NFL franchise valuations

XFL Football discussion.
4th&long
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Re: NFL franchise valuations

Post by 4th&long »

johnnyangryfuzzball wrote: Tue Aug 02, 2022 6:12 pm
4th&long wrote: Tue Aug 02, 2022 12:21 pm
Agree directional with Tank, w/o the XFL USFL would have more room/time to grow. XFL is more costs heavy and has less TV revenue.

Greg, Leagues merge all the time. If it makes business sense - they will work that out. We can speculate more in a bit but AFL/NFL, AAFC/NFL, WHA/NHL, ABA/NBA even MLL and PPL etc...

If XFL bleeds money, they may not, if USFL bleeds viewers may not... Its wait and see
You don't know that. We don't know either league's revenue situation at all. Both are getting rights fees, reportedly, but that's all we can confirm.

Now, as for merging leagues. The agreement to merge the AFL and NFL was struck in the 1966 offseason. Yet it didn't take effect for four more years after that. Why? TV contracts. As long as the rights to each league were held by separate networks (NBC and CBS respectively), they could not merge without violating those contracts. They could play Super Bowls, as long as the contract was negotiated separately.

The WHA and NHL were able to merge instantly because 1) neither the NHL nor WHA had an American national TV contract at the time and 2) it was structured so that it wasn't a merger, but an admission of four expansion teams using the WHA owners and intellectual properties. You couldn't pull that off with the XFL/USFL situation. Why would Fox buy into a league that is bound to an exclusive deal with a rival network?

So because the XFL has a deal with ESPN until at least 2027, there won't be a merger between it and the USFL until at least 2028. Plus there's the problem of reconciling the two different seasons they play in, the business model, among other things.
We don't know ? We do know that Fox / NBC had $64.6mm in ad revenue pre-championship game. We do know that Collin Cowherd said both NBC and Fox turned a profit. They were public statements made by a rep of the owner of the league. We do know that NBC has a rights deal with NBC - just not how much. We have no details stated publicly on the Disney XFL deal expect the term, one story quoting an unnamed source with no exact terms is not cutting it.
Now USFL being the direct owner of a league cuts out the middleman for sure. Making $$ easier. We do know XFL is paying more for players, longer camp, stadium leases, travel costs and has much more exec staff etc...than the USFL.
That's USFL MO - the low cost operating league. XFL is leaning a bit more that way than XFL 2.0, but not significantly.

Even merger contracts can be negotiated, happens in college alot.
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Re: NFL franchise valuations

Post by GregParks »

Tank55 wrote: Tue Aug 02, 2022 11:42 am The revenue from the games that air on FOX is the ad revenue. I'd have to think they'd split the rights fees from NBC and the ad revenue on FOX with individuals owners on a 1/X per team basis.
Thanks for pointing that out. From what I've read that was relatively significant for them this year. But when talking about skyrocketing franchise valuations, which is the original topic of the thread and what any owner of a team would look to make $$ on, what I understand largely creates that increase in worth of teams is TV rights fees that go through the roof. I don't think ad revenue increases exponentially the way TV rights fees do. Perhaps as long as USFL has one partner (NBC) willing to pay them decent rights fees, they may be fine in that regard.
4th&long wrote: Greg, Leagues merge all the time. If it makes business sense - they will work that out. We can speculate more in a bit but AFL/NFL, AAFC/NFL, WHA/NHL, ABA/NBA even MLL and PPL etc...
Your examples for leagues merging "all the time" are from 1966, 1950, 1979, 1976, and 2020 respectively. In other words, once (from your own examples) in the last 40+ years. And a lot has changed in television and sports during that time. I'm certainly not saying the XFL and USFL will never merge at some point, I just don't think it's as much of a near certainty as you do.
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Re: NFL franchise valuations

Post by Tank55 »

4th&long wrote: Tue Aug 02, 2022 8:42 pmWe do know that Collin Cowherd said both NBC and Fox turned a profit.
As you well know, he said that they "made money." He did not use the word "profit."
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Re: NFL franchise valuations

Post by Tank55 »

GregParks wrote: Tue Aug 02, 2022 8:52 pm what I understand largely creates that increase in worth of teams is TV rights fees that go through the roof. I don't think ad revenue increases exponentially the way TV rights fees do.
Right, which is why it made sense for FOX to get in the sports ownership business. Rather than be forced to choose between revenue and exposure, they could own the property directly. (As I know you know, this was NBC's thought process back in XFL 2001 after they let the NFL walk.)

