Today's National Football League team is a $6.5 billion business.
That’s the average value of the NFL’s 32 teams, according to CNBC’s official 2024 NFL team valuations. Professional football teams have been lucrative assets for owners in the most popular sports league in the United States: The returns they’ve seen on their initial investments dwarf the gains of traditional stocks over similar time periods.
Take the Houston Texans, for example, who are ranked 11th in CNBC’s 2024 value rankings. In 1999, the last time the NFL expanded, the late Robert McNair agreed to buy the franchise for a $600 million buyout, which takes into account the payout structure and the value of the deal over time. The Texans are now worth $6.35 billion, more than 10 times McNair’s fee and three times the league’s earnings. Standard & Poor's 500 Since that year.
That's not bad for a team that has a 152-202-1 record over its 22 seasons and has never reached the Super Bowl.
And it's not just Texans.
Of the last 10 NFL teams that have been sold, seven of the 10 have outperformed the S&P 500 in terms of percentage gains since the sale. The Washington Commanders and Denver Broncos — Nos. 13 and 14 on the 2024 team rankings, respectively — have underperformed the broader market, and it’s worth noting that they’ve been sold within the past two years. The Miami Dolphins, No. 8 on CNBC’s list, also lag the S&P, but were last sold in 2009, when the stock market was coming off a bottom after taking a big hit during the financial crisis of 2007 and 2008.
High ratings
The rise in the value of football teams is primarily due to the league's huge and growing media deals.
Current NFL TV Agreements with Comcast, Disney, Paramount and fox, The value of major deals that started last season, on average, is $9.2 billion annually, which is 85% more than previous deals.
Add to streaming deals YouTube To get a Sunday NFL ticket and Amazon Prime For Thursday Night Football, the NFL is guaranteed to receive an average of $12.4 billion annually through 2032 — nearly double the $6.48 billion annually it received during the previous media rights cycle.
In addition to these comprehensive agreements, the league has worked to boost its media revenue by selling additional broadcast games.
Last season, the NFL sold the exclusive broadcast rights to a Wild Card playoff game to Comcast's Peacock streaming service for $110 million, according to a person familiar with the deal.
The league has sold three exclusive broadcast packages this season: two Christmas Day games on Netflix The league will receive about $200 million for Sunday commercial ticket rights, which allow a slew of NFL games to be broadcast in bars and restaurants, according to the person familiar with the agreements.
Together, these agreements raise total media rights fees to $357 million per team, compared to $325 million in 2023.
CNBC sources asked not to be identified to discuss details of the deals, which are not publicly available.
A detailed view of a broadcast camera with the NFL logo and ESPN Monday Night Football logo on it is seen during a game between the Chicago Bears and the Minnesota Vikings at Soldier Field in Chicago on December 20, 2021.
SportsWire Icon | SportsWire Icon | Getty Images
A rising tide lifts all boats in the NFL. The 32 teams split revenue from national media deals equally, along with money from league-wide sponsorship and licensing deals and 34% of ticket revenue. In 2023, $13.68 billion, or 67%, of the NFL’s $20.47 billion in revenue will be split equally.
When that much revenue sharing is combined with a salary cap that limits players to spending about 49% of revenue, teams in smaller markets like Green Bay, Wisconsin, and Buffalo, N.Y., can compete with big-market teams in New York and Los Angeles. The Kansas City Chiefs, ranked 18th in CNBC’s 2024 ratings, have won the last two Super Bowls and three of the last five.
But there’s still a wide gap in team values, largely because of the stadiums. Teams don’t share revenue from luxury suites, on-site restaurants, merchandise stores, sponsorships or non-NFL events at their stadiums.
And last year, that made a bigger difference than usual.
Taylor Swift performs during her The Eras Tour at SoFi Stadium in Inglewood, California, on August 7, 2023.
Allen J. Chapin | Los Angeles Times | Getty Images
Pop star Taylor Swift performed at several NFL stadiums last year as part of her successful Eras Tour, including SoFi Stadium in Los Angeles, Raymond James Stadium in Tampa Bay, Gillette Stadium in New England and Lincoln Financial Field in Philadelphia. One stop on the Eras Tour generated $4 million per show for the host stadium, according to a person familiar with the matter, who spoke on the condition of anonymity to discuss confidential information.
