In a seminal moment during the 2010 film “The Social Network,” Justin Timberlake’s Sean Parker character is helping Facebook founder Mark Zuckerberg (played by Jesse Eisenberg) plot a business strategy during the site’s early days.
“A million dollars isn’t cool,” he says. “You know what’s cool? A billion dollars. And that’s where you’re headed. A billion dollar valuation.”
If that’s the case in pro sports, everyone owner in the NFL, NBA, MLB and NHL is cool. Even a handful of MLS owners are, too.
Sportico’s newly released list of franchise valuations for the 154 teams in all five U.S. men’s leagues shows that every franchise in those four older leagues and five more in MLS are worth at least $1 billion.
If everyone’s cool is anyone cool?
I talked about some key big-picture and Minnesota-specific takeaways during Wednesday’s Daily Delivery podcast.
Let’s dive into more of what I found interesting at the start of today’s 10 things to know, with the help of a visualization from colleague Jim Foster:
- The rate at which all franchise values are soaring is mind-boggling. Washington from the NFL was the first billion dollar franchise valuation in any U.S. league in 2004. Now every team in the top four leagues hits that mark.
- Forbes noted that just six years ago, $5 billion was the benchmark for the highest-valued team in all the leagues. Now there are 51 teams valued at least that high, per Sportico.
- Minnesota franchise values lag compared to their peers. Each of the Vikings, Twins, Wild, Wolves and Minnesota United rank between No. 20 and No. 25 in their respective leagues in terms of franchise value. That means all are at least in the bottom half.
- But let’s not feel bad for them or their owners. The Wilf family bought the Vikings for $600 million in 2005. The Vikings are now worth 10 times that much ($6.28 billion). The Pohlad family bought the Twins for $44 million in 1984. They’re worth $1.7 billion now. The Wolves were just sold last year for $1.5 billion in a yearslong process. They’re worth almost three times as much now ($4.24 billion). The initial investment in Minnesota United for an expansion fee and stadium costs was $250 million roughly a decade ago. The Loons are worth $655 million now. Craig Leipold bought a majority stake in the Wild for $260 million in 2008. They’re worth $1.79 billion now.
- MLB’s economic disparity is on display in the valuations. The highest-valued team (Yankees at $8.39 billion) is more than six times as much as the lowest-valued team (Marlins at $1.3 billion). The ratio of biggest to smallest is roughly 2-to-1 in the NFL and 3-to-1 in the NBA, NHL and MLS.
- Every NFL team is in the top 46 and every NBA team is in the top 68 of the 154-team list. MLB and NHL values are the most comparable in terms of value. Teams in those two leagues occupy 47 consecutive spots on the list between 69 and 115. MLS franchises have the lowest valuations across the board, with Inter Miami ($1.45 billion) checking in at No. 116 as the highest-valued franchise in that league.
- Why have values skyrocketed? That probably deserves a book more than a paragraph, but a short answer is TV money. Massive national media rights deals, which have expanded in recent years to include streaming partners, have driven up values considerably. Brand and market size play big roles in the valuations as well.
- It is important, though, to note that franchise values aren’t the same as income. While they do reflect profit to a degree, their true measure is an estimate of what a team would be worth if it was sold on the open market.
- Also on Wednesday’s podcast, Chris Hine and I broke down the ups and downs of the Timberwolves. They have one more game Wednesday against Portland before a much-needed All-Star break.
- On Thursday’s podcast, Star Tribune columnist La Velle E. Neal III is expected to be my guest.
