Sports Teams and Clubs

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 700 sports teams in the US participate in live sporting events before a paying audience. The industry includes professional and semi-professional teams but does include leagues. Major sources of revenue include admissions fees; broadcast and other media rights; advertising; events produced under contract; and meals, snacks, and beverages. Major sports include baseball, basketball, football, hockey, and soccer.

Dependence on Broadcast/Media Rights

Broadcast and media rights account for almost one-third of revenue.

High Labor Costs

The sports industry is labor-intensive; labor costs account for about 40% of sales.

Industry size & Structure

The average sports team employs about 100 workers and generates about $48 million annually.

    • The sports team industry consists of about 700 firms that employ almost 74,000 workers and generate almost $35 billion annually.
    • The industry is concentrated; the top 50 companies account for over 60% of industry revenue.
    • The most valuable NFL teams include the Dallas Cowboys, the New England Patriots, and the New York Giants, according to Forbes. The most valuable MLB teams include the New York Yankees, the Los Angeles Dodgers, and the Boston Red Sox.
    • Women’s teams may be part of the same sports leagues as men’s teams (like the WNBA and the NBA) or completely separate entities.
                                Industry Forecast
                                Sports Teams and Clubs Industry Growth
                                Source: Vertical IQ and Inforum

                                Coronavirus Update

                                Jun 13, 2022 - Industry Seen As Safe Investment
                                • A weakening economy and stock market have the very wealthy looking to add a stake in a sports team to their portfolios, according to Forbes Magazine. Sports bankers say that that interest in sports teams is hotter than it has been in a long time, in part because the asset class is not tied to the performance of stocks or the economy. A sports banker currently representing the buyers for two limited partner stakes in MLB teams tells Forbes: “Whether teams are making money or losing money doesn’t matter. My clients have money, and they feel owning a stake in a sports team is a safer bet than other investments right now.”
                                • The US Senate blocked in mid-May a bill to provide $48 billion to restaurants, gyms and other small businesses hit particularly hard by the pandemic. The bill earmarked $500 million for minor league sports teams that took a significant financial hit due to COVID-19. Many of the bill’s opponents cited its impact on the federal deficit and inflation. Advocates had argued that the additional funds were needed to prevent scores of debt-ridden small businesses from closing down.
                                • Federal and local health officials are leaving it up to people to assess if they need booster shots, whether to wear a mask, and how long to isolate after a positive test, according to The Wall Street Journal. Businesses, schools, and other entities are scaling back specific guidelines. The lack of effective treatments, vaccines, and widespread testing early in the pandemic resulted in social distancing mandates and lockdowns. The response is becoming more tailored to people’s own health and appetite for risk, as those tools help blunt the worst outcomes as the virus continues to spread, according to public-health experts. “The history of public health has been a constant tension between individual-level and government or community-level intervention,” said Megan Ranney, an emergency-care doctor and academic dean of the Brown University School of Public Health.
                                • Demand is strong for its traditional loan programs now that the Paycheck Protection Program is winding down. “In our footprint, we’re seeing a significant uptick in both the number of loans and dollars disbursed for our microloan and 504 loan programs,” said Angel Marschik, deputy district director for the SBA’s Western Pennsylvania District Office in Pittsburgh. “Our flagship 7(a) loan program numbers are on pace with second-quarter data from fiscal year 2021. As more lenders move away from PPP forgiveness processing, we anticipate those number to increase as well.”
                                • Attendance at sports events may decrease if the number of new COVID-19 cases continues increasing. New COVID-19 case rates increased in early June, with the seven-day rolling average increasing to roughly 118,000 on June 9, up from 85,630 on May 11 and 30,000 cases per day on April 8, according to a New York Times COVID-19 case tracker. Experts note that the American population has different vaccination rates, levels of previous exposure to the virus, and degrees of underlying health conditions, so the trajectory of new cases could vary. Analysts note that the data regarding new cases are getting less reliable as the public testing infrastructure continues to wind down and home test results are less likely to be reported to officials.
                                • Many legal experts agree that corporations can require COVID-19 vaccinations for employees. "Requiring a vaccine is a health and safety work rule, and employers can do that," said Dorit Reiss, a professor at the University of California Hastings College of Law. There are, however, some exceptions to a blanket requirement. A collective bargaining agreement may require negotiating with the union before mandating a vaccine. Anti-discrimination laws also provide some protections. Under the Americans with Disabilities Act, workers who don't want to be vaccinated for medical reasons are eligible to request an exemption.
                                • The Centers for Disease Control and Prevention said that cleaning once a day is usually enough to minimize the chance of coronavirus transmission in most settings. Sports teams and clubs are likely to benefit if the guidance results in lower pandemic-related cleaning costs. The CDC did identify one appropriate situation for deep cleaning: an indoor environment where a case of COVID-19 had been confirmed within the past 24 hours.
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