Private equity is boosting NFL valuations — without direct investment
A version of this article first appeared in the CNBC Sport newsletter with Alex Sherman, which brings you the biggest news and exclusive interviews from the worlds of sports business and media. Sign up to receive future editions, straight to your inbox. It’s the unofficial one-year anniversary of CNBC Sport! We soft-launched last year with the release of NFL team valuations, and here we are a year later with an updated list – our first annual update for any sport. So, before we move on, I just wanted to say a quick “thank you” for reading the newsletter, watching our weekly videocasts, listening to our podcast and for supporting CNBC Sport. OK, now that the sentimental part of our program is over, let’s get to the highlights of this year’s list – as always, put together by my colleague Mike Ozanian . It’s no surprise the Dallas Cowboys maintain their top position as the most expensive franchise in all of American sports – now valued at a whopping $12.5 billion. A year ago, the Cowboys had an $11 billion valuation. Dallas is proof that winning isn’t everything when it comes to making money. For the second year in a row, the Cowboys were the only team to generate more than $1 billion in revenue last year. Owner Jerry Jones ‘ team earned $577 million in EBITDA, thanks to lucrative sponsorship and naming rights deals. And here’s a plug for you: Later today, at 4:30 pm ET on “Closing Bell: Overtime,” Mike will speak with Jones live on CNBC – about the team’s valuation, his decision to trade star pass rusher Micah Parsons last year, and much more. I’ll link to the full interview in next week’s newsletter. The Los Angeles Rams jumped from an $8 billion valuation to $10.7 billion – a 34% increase – and maintained the No. 2 spot. At No. 3, we had our first change from 2024: The New York Giants have vaulted from the fourth-most valuable franchise to the third-most valuable, clocking in at $10.5 billion – also a 34% increase from last year. The Giants were helped by a trend that boosted team valuations around the league – the introduction of private equity cash. But what’s interesting is the private equity effect hasn’t been direct. Rather, the possibility of private equity investment has boosted valuations for minority stakes across the league. That’s pushed teams to get aggressive about selling minority stakes – and it’s led wealthy individuals to become bolder about paying up to beat out institutional capital. The Giants are in talks to sell a 10% stake in the team for $10.5 billion, sources told Ozanian. The buyer likely won’t be a private equity fund. CNBC previously reported Julia Koch was interested in buying a minority stake. Bloomberg reported Wednesday she and members of the Koch family had reached a deal with the team. There have only been three private equity deals for minority stakes in NFL teams in the past 12 months. Arctos Partners bought a 10% stake in the Buffalo Bills, and Ares Management took a 10% stake in the Miami Dolphins along with Hard Rock Stadium and the Formula 1 Miami Grand Prix. Both deals were approved in December. Arctos also bought an 8% stake in the Los Angeles Chargers in May. Still, minority stake sales to non-private equity buyers have sent teams’ valuations skyrocketing this year. Take the Chicago Bears: A deal pending NFL approval would have the existing owners of the team, the McCaskey and Ryan families, purchase a 2.3% stake owned by the estate of Andrew McKenna Sr . at an NFL record $8.9 billion valuation, a source told Ozanian. That pushed the team’s valuation up nearly 40% from last year, making it the largest year-over-year gainer. The San Francisco 49ers sold a 6.2% stake in the team in May for about $8.6 billion to three Bay Area families, pushing its valuation up from $7.4 billion last year. The Philadelphia Eagles sold an 8% stake to two family investment groups for $8.3 billion in December, adding 21% to that team’s valuation year-over-year. I don’t know if NFL Commissioner Roger Goodell foresaw a run on minority stake sales to individuals and families when the league approved private equity minority ownership of up to 10%, but it’s certainly worked to the league’s benefit. Minority sales used to come with a steep discount of about 25% because of the lack of voting rights associated with the transactions. That discount appears to have completely evaporated. The combination of private equity interest, consistently rising valuations, and the NFL’s impending opt-out clause on its media rights deal after the 2029-30 season has given investors faith that owning small stakes in teams will be smart buys. The NFL is primed to cash in again with a slew of new deep-pocketed media partners – likely including Netflix and YouTube – when it can renew its rights deals in five years. You can see the full list of NFL team valuations here. On the record With NFL RedZone host Scott Hanson … For our CNBC Sport podcast this week, I spoke with Mike about his valuations list. That chat then leads into this week’s On The Record guest: NFL RedZone host Scott Hanson . You can listen here and follow the CNBC Sport podcast if you prefer the audio version. NFL RedZone was an idea ahead of its time, and it’s hitting its stride 16 years after its 2009 debut. Legacy media companies are increasingly brainstorming ways to appeal to younger sports fans who don’t have the attention spans (or desire to sit through commercials) to watch a three-hour sporting event and prefer to watch highlights on YouTube and TikTok. RedZone – on every Sunday during the NFL season – has become a must-watch program for avid fantasy football players and gamblers who want to watch multiple out-of-market games at the same time. It’s also appealing to those younger viewers who simply don’t have the patience to watch an NFL game start to finish. Since 2009, Hanson has hosted the show, and