When thinking about a professional sports franchise’s impact on a city and a region, the economics are found in jobs created, money spent by the patrons attending games (e.g., ticket sales, team merchandise, parking, and concessions), transportation costs, and meals/entertainment expenditures prior to and after the game.

What we have done here is survey sports franchises selected by this author that we felt might provide a good basis for understanding the economic impact through the lens of the five major American professional sports leagues. We have selected the Los Angeles Dodgers (MLB), Tennessee Titans (NFL), New England Revolution (MLS), Minnesota Wild (NHL), and finally the Phoenix Suns (NBA). We had no preconceptions when starting our research about what we would find, but we tried to select teams in major and minor television markets with geographic diversity as well.

Here is what we found:

The Los Angeles Dodgers – Major League Baseball (MLB)

  • $2.15 billion: Purchased by Guggenheim Partners in 2012 (e.g., Guggenheim Baseball Management)
  • $2.75 billion: Forbes Team Valuation; Breakdown: Sport $500M; Market $1.355B; Stadium $441M; Brand $455M (April 2017)
  • $4.1 billion: Money spent on sporting events in Los Angeles (2013)
  • $462 million: Team revenue (Operating Income $-20.5M; Player Expenses -$275M)
  • $148 million: Gate Receipts (2016)
  • $67: Revenue per fan (2016)
  • 1 million: Metro Area Population (2016)
  • 7 million: Dodger game attendees (2016)
  • Jobs: Specific data for the Dodgers difficult to know, but consider everything from parking attendees to Los Angeles Police Department contracts; thousands of jobs added and protected according to the Los Angeles Chamber of Commerce because of the sports industry in general (2012)

The Tennessee Titans – National Football League (NFL)

  • $25,000: Purchase price in 1959, still owned by the Kenneth Adams, Jr. family
  • $2 billion: Forbes Team Valuation; Breakdown: Sport $1.422B; Market $262M; Stadium $215M; Brand $101M (September 2016)
  • $19.7 million: Music City Bowl Game direct economic impact (2014)
  • $342 million: Team revenue (Operating Income $73M; Player Expenses -$169M)
  • $48 million: Gate Receipts (2016)
  • $65: Revenue per fan (2016)
  • 8 million: Metro Area Population (2016)
  • 517,273: Titans game attendees (2016)
  • Jobs: No data readily available in our initial search

The New England Revolution – Major League Soccer (MLS)

  • Investment unknown: The Revolution franchise was a part of the initial ten team league where the MLS owned the franchises and investors were “owners.”
  • $185 million: Forbes Team Valuation (September 2016)
  • $192.2 million: economic impact of the Boston Marathon (2017)
  • $27 million: Team revenue (Operating Income $7M, 2016; Player Expenses -$5,800,118M, 2017)
  • Gate Receipts: Data unavailable at time of search
  • $79: Revenue per fan (estimate: total team revenue divided by Revolution game attendees)
  • 4.6 million: Metro Area Population (2016)
  • 343,150: Revolution game attendees (2016)
  • Jobs: No data readily available in our initial search

The Minnesota Wild – National Hockey League (NHL)

  • $225M (2008), $370M (2015): Purchase prices for the franchise
  • $400 million: Forbes Team Valuation; Breakdown: Sport $81M; Market $148M; Stadium $122M; Brand $49M (November 2016)
  • $1.3 billion: Money spent on sports stadiums in Minnesota (2011)
  • $136 million: Team revenue (Operating Income $5.6M; Player Expenses -$74M)
  • $55 million: Gate Receipts (2016)
  • $31: Revenue per fan (2016)
  • 3.5 million: Metro Area Population (2016)
  • 781,879: Wild game attendees (2016)
  • Jobs: No data readily available in our initial search

The Phoenix Suns – National Basketball Association (NBA)

  • $404 million: Purchase price (2004)
  • $1.1 billion: Forbes Team Valuation; Breakdown: Sport $434M; Market $335M; Stadium $218M; Brand $113M (February 2017)
  • $1 billion: Money spent on building sports stadiums and subsidizing big events (2014)
  • $173 million: Team revenue (Operating Income $26.3M; Player Expenses -$85M)
  • $36 million: Gate Receipts (2017)
  • $23: Revenue per fan (2017)
  • 4.5 million: Metro Area Population (2017)
  • 708,639: Suns game attendees (2017)
  • Jobs: No data readily available in our initial search

Here are some thoughts after analyzing the data:

  • The NFL’s national television contracts and marketing deals versus baseball’s regional contracts drives the value of franchises through the roof where teams are sharing revenues. This is proven by the fact that the Tennessee Titans, a much smaller market team when compared to the Los Angeles Dodgers, can be worth nearly as much as the Dodgers
  • The economic impact does not include the taxes, subsidies, and the like that go into building and maintaining sports franchises (e.g., sports stadiums, road, and transportation infrastructure)
  • Not all sports are created equal financially
  • All sports are growing economically from year to year

The economic impact that professional, and collegiate teams/schools, have on cities and regions is significant. The above is only a sample, but is shows the breadth of the impact as it varies from state to state, city to city, and league to league.  Professional sports franchises are like any other business, some are run better and accepted by the local populace than others and it shows in the economic impact figures.

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About The Author

Editorial Writer
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Jeremy M. Evans is the Managing Attorney at California Sports Lawyer®, representing sports and entertainment professionals in contract drafting, negotiations, licensing, and career growth. Evans is an Outreach Captain for the Sports Lawyers Association and is an award-winning attorney and community leader. He can be reached at [email protected] or via his website: www.CSLlegal.com.

One Response

  1. Alex Dean

    It’s cool to know that a sport’s team being in a city, actually has a great impact on the city that they are in. Even though not all sports are created equal when it comes to fiances, but each one will try to benefit the city and state that they are currently in. I think it’s cool that a sports team will try to do that for those around them.

    Reply

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