The Chart of the Week is a weekly Visual Capitalist feature on Fridays.
Every team’s general manager starts off with the same goal: to build a franchise that contends for championships year in and year out.
However, with the nature of the business being what it is, the odds are stacked against any team trying to achieve this. Out of close to 30 teams in most leagues, only one franchise can come out on top with a championship. And with unprecedented parity in most major leagues, every management decision is a crucial one. One smart draft choice or trade can put a team in a position to win, but a single mistake can also make a team a perennial bottom dweller.
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Owners have a similar perspective, but they also want to build a franchise that is worth money in the long-run. To do that, they need to consider factors outside of winning: merchandise sales, sponsorships, costs, and other business decisions need to be made. They need to figure out how to capture the imagination of fans, and how to salvage the value of a franchise even when they are losing most games.
Today’s chart, using data from Forbes, is a hat tip to the teams that are lucky enough to count themselves among the most valuable in the world. Further, we also look at how the list has changed over time, and what happens to the valuations of franchises that are fortunate to be contenders on an ongoing basis.
What Makes a Team Valuable?
Multi-billion dollar sports teams don’t just grow on trees.
Instead, the massive value assigned to teams like the Dallas Stars or Manchester United is the culmination of a variety of important factors: market size, fan appeal, sport economics, international cross-over potential, profit, success, history, and many others.
Here’s a Top 10 List of the world’s most valuable sports teams – and how that list has changed since 2010.
The ranking list has a few big takeaways on what is needed to become a valuation monster:
Market size matters:
New York and Los Angeles do very well for valuation, even without many recent championships. These places are home to millions of fans, as well as massive amounts of dollars to be made from sponsors and media rights.
Recent success helps:
The Patriots have made seven Super Bowl appearances since 2000, cementing the franchise as one of the most valuable sports teams in the world.
Recent failures hurt:
The Redskins haven’t won a playoff series since 2005 (Wildcard) – and partially as a result, they have fallen out of the Top 10 ranking for the most valuable sports teams in 2017.
History is a factor:
Manchester United hasn’t won the EPL in the last few years, but the club’s history speaks for itself. The Yankees have been mediocre in the last five years, but fans know they’ll be back eventually.
Sport economics are key:
Why are there so many NFL teams on the Top 50 list? The economics just work better, and it translates to team valuations.
What’s unique about Manchester United, the Yankees, or the Patriots? You’ll see people wearing their gear all around the world – they have rare cross-over appeal to international markets, and this means more dough.
Championships and Team Value
It’s clear that winning has a role in team value – but how big of a difference can it make?
Next, we’ll look at how value has changed for teams that have been particularly successful in recent years, like the Golden State Warriors, New England Patriots, and Chicago Blackhawks.
Golden State Warriors
The Warriors franchise is worth +622% more than it was back in 2010, thanks to recent success. The team has made the finals in each of the last three years – and they’ve taken home the Larry O’Brien NBA Championship Trophy twice.
New England Patriots
Like other perennial champions, the Pats have their fair share of detractors. Team owner Robert Kraft likely doesn’t care though – his team is now worth $3.4 billion, a 150% increase in value since 2010. They also have the hardware to show for it.
Despite a storied history as an “Original 6” team in the NHL, the Blackhawks found themselves in a bit of a funk in the 2000s. That all changed in 2006 and 2007, when the Blackhawks drafted Jonathan Toews and Patrick Kane – and now the team has won three Stanley Cups since 2010.
Recent winning streaks do help – and championships translate to other value categories as well. Winning builds the team’s history and brand, converts bandwagon fans, and helps teams create an international presence.
Or as the late Al Davis often said, “Just win, baby.”
One Team Towns
To finish, here’s a final visualization that highlights the valuations of franchises in “One Team Towns” – cities in North America that each hold only one of the Big Four (NFL, NBA, MLB, NHL) franchises.
Of course, once the Raiders move to Las Vegas after their current lease expires, this map will change once again.
Article by Jeff Desjardins, Visual Capitalist