Economist Mike Walden: The Value of Professional Sports Teams

I recently saw a listing of the estimated value of professional sports teams from all the major leagues. If my memory serves me, the lowest valued teams were in hockey, with a $500 million price tag.   In baseball, most teams were worth over $1 billion, with the Yankees leading at a $4 billion price tag.  What’s driving these enormous valuations?

  1. Teams have several sources of revenue
  2. Fans – based on attendance and ticket prices
  3. Often share in concessions
  4. Also, usually have low rents at stadium or arena
  5. Merchandise
  6. Media
  7. And then the intangible – many people who have the money want to own a team
  8. Several teams recently purchased by successful investors, including the Panthers

The Economic Perspective is an NC State Extension program from the Department of Agricultural and Resource Economics.