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The Value of a Sports Franchise

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  • Description

    Forbes managing editor Michael Ozanian on what makes sport franchises attractive to the investor.

  • Duration 3:03
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And trans fats -- since the beginning of this year full major sports teams have changed ownership the -- selling for two billion dollars in March.

The highest amount ever paid for a sports franchise.

Joining us today is -- losing informs managing editor and co host of these sports finance shows sports money on the yes network so.

Mike thanks for joining us -- -- we look we have the Dodgers the Padres looks like that deal's gonna go through the jaguars and the browns in the NFL.

Also older about the -- so watch the attraction.

The attraction is rising TV revenue -- in baseball you're talking TV specifically.

To you mentioned there -- local TV rights fees are gonna go from fourteen million dollars a year.

230 million this year under new deal with fox sports San Diego in football you're talking about national TV rights with the networks.

Those fees are up between 75 and 80%.

In the new deal which hasn't hit yet but well in a couple years.

So this doesn't depend on -- the team does I mean you know some of these franchises of -- certainly the Padres but it doesn't mean that.

Because of these TV deals you still getting good value it matters a lot in baseball how you're doing.

Because the local TV deals are capped by the home team and football you have national TV deals all the money -- split evenly.

For the browns the attraction -- you have a team.

Since its reincarnation in 1999 has lost 67% of its games they can't sell out all its tickets its sponsorship and suite revenues very -- they have the lowest ticket prices in the NFL.

The upside there as you start putting a winning team on the field.

The new owner can charge more for suites sponsorships and hopefully sell out as well that's the big revenue increase there.

In baseball for the Padres it's getting that 20% equity stake in the new regional sports network that's the long term attraction of owning that team for the new buyer but -- -- -- such -- TV deals why the -- up for sale.

Well because the outgoing owners sometimes have a state problems divorces would mr.

wars in San Diego -- -- You know sometimes.

You're just trying to get your state together in the case of the -- it's interest thing.

The elder Lerner who bought the -- the expansion franchise he passed away I think it was 2002.

About three years -- after he bought the team.

His son his war -- that in soccer.

He bought the English soccer team Aston Villa citing in his case that's really where he wants to focus his attention that's deployed -- -- little poll asked them their Laurence Sunderland all owned by US.

Entity is if you like so obviously they -- -- the European sports Franken is up franchises as well outside of the US that's while the European soccer teams particularly -- the English teams.

They're television deals -- also been going through a big bull market if you will.

They got a big increase in the local deal and -- international rights fees may actually double when they do that deal early next year.

We need is money -- zany and thank you so much appreciate.

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