A preview of the Green Bay Packers most recent publication of results could explain why Walmart (WMT) heir Rob Walton and his ownership group spent $4.65 billion on the Denver Broncos in June.
The Packers earned $347.3 million last season before selling an Aaron Rodgers ticket or jersey through domestic revenue sharing, which includes domestic media rights and sponsorships. This number is distributed evenly among the 32 NFL teams after each season.
Green Bay was 70% of the way to profitability before selling a beer at Lambeau Field, home of the Packers. For billionaires looking for new areas of investment, a live events business that was near cash flow positive before the start of live events has proven to be an attractive asset class.
“If you’re interested in owning something long-term, I think there’s a lot of money out there and clearly a lot of wealthy people who are willing to do that,” Monumental Sports and Entertainment president Zach Leonsis said. at Yahoo Finance Live. last month. “The sport has proven to generate incredible returns.”
Perhaps the most striking part of the NFL’s shared revenue is what it didn’t include. The Packers added $231.7 million in local revenue to reach a franchise record of $579 million in annual revenue. The team profited $77.7 million from the trades. The increase in revenue helped offset $501.3 million in additional expenses due to late payments during COVID-19.
The league’s most recent revenue-sharing pop — which hit a record $11.1 billion — also didn’t include major media rights deals coming up.
After this season, Amazon’s (AMZN) annual spending of $1 billion to broadcast Thursday Night Football will be added to shared revenue. In two years, the NFL’s Sunday Ticket package is expected to bring $2.5 billion to a major tech company like Amazon, Apple (AAPL) or Google (GOOGL). Even the latest NFL project, NFL+ streaming, which charges $40 per year, will also be added to this shared revenue figure.
With these numbers in the mix and growing advertising revenuethe NFL’s shared revenue contribution to each team could approach $500 million.
“It’s a completely different risk profile than commercial real estate, stocks, anything,” Michael Rapkoch, founder and CEO of Sports Value Consulting, told Yahoo Finance at the time of writing. the $4.65 billion sale of the Broncos. “The stock market can go down. The value of the Denver Broncos is not going to go down. »
Rapkoch, who oversees team valuations, described the NFL as a “good buy” at the time of the Broncos’ sale, and said the league’s recent earnings results showed why.
“All I know is that every year the NFL and all the leagues have done a lot to take their league to the next level, and the proof is positive,” he said. “Leagues don’t back down.”
Josh is a producer for Yahoo Finance.
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