There was a report recently published outlining the top 40/top 50
most valuable sports brands, by a high-profile business magazine.
Well, Real Analytics is about to burst that (incorrectly published) bubble…
We’re sorry that we have to disappoint all the Yankee fanatics and
the stick & ball sport fans, but alas there is more to the sporting world
than the United States. Much more.
According to the high-profile business publication that put the report
out they utilized their OWN proprietary formula to arrive at their
conclusions- (albeit, flawed conclusions)
The reporter who covered the story is a regular on a TV show with the
program initials SM, on the promineant cable network MSG and who has
his own web column as well. The publication is usually reliable, but in this
case we think they have not considered a variety of factors and methods.
The most likely scenario is that the publication employed an in-house
intangible or ‘name’ only valuation or third-party appraisal, as well their
use of a model of correlation between Value and Revenue. Unfortunately,
we don’t know the credibility of those methods and sources.
So, in order to ‘correct’ the somewhat questionable methods,
Real Analytics has put together the Top 5 Most Valuable Sports
Brands/Teams in the sports world, based on the reaserch mostly
derived from a high profile Auditing/Accounting firm.
Before we get to the list, a little tid-bit; The most valuable sporting events– (multiple series events) hands down is Formula One. Oh, we know your
boo-hoo’ing that fact…but it’s a stone cold lead pipe lock folks.
(our homage to the entertaining and awesome Mike & Mike)
Without further adieu here is the list. (note: exact values are nearly
impossible to attain so approx values within +-1% are utilized)
Top Five Most Valuable Sports Brands/Teams
1. Manchester United: £1.5 Billion (British Pounds)
2. Real Madrid: £1.4 Billion (British Pounds)
3. Scuderia Ferrari: $1.81 Billion (U.S. Dollars)
4. Dallas Cowboys: $1.79 Billion (U.S. Dollars)
5. New York Yankees: $1.7 Billion (U.S. Dollars)
Footnotes:
The published dollar figures consider both the intangible (theoretical)
and tangible (asset based) values of each entity. Furthermore, each value is based upon an “Arm’s Length Transaction” (A-L-T)
Obviously, it would be extremely difficult to parse out pieces of these teams. One could argue for the ‘value’ of just the teams “name” which would
be an entirely intangible valuation.
But then the Yankees would be worth significantly lower than the estimated $1.7 B. That figure includes the Yes network, the stadium, and all other subsidiaries. Same goes for all the top 5 teams/brands.
To separate out the property from the name brand would be very difficult
and not paint a true picture of the entire worth of these organizations.
Therefore a mixed valuation is the correct method. A fractional valuation
would not be practical. One has to take into account both enterprise and
equity values.
Conversely, the figures do not consider any Debt-To-Loan Ratios (D-T-L)
or outstanding debts. Strictly A-L-T Sale Values based on the entire
‘property’ -both intellectual and asset based properties.
The methods and metrics that go into a sports business valuation are very
complicated and very detailed. Some methods employed are DCF
(Discounted Cash Flow- future earnings) Capitalized Earnings, Value Added Analysis, Valuation Multiples, Weighted Averages, Broadcast Rights, Merchandising, etc.
Partial data and figures were sourced from:
Deloitte Touche LTD and FormulaMoney
One last side note, valuations are usually reliable from quarter to quarter.
So during a business cycle year, the top 3 can flip flop. But it is safe to say that the top 3 are all within a few hundred thousand dollars at any given time.
Real Analytics 