winning the latter, the second in the franchises history. They are often criticised amongst fans for not having a large and passionate fan base, largely stemming from their move from St Louis to Los Angeles back in 2016. However, the Rams have history in LA prior to this and it is largely this move back into a major media market along with their state of the art SoFi Stadium that has boosted their growth.
New York Yankees – $6.0 (Baseball)
The Yankees, the only MLB team on the list, were founded in 1901 and are the most successful baseball team with 27 titles and an all-time winning percentage of 57%. Much like the next two teams on the list they thrive in the large New York market and have managed to market their famous NY logo, which is seen on merchandise across the globe. The team has had numerous legendary players over the years, including Babe Ruth, Lou Gehrig, Joe DiMaggio, Mickey Mantle, and Derek Jeter and is currently owned by the Steinbrenner family.
New York Giants – $6.0 (American Football)
The second team on the list that calls New York home, the Giants also take advantage of the large fan base in the Big Apple. They were one of five teams that joined the NFL in 1925, which may be a factor helping them outcompete the rival New York Jets on and off the field. They share Metlife Stadium with the Jets, but evidently this does not hold back their value. The Giants have won a total of 4 Super Bowls which is tied for fifth, two of which came fairly recently in 2007 and 2011.
New York Knicks – $5.8 (Basketball)
The third and final New York based team and the first basketball team on this list are the New York Knicks. The team has won two NBA Championships, in 1970 and 1973, however have failed to find much success since the turn of the century.. The Knicks play their home games at the world famous Madison Square Garden, which is located in Manhattan and used for other large events such as concerts and boxing fights. The Knicks are currently owned by The Madison Square Garden Company and capitalise on the New York media market, signing a new 20-year media rights deal in 2016, worth $100 million in the first year.
Chicago Bears – $5.8 (American Football)
The Bears are based in Chicago Illinois and have won one superbowl, back in 1985. They call the legendary, but somewhat outdated, Soldier Field home. Despite their lack of recent success they hold the record for the most hall of fame players and have the second most victories in NFL history. These records stem from the fact they are one of two original NFL franchises still standing.
Golden State Warriors – $5.6 (Basketball)
The Warriors value has increased rapidly over the last decade, even compared to other franchises on this list. This is largely due to the success of the team on court over the last eight years, winning four championships and reaching another two finals. The team looked to capitalise upon this success and global superstar Steph Curry by moving to their new stadium, the Chase Center. Located in San Francisco, California, it is worth over $1.5 billion and helps maximise ticket revenue and host other large scale events.
Washington Commanders – $5.6 (American Football)
The Washington Commanders, formerly known as the Redskins, were established as an NFL franchise in 1932. In 1937, the team relocated to Washington and adopted the Redskins moniker, which it held for several decades. However, due to various social and media pressures, the team recently decided to change its name and is now known as the Washington Commanders. Historically, the franchise is one of the most successful in the NFL, boasting over 600 total wins, putting it in the ranks of only five other teams in the league with this distinction. Throughout the team’s storied history, they have won three Super Bowl championships.
Los Angeles Lakers – $5.5 (Basketball)
The third most valuable NBA franchise and last on our list is the Los Angeles Lakers. The Lakers have won a total of 17 NBA Championships, tied for the most in the league with the Boston Celtics. They have had many legendary players, including Magic Johnson, Kareem Abdul-Jabbar, Kobe Bryant, and LeBron James, many of which were attracted to the Hollywood lifestyle and business opportunities LA provides. The Lakers play their home games at the Crypto.com Arena and are currently owned by Jeanie Buss. The Lakers are in the midst of a $4 billion local television deal with Time Warner that spans 20 years, beginning in 2012.
Takeaways and Looking Forward
As we have mentioned, the list is completely filled with American sports franchises, which have boomed in values in recent years. The globalisation of sports and ever expanding media market appears to play a role along. America’s commercialisation of their sports allows for the most money to be extracted, reflected in the teams value.
Historic success and recent success on field do seem to play a role in a team’s value, but are far from necessary to be high on the list. The size of the media market the team resides in seems to be significant, with half the top ten being based in LA or New York.
There does not appear to be a slowdown in team values on the horizon with continued expansion in sports. It will be vital for many of these teams to maintain their sporting success to hold their position on this list. However, some brands will remain so strong that success is not needed to increase value, such as the top of the list Dallas Cowboys.
