What are the most valuable sports franchises?

Investing

Key Takeaways

  • All five franchises on this list belong to American professional sports leagues.
  • Out of the five franchises, three of them play in the NBA.
  • The most valuable sports franchise in the world is the Dallas Cowboys, who are worth $5.5 billion.

It is no secret that the world of sports is big business. Although sports teams may not be worth as much as Apple (AAPL) or General Motors (GM), these sports franchises are still billion-dollar assets for their owners.

Dallas Cowboys

The Dallas Cowboys are easily the most valuable sports franchise in the world. The Cowboys, owned by businessman Jerry Jones since 1989, have an estimated net worth of $5.5 billion— half a billion dollars more than the next most valuable sports franchise. 

The Cowboys benefit from the NFL’s massive television, merchandising, and licensing deals, which earn the team hundreds of millions of dollars a year. Additional sponsorships, like stadium sponsor AT&T, contribute to the team’s nearly billion-dollar revenue. 

Known as “America’s Team”, the Cowboys are one of the most successful franchises in NFL history. With five Super Bowl victories, including three in four years shortly after Jones bought the team, the Cowboys brand is synonymous with success. However, the sporting reputation of the team has suffered in recent years; the Cowboys have not won two playoff games in a row since 1995. Fortunately for Jerry Jones, these stumbles have not negatively affected the sky-high value of his team.

New York Yankees

The second most valuable sports franchise in the world, with a net worth of $5 billion, is the New York Yankees. Valued at over $1.5 billion more than the next highest franchise, the Yankees are far and away the most valuable baseball team in the world. Most of the Yankees’ value is derived from its access to the New York market and its brand as the most successful MLB franchise of all time. The Yankees have won twenty-seven World Series titles, the most titles held by a single team in any major American sport.

Like all MLB teams, the Yankees benefit from large television and sponsorship deals. For example, the MLB television deal with Fox signed in 2018 is worth 50% more than the previous contract. Additionally, the New York outfit holds a substantial stake in regional TV station YES Network, the most popular regional sports network in the country. Tickets, concessions, and merchandise sold at Yankee Stadium in the Bronx add to the $683 million the franchise earns each year.

New York Knicks

The second New York franchise on this list, the New York Knicks are valued at $4.6 billion. Similarly to the Yankees, the Knicks’ value is based on its prevalence in the crucial New York media markets and the value of its historic stadium, Madison Square Garden. While the Knicks may not have the historic or current success of its fellow New York team, a lack of winning basketball has not prevented the Knicks from being the most valuable basketball team in the world. 

As is the case with the NFL and the MLB, national television deals earn NBA franchises like the Knicks tens of millions of dollars a year. By virtue of their popularity in New York, the Knicks also earn up to a hundred million dollars a year from their local television deal. The NBA’s new jersey sponsorships have opened up new revenue streams, and the Knicks were quick to add Squarespace as its jersey sponsor in 2017. 

While the Knicks have not yet seemed to feel the financial effects of years of sustained mediocrity, the team may struggle to attract fans in the near future. With no high-profile stars and few promising young players, the Knicks are no longer a top destination for star free agents like Kevin Durant or Kyrie Irving. Instead, these players may look to the city’s other basketball team, the Brooklyn Nets, where Durant and Irving signed in 2019.

Los Angeles Lakers

The Los Angeles Lakers, valued at $4.4 billion, are the second NBA franchise on this list. Just like the Knicks, the Lakers benefit from a large hometown media market. Although the franchise has been consistently more successful than their New York counterparts, they are still slightly less valuable than the Knicks. Still, the team’s long history of championships adds to the power of its brand. Altogether, the Lakers are the fourth most valuable sports franchise in the world. 

The Lakers’ biggest financial advantage is its place as the team of Los Angeles, the second biggest media market in the US. The Staples Center may not have the clout of Madison Square Garden, but gate receipts and arena sponsorships still contribute to the team’s revenues. The Lakers added a jersey sponsor, mobile shopping app Wish, in 2017 on a three-year deal worth $30 million. 

Led by Lebron James and Anthony Davis, the Lakers won the 2019/20 NBA Finals to become the 2020 NBA champions. The trophy is the team’s 17th, tying the Lakers with the Boston Celtics for the most in the NBA.

Golden State Warriors

The fifth most valuable sports franchise and third most valuable basketball team in the world, the Golden State Warriors have capitalized on its recent success to become a global name. After five straight Finals appearances and three titles, the Warriors are now worth $4.3 billion, just behind the Lakers and Knicks. The team’s valuation is even more impressive considering the Warriors lack the natural exposure of its two competitors; while the Bay Area market is certainly big, it does not compare to the gigantic markets of Los Angeles and New York. Instead of relying on its media market or historic brand, the Warriors built their valuation through dominance on the court and shrewd business moves off it.

Star players and the championships they acquire are key to the Warriors’ success. Without Steph Curry and Klay Thompson, the Warriors would not sit near the peak of home-game attendance in the league. The team signed the largest jersey sponsorship in the league with Rakuten for an eye-watering $60 million: the company will have its logo adorn the jerseys of some of the league’s most marketable stars. After television and licensing money, the franchise earned $440 million in 2020.

As proven by the teams on this list, arenas can substantially enhance the value of a sports team. Thus, it was no surprise when the team financed a new arena that opened in 2019. The rights to the Warriors’ new home were subsequently sold to Chase for $300 million. The Warriors quickly secure $2 billion of income from the stadium before its opening, and Chase Center promises to deliver returns far into the future.

In 2010, the Warriors were bought for $450 million. Their value has increased nearly 1000% since then.

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