it’s been a wonderful marriage. Hanson told me this week that his frenetic RedZone broadcasting isn’t an act. Even when relaxing at home, he watches five TVs at once. He spoke to me from his home in L.A., and if you watch the video, he even pans his Zoom screen over to his living room to show us he isn’t lying. For a few months this year, Hanson didn’t know if he was becoming an ESPN employee. It appeared possible ESPN could acquire RedZone as part of its acquisition of NFL Media assets. Alas, the NFL maintained ownership of RedZone, simply selling the linear NFL Network to ESPN. That said, ESPN’s relationship with RedZone is becoming much closer. RedZone can now be bundled for a discount with ESPN’s new direct-to-consumer product. And Hanson told me he’s waiting by the phone to hear from ESPN Chairman Jimmy Pitaro to potentially host a college football version of the show. As part of that NFL Media deal, ESPN now has the rights to the RedZone name if it would like to make versions of the show for other sports. ESPN already plans to debut such a show for next year’s U.S. Open. Hanson, who also hosts Gold Zone, a whip-around show for NBC’s Olympic sports, told me football is his favorite sport, but he’s keeping an open mind. “I’m open for business, open for suggestions, and the NFL has been decent with me in terms of allowing me to do outside projects, as long as it doesn’t disparage the NFL, conflict with my RedZone duties, or conflict with the NFL’s business interests,” said Hanson. You can watch our entire conversation here. CNBC Sport highlight reel The best of CNBC Sport from the past week: CNBC and Boardroom’s Game Plan is back for a third year on Sept. 16 in Los Angeles. The invite-only gathering will convene sports and culture leaders to explore the intersection of business, sports, music and entertainment. I’ll be there, moderating a panel on the future of college sports with Big East Commissioner Val Ackerman , Atlantic Coast Conference Commissioner Jim Phillips and Big 12 Commissioner Brett Yormark. There are still some tickets available – click here to join us in L.A. on Sept. 16. If you’ve been watching the U.S. Open this week, you may have noticed a patch on some players’ jerseys for a company called Blue Owl. CNBC’s Leslie Picker explains why Blue Owl Capital – an alternative asset management company – is backing about 100 different tennis players in tournaments around the world this year. Pickleball’s popularity is surging in China. CNBC’s Evelyn Cheng profiles the sport’s rise in China here . Cryptocurrency trading platform Crypto.com and Underdog Sports, a fantasy sports and gaming company, are partnering to offer sports prediction markets in 16 states, focusing largely on areas where sports betting hasn’t yet been legalized, reports CNBC’s Contessa Brewer . The big number: $7.65 billion The NFL has widened its lead as the most valuable and profitable sports league in the world, with the average franchise now worth $7.65 billion, according to CNBC’s Official NFL Team Valuations. That figure marks an 18% jump from last year. Quote of the week “I’ve heard every joke in the book, from, ‘Oh yeah, the seat that they give Hanson on set is actually a toilet.’ There’s some more crude options that I will spare the audience from. The truth is, I dehydrate myself, use the men’s room right before I go in on the air. And then the willpower of a ninja and the desire to serve the audience over my own biological requirements.” — Scott Hanson telling me how he hasn’t had a bathroom break in more than a decade doing RedZone. He credits the chefs at NFL Network in Inglewood, California, for feeding him “the same exact breakfast they’ve been making me for 10 years, which is dense proteins and salty, salty, dense proteins so I can retain water.” Around the league Media companies have long been willing to speak ill of the ratings company Nielsen. It’s always easy to blame poor data collection techniques for lower viewership than one hopes. But the NFL certainly doesn’t have a ratings problem, so it’s notable the league is airing its grievances about Nielsen’s methodology. Specifically, Paul Ballew , the league’s global chief data and analytics officer, questioned this week if Nielsen’s Super Bowl ratings could be trusted. In an interview with a small group of reporters, Ballew said the league’s internal surveying and “[common] sense check” has led NFL executives to believe Nielsen is undercounting “co-viewing” of the Super Bowl, or the amount of people that are watching the game on a same screen. Ballew said a poor Nielsen assumption may be underestimating the Big Game’s audience by tens of millions. To be fair, the NFL is also giving Nielsen some credit. The ratings company is rolling out a new “Big Data + Panel” way of calculating ratings that combines Nielsen’s traditional “panel” measurements with data from set-top boxes and smart TVs. Ballew called the new technique “a big step forward.” Formula 1’s McLaren Racing is now valued at more than $5 billion after a recent stake sale, Axios reported . Podcast host Pablo Torre may have busted the L.A. Clippers and its owner Steve Ballmer on circumventing the NBA salary cap by paying star Kawhi Leonard millions off the books through a now-bankrupted company. The Clippers have denied the allegation. “Neither Mr. Ballmer nor the Clippers circumvented the salary-cap or engaged in any misconduct related to Aspiration,” the Clippers said. “Any contrary assertion is provably false.” NBA spokesman Mike Bass said in a statement, “We are aware of this morning’s media report regarding the LA Clippers and are commencing an investigation.” You can watch Torre’s podcast episode here. The rapper Drake has placed a $300,000 bet on Jannik Sinner to win the U.S. Open. Given the shared dominance of Sinner and Carlos Alcaraz recently, he probably has a 50-50 chance!
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