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 Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation 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

                                Recent Developments

                                Nov 14, 2022 - Cryptocurrency Deals may Slow After Exchange Bankruptcy Filing
                                • Sports teams may eschew long-term deals with cryptocurrency firms after troubled crypto exchange FTX filed for US bankruptcy protection, according to industry experts. The Miami Heat NBA team dropped the FTX name from their arena, ending a 19-year deal signed with FTX in 2021 for $135 million. The ever-evolving nature of sports sponsorship means that other emerging categories could come to the fore, said Larry Mann, partner at sports marketing and media agency rEvolution. "While crypto might be cooling off as an emerging category, there are always other growth areas to watch -- sports betting, CBD, Fintech, are a few examples to keep an eye on," Mann said.
                                • About 33% of Americans anticipate going into debt after splurging on their favorite teams this fall, according to financial services company LendingTree. Sports fans plan to spend $664 on average, but planned expenditure differs by age. Generation Z (ages 18 to 25) plans to spend $464, Millennials (ages 26 to 41) plan to spend $645, Generation X (ages 42 to 56) plans to spend $827, and Baby boomers (ages 57 to 76) plan to spend $641. Millennials are the generation most likely to spend on sports, with about 50% planning to do so.
                                • Success on the playing field is not always a prerequisite for financial success. Sports business website Sportico has valued the Dallas Cowboys NFL football franchise at $7.64 billion, making it the most valuable franchise across all sports. The team has not won an NFL championship in 27 years, has posted a 4-11 playoff record since winning its last title, and hasn't advanced beyond the second round of the postseason since winning its last title. The Cowboys have topped Forbes’ list of the most valuable sports franchises every year since 2016. “They’re still ‘America’s Team,’” said Kurt Badenhausen, a reporter at Sportico. “They’re still the most watched team. Every network wants as many Cowboys games as they can get. They have the largest fanbase in the country.”
                                • 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.”
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