Owning a Sports Team
Owning a Sports Team
When you are wealthy, there are a number of things that you may be interested in buying. Of course, there is the Rolls Royce, the ocean view mansions, the Gulfstream jet, and the custom-built yacht. However, if you really want to flex on the ultrawealthy, then you want to go ahead and own a sports team. So what is the appeal of owning an MLB, NFL, NBA, or NHL team? Here’s a look at what drives the ultra wealth to own a top sports team.
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What do people buy sports teams?
While there are a number of ultra-wealthy people who prefer to remain low profile, there are several other billionaires who live in the limelight. For instance, billionaires like Mark Cuban, is not just a host on the TV show “Shark Tank,” he is also the Dallas Mavericks NBA team's owner. However, a high profile isn’t the only reason to own a sports team. Sports teams have continued to rock in value. Consider the fact that Mark Cuban purchased the Mavericks in the year 2000 for $285 million. Today, the Mavericks are worth over $2 billion. That’s almost a 1,000% return on investment over 20 years or an annualized return of 50%. Try getting that in the stock market.
How much does it cost to own a sports team?
If you want to own one of the four major U.S. sports teams, be prepared to break out a big checkbook. Currently, you will have to spend at least $500 million to buy an NHL team, at least $1 billion to buy an MLB or NBA team. If you want to go big time and get an NFL team, then you have to be prepared to spend at least $1.5 billion.
How do sport team owners make money?
Sports team owners can make money in a bunch of different ways. First, there are the ticket, concession, and parking sales at the stadium. Also, sports team owners get a cut of sales from away games. Then there are the broadcast rights for the game. Finally, there is merchandising sales. Owning a sports team is a big business that generates up to hundreds of millions of dollars per year.
What are the richest sports teams?
You may have a good idea about which sports teams may be the most valuable. You would assume that the New York Yankees and the Dallas Cowboys would be near the top of the list. Well, you will be correct. Both teams are worth a whopping $5 billion each. Rounding up the top five of most valuable teams, including the New York Knicks and the Los Angeles Lakers, both worth $4.6 billion. In fifth place are the Golden State Warriors, worth $4.3 billion.
The major sports team that is run as a non-profit
Believe it or not, there is a major NFL team that a billionaire does not own. In fact, it is a non-profit entity! The Green Bay Packers NFL team is the only major U.S. sports team that is operated as a publicly owned non-profit company. Thus, the Packers have remained in the small market of Green Bay, Wisconsin, since 1925.
The unique world of sport team owners
Owning a sports team is probably one of the most exciting ways a billionaire can make his money. It’s no wonder why so many wealthy people want to join the ranks of sports team owners. The value of these teams should only go up in the future.
REFERENCE:
https://www.wsj.com/articles/so-you-want-to-own-a-sports-team-11571416055
https://www.nuwireinvestor.com/incredible-roi-owning-sports-franchise/