The Dolphins’ Hard Rock Stadium, also a stop on the ERA tour, grossed more than $30 million last year from college football games, soccer games, concerts, festivals and tennis matches — and that number could double this year, according to a person familiar with the matter.
return on investment
Revenue sharing agreements and salary caps also make the league very profitable.
During the 2023 season, the NFL’s 32 teams generated average revenue of $640 million and average operating income — earnings before interest, taxes, depreciation and amortization — of $127 million. The typical EBITDA margin for an NFL team is 19%.
The financial success of the NFL means higher premiums for team sales.
Ryan Flournoy, #18 of the Dallas Cowboys, catches a touchdown pass as Matt Hankins, #23 of the Los Angeles Chargers, defends during the first half of a preseason game at AT&T Stadium in Arlington, Texas, on Aug. 24, 2024.
Ron Jenkins | Getty Images Sports | Getty Images
2 years ago, Walmart His heir, Rob Walton, bought the Denver Broncos for $4.65 billion, or 8.8 times the team’s revenue. But these days, it would be hard for a prospective owner to pay less than 10 times revenue for a team. The average value-to-revenue multiple in CNBC’s 2024 ranking of all 32 teams is 10.2.
Last year, private equity billionaire Josh Harris bought the Washington Commanders for $6.05 billion, or 11 times revenue. Earlier this year, a potential owner considered buying the Tampa Bay Buccaneers for about $6 billion, which would have valued the team at 9.4 times revenue, according to two people familiar with the matter.
When team ownership changes, it has proven to be a smart investment.
The league's most valuable team, the Dallas Cowboys, is worth $11 billion — 73 times what owner Jerry Jones paid for the team in 1989. The S&P 500 is up just 18-fold since Jones bought the Cowboys.
The Dallas Cowboys had the league’s largest revenue last year, at $1.22 billion, and the largest operating income, at $550 million, largely due to sponsorship revenue. According to CNBC, Dallas is close to generating $250 million in sponsorship revenue, which would eclipse the NFL’s total.
Dallas Cowboys owner Jerry Jones attends training camp at River Ridge Complex in Oxnard, California, on July 24, 2021.
Jane Kamen-Oncia | Getty Images
The Los Angeles Rams, who are second on CNBC’s 2024 ratings list, also ranked second in revenue, with $825 million. The Rams also ranked second in the league in sponsorship revenue and have made a fortune hosting more than 25 non-football events at SoFi Stadium, including six full-house nights of the Swift Eras Tour and three nights of the Beyoncé Renaissance Tour, as well as concerts by Ed Sheeran, Metallica and Pink.
The Los Angeles Rams, which were in St. Louis when sports and entertainment mogul Stanley Kroenke bought the team for $750 million in 2010, are now worth $8 billion. Even factoring in the $550 million transfer fee Kroenke had to pay the league to move the team to Los Angeles, as well as a $571 million settlement fee related to legal challenges to the move, his investment has more than quadrupled.
The rising value of NFL teams explains why private equity firms are keen to invest in the league.
For several years, Major League Baseball, the National Basketball Association, the National Hockey League, and Major League Soccer have allowed institutional investors to buy limited partner stakes in teams. European soccer leagues such as the English Premier League have also done so.
Last week, the NFL followed suit. The league’s owners voted to allow a select group of private equity firms — Ares Management, Sixth Street Partners, Arctus Partners, and a consortium of Dynasty Equity, Blackstone, Carlyle Group, CVC Capital Partners, and Lodis — to buy up to 10% stakes in NFL teams. The companies have committed to $12 billion in capital over a period of time, people familiar with the matter told CNBC.
Allowing private equity firms to invest in the league would make it easier to finance a team purchase.
Even the least valuable team on CNBC's list, the Cincinnati Bengals, is worth $5.25 billion.
Given the association’s $1.4 billion debt ceiling, that translates into a financial burden of $3.8 billion. Assuming the general partner maintains the required minimum of 30%, the limited partners would need to invest a combined $2.7 billion to get in the game.
Disclosure: Peacock is the streaming service of NBCUniversal, the parent company of CNBC.
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Correction: This story has been updated to correct that a potential owner was looking to buy the Tampa Bay Buccaneers earlier this year for about $6 billion, according to two people familiar with the matter. A previous version misstated the identity of the interested party.