I guess FOX thinks there's even more money to be made selling teams off? Maybe I don't fully understand their strategy. If they sell off all eight teams, what does that make FOX? Just a broadcast partner?
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Re: NFL franchise valuations

Post by laxtreme56 »

Tank55 wrote: Tue Aug 02, 2022 10:01 pm
4th&long wrote: Tue Aug 02, 2022 8:42 pmWe do know that Collin Cowherd said both NBC and Fox turned a profit.
As you well know, he said that they "made money." He did not use the word "profit."
Plus Cowherd is just shilling for his employer. Does anyone think he really knows the leagues finances or can even decipher a P&L sheet. Ron Jaworski said the Arena League would have 20 teams, a national TV deal and 3 teams in Mexico. We see just how true that turned out to be
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Re: NFL franchise valuations

Post by 4th&long »

Tank55 wrote: Tue Aug 02, 2022 10:01 pm
4th&long wrote: Tue Aug 02, 2022 8:42 pmWe do know that Collin Cowherd said both NBC and Fox turned a profit.
As you well know, he said that they "made money." He did not use the word "profit."
That's right, you're correct. That is a distinction. I forgot.
Last edited by 4th&long on Wed Aug 03, 2022 8:22 am, edited 1 time in total.
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Re: NFL franchise valuations

Post by 4th&long »

Tank55 wrote: Tue Aug 02, 2022 10:12 pm
GregParks wrote: Tue Aug 02, 2022 8:52 pm what I understand largely creates that increase in worth of teams is TV rights fees that go through the roof. I don't think ad revenue increases exponentially the way TV rights fees do.
Right, which is why it made sense for FOX to get in the sports ownership business. Rather than be forced to choose between revenue and exposure, they could own the property directly. (As I know you know, this was NBC's thought process back in XFL 2001 after they let the NFL walk.)

I guess FOX thinks there's even more money to be made selling teams off? Maybe I don't fully understand their strategy. If they sell off all eight teams, what does that make FOX? Just a broadcast partner?
I think Fox said they would operate the league while others the teams. But in the end they'd want a captured TV sports property of some sort
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Re: NFL franchise valuations

Post by 4th&long »

laxtreme56 wrote: Tue Aug 02, 2022 10:50 pm
Tank55 wrote: Tue Aug 02, 2022 10:01 pm
4th&long wrote: Tue Aug 02, 2022 8:42 pmWe do know that Collin Cowherd said both NBC and Fox turned a profit.
As you well know, he said that they "made money." He did not use the word "profit."
Plus Cowherd is just shilling for his employer. Does anyone think he really knows the leagues finances or can even decipher a P&L sheet. Ron Jaworski said the Arena League would have 20 teams, a national TV deal and 3 teams in Mexico. We see just how true that turned out to be
Yes he was given a line to read off by mgt, he's no different than any other spokes person. So he knew what Fox had him read. Jaws was just pumping like a CNBC guest pumping a stock.
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Re: NFL franchise valuations

Post by Tank55 »

4th&long wrote: Wed Aug 03, 2022 8:19 am I think Fox said they would operate the league while others the teams.
As a contractor or an owner? If I buy a franchise, am I not buying 1/8th of the league? If I bought all eight, would I not own 100% of the league?

If FOX is creating an entity where they get to sell the teams AND they still own the league/television property.... I mean, that would be incredible. That's eating your cake and having it too. I just don't see why anyone would want to buy a team?
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Re: NFL franchise valuations

Post by 4th&long »

Tank55 wrote: Wed Aug 03, 2022 8:34 am
4th&long wrote: Wed Aug 03, 2022 8:19 am I think Fox said they would operate the league while others the teams.
As a contractor or an owner? If I buy a franchise, am I not buying 1/8th of the league? If I bought all eight, would I not own 100% of the league?

If FOX is creating an entity where they get to sell the teams AND they still own the league/television property.... I mean, that would be incredible. That's eating your cake and having it too. I just don't see why anyone would want to buy a team?
Well now they are selling an interest in the league, so maybe that's why. BTW that's why I think the WLAF never took off, the teams was controlled min 51% by NFL. Schram called it the NFL of the spring... That didn't sit well.

USFL/Fox isn't quite as bad a situation but all these leagues will need to give up control at some point or find some middle ground to sell. They will be the one will minority interest and some pull down the road if all goes well.
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