We all know there’s big money in sports, but do you know just how big? Manchester United, the world’s most popular sports team, has 400 million fans worldwide. There’s only ~310 million people in the US and no one outside our borders cares what Jeter and the Yankees do this season, despite being the third most valuable sports franchise.
What this boils down to is team value. Forbes values ManU at $2.23 billion, Real Madrid at $1.88 billion and the Yankees at $1.85 billion. There’s big money in sports. We’ve plucked out five facts we think are notable in the world of valuation:
- The most notable point, by far, is that the two teams with the greatest increase in value are both in Los Angeles. The next two teams on the list are in Spain (FC Barcelona and Real Madrid). We get the California angle, but is Forbes watching what’s going on in Spain? Not so sure about that.
- As bullish as a $1.4bn valuation might sound for the Dodgers, the team was purchased by Guggenheim Baseball in April for $2bn which was based on an impending local TV deal that is expected to be worth nearly $3.5bn in cash and equity. Steve Forbes is probably getting several angry phone calls this week questioning valuation math.
- Despite the Juventus Football Club moving into a new stadium this year with a 49% increase in capacity, it fell off the top 50 list and was replaced by the Texas Rangers. Now valued at $674mm, the Rangers won the AL West only to lose in the World Series for the second straight year in game 7. Regardless, attendance reached Franchise history highs and the team struck a 20yr cable deal with Fox Sports Southwest beginning in 2014 valued at $3bn.
- Only 5 of the top 20 clubs are Football/Soccer.
- 12 of 20 are US rules (NFL) Football. There’s a little snippet for NFL fans that hate soccer.
So who’s the big player in all of this? If you guessed Nike (NKE), you’d be correct. Endorsements are serious business and the company pays the big bucks ($40 million for ManU alone) to replicate uniforms for resale to the public. It is anticipated that come 2015 when Manchester United’s current deal with Nike expires, they will be looking to ink a deal worth up to £600m over 10 years, which breaks down to about $95 million annually.
Best of luck to ManU and their upcoming $300 million IPO.