Biz Blitz: How Donald Sterling will make NFL owners a lot wealthier

The Bottom Line: The eventual LA Clippers sale will bump the value of every NFL franchise.

It’s tough to set the value of pro sports because sales don’t happen every day. Comparable values of recent sales are how your real estate agent guesses the value of your property.

Forbes Magazine’s valuation of NBA franchises relative to their NFL counterparts provides a clue.

The average NFL franchise is worth 2.3 times the value of the average NBA team ($1.171 billion to $509 million). Forbes ranks Donald Sterling’s LA Clippers as the NBA’s 13th most valuable team at $575 million. Forbes ranks the Denver Broncos as the NFL’s 13th most valuable team at $1.161 billion. Both franchises are right around league average value.

A winning bid for the Clippers could range from $700 million to a cool $1 billion. If the NBA’s 13th most valuable franchise can sell in that range, the NFL’s 13th most valuable franchise should keep pace by floating up to $2.3 billion. Every other NFL team would step up in place.

NFL Commissioner Roger Goodell at the next owners’ meeting will made Donald Sterling’s 19th century ideas a case study of how not to create a labor conflict with your minority majority employees. NFL owners will be more interested in hearing how Sterling’s gaff, that gets worse with every interview, is increasing their net worth.

Pushing the value up and up

The harder Sterling fights to keep his ownership stake, the harder the NBA will work to find the price to incent him to go away before the Clippers negotiate new broadcasting agreements in 2015. The value of those agreements will swing up if Sterling is out of the picture, but be less if broadcasters must sell commercial time to sponsors squeamish about both of the Sterlings.

Ten celebrities expressed interest in bidding for the team. Take seriously the billionaire tech and real estate entrepreneurs who bring business moxie that could help the league grow. That is who team owners would find acceptable members of the club.

Oracle founder Larry Ellison and recording mogul David Geffen are known to be collaborating on a bid with Oprah Winfrey as a public face. Magic Johnson backed by the investment firm Guggenheim Partners is also a candidate to bid.

Johnson has an outsized presence second only to Michael Jordan as a retired NBA star. He parlayed his basketball income to a far-flung business empire, including a four percent stake in the LA Lakers. Johnson and Stan Kasten bought MLB’s LA Dodgers in 2012 for $2 Billion.

Forbes upped its valuation of the Dallas Cowboys to $2.3 Billion after that sale.

The NBA sees poetic justice in a Johnson ownership. Johnson presumably would keep the Clippers in Los Angeles even with a less favorable lease at Staples Center.

Point after

Why does the NFL have a continuing interest in Europe? A Forbes story touting David Stern’s accomplishments as NBA commissioner contains the following nugget.

“One of the attractions to the NBA for new owners is the global nature and potential of the sport, which are much greater than with baseball and American football. More than half of the 42 million daily page views on originate from outside of North America.”

NBA China, jointly owned by all 30 NBA franchises, is a going concern valued at $1.7 billion. The NBA has more international players drawing more global interest than the NFL. The NBA’s social media engagement dwarfs both the NFL and MLB.

American football’s appeal is cultural. It is unique to an American audience and not easily exported beyond our shores. Lord knows the NFL has tried.

A new franchise in London won’t fix that. The NFL could take a page out of the NBA’s playbook and try to make American football an Olympic sport.

Photo credit:

Feb 13, 2013; Los Angeles, CA, USA; Los Angeles Clippers owner Donald Sterling and wife Rochelle Sterling (Shelly Sterling) react during the game against the Houston Rockets at the Staples Center. Mandatory Credit: Kirby Lee-USA TODAY Sports

About Anthony Brown

Lifelong Redskins fan and blogger about football and life since 2004. Joined MVN's Hog Heaven blog in 2005 and then moved Redskins Hog Heaven to Bolguin Network. Believes that the course of a season is pre-ordained by management decisions made during the offseason. Can occasionally be found on the This Given Sunday blog and he does guest posts.