I was listening to Freddie Coleman on the way home tonight and he was talking about how Forbes believes the Rams doubled the value of their franchise by moving from St. Louis to Los Angeles. They beleive the franchise value went from # 28 to #3 in the NFL. Coleman expressed some awe based on a mistaken take that just moving to LA did that. You have to remember that Stan Kroenke is building a hugely expensive temple to the NFL and that certainly doesn't hurt the valuation of the Rams.
Still... most of that value gain is from moving from St. Louis about the 21st ranked designated market area with about 1% of the nation's TV households to LA, the #2 DMA with about 5% of the nation's TV households....Even though LA fans will prove to be as fair weather as they get.
As I was pondering the move, I thought of the recent $1.2 Billion lottery win and I thought "that's almost enough money to buy controlling interest in a lower tier NFL or NBA team".
Today I am going to talk about which teams I would think about buying if I had that kind of lottery fortune (that is if I couldn't find a handful of other rich ne'er do-wells to partner with in competing with either league...)
The obvious pick is the NFL's least valuable team, the Buffalo Bills. Most people would argue that moving them to Toronto would make a lot of sense. Bills fans could still go to the Games and Toronto is a big market with over 6 Million people. It is about the size of the DFW Metroplex and frankly it is grossly mishandled by the CFL.
Even though Canadians are not anywhere near as crazy about football as fans in Buffalo, it is probably a solid landing point and would see the team's value go from 1.4 Billion to (guessing) about $2.2 Billion.
Another sensible landing would be in one of NYC's boroughs if a stadium was built. NY Metro with a population of 20 M is big enough to handle a third team. Stick a stadium somewhere on the border of Brooklyn and Queens, call them "The Big Apple Bombers" or somesuch and you are probably looking at a team worth about $3.2 Billion.
I would much, much rather buy a large minority share of the Oakland Raiders though. That is a franchise that is hugely undervalued. The Raiders are valued at $1.43 Billion and probably have the worst stadium in the NFL.
On the flip side they have two fiercely loyal fanbases ---one in Oakland and one in LA --- and one of the best legacies in the NFL. Plus they have one of the NFL's best young QBs.
The owner is cash poor in NFL terms, but absolutely wants to keep his Dad's team. I have a ton of respect for that.
Presumably the 53% owned by the silent partners is valued at about $750M today, but they are probably anticipating it will be worth double that should they move to LA. They'd be right. But what if the Chargers move to LA? There is no way the NFL will allow a third team into LA county if the Rams and Chargers are already there.
Davis has controlling interests and doesn't have the money to build his own stadium, so his only options are to look at areas with better stadiums than Oakland. San Antonio is a possibility, as is St. Louis, but are any of those truly good options?
Look at how dumb the move from Houston to Tennessee has been for the Titan's ownership. The Titans are worth $1.49 Billion; The Texans $2.5 Billion. Talk about letting your money get mad.
A move to either of those cities is going to keep the team value around $1.5 B. Given that, would they take an offer of $1B today for their 53%? Maybe.
I would give the Davises 4% ---giving them a true majority ---in exchange for a some added influence.
I would want to try to leverage my way in as a new voice in the Raiders/Oakland negotiations in order to get things done. I think Davis is just too worn out with the city's antics to get something done.
While his request for a 55,000 seat stadium is modest and practical, I would insist the 55,000 seat stadium overbuilds restrooms and leaves room for additional concession stands and is easily expandable. I would also insist that that the city agree to fund future expansions in 5000 lots up to 75,000, the size of stadium that the Raiders really should have.
(You have to understand, San Francisco has a ton of NFL fans who maybe aren't willing to drive to Santa Clara, but might be willing to go to a new stadium in Oakland. Oakland has a real shot to start pulling fans from San Francisco if they can get the stadium right.)
Now you may ask how I would make that work when they won't even meet current demands...
I would try to come to a meeting of minds with the Athletics' ownership and Davis in order to really turn up the heat on Oakland.
What if both teams made a joint public statement to Oakland saying that they agree in principle to the two relatively cheap stadiums concept on the same land --- if lots of parking garages were added to the plan (in addition to the guarantee of 8000 parking spots) and major access improvements were budgeted?
Then give them a date like July 1st to approve it or both teams walk and go talk to Ed Roski and the Inland Empire "Los Angeles Stadium" guys.
Oakland is playing games and the idea that both teams would be gone would put every city leader's job on the line and generate a more sensible and fair response. The reality is new facilities for both teams are overdue by about 20 years. Davis isn't asking for any gold plating in his stadium and the athletics would likely be OK with something similar to the SF Giants' AT&T Park (cheap at about $500 Million in today's dollars).
Oakland is being offered two stadiums on a budget for the next 30 years. They are just being cheap ---and I would argue somewhat irresponsible given the view of the city outside of their sports teams.
If they build it, I think the Raider's franchise will in short order be worth about what the 49ers are worth...about $2.7M making my share worth about $1.35M, a nice gain, and I'd have a voice in the Raiders. How cool would that be?
Inland Empire Raiders (a.k.a. LA Raiders)
If they don't, I think the NFL would allow the Raiders to look at either LA county option as long as the Chargers aren't there before them.
It seems the mayor of LA is no longer pushing the Carson site. The NFL frankly might do better to allow the Raiders to play Kroenke and Roski off each other to get the best deal possible. LA will prove a soft attendance market. Having two teams there will not prove to be smart.
The Raiders in IE give the team a chance to pull a brand new NFL-sized fanbase in the Inland Empire while also being close enough to help viewership in LA proper with their fans there...To me, it is a proper NFL effort in LA.
I think the Inland Empire site might be better for the Raiders in LA anyway as the idea of Roski also pulling in a MLB team into his complex and the leverage of Kroenke option could bring him down to accepting 20% of the team ownership as his cost rather than his stated 30%.
I think the team valuation would be in line with the Rams at about $3B.
Let's say Davis and I agree to effectively surrender 10% each to Roski, with the understanding that Davis will buy 10% from me at LA value with a loan based on his new team share value of $1.5 B, which he'd be able to pay off over 10-20 years very easily in that stadium... Then my share of the team would only be 29%. I'd have invested $1 B, given 10% to Roski for the stadium and sold 10% of it to Davis for $300M, giving me roughly a $900 M share of the Raiders at a cost of $700 M.
New York Titans
There is nothing inherently wrong with Tennessee, but this $1.49B team is another team that would make a ton of sense on the Kings/Queens border. It would likely more than double their worth.
Years of losing has the Philadelphia 76ers' value grossly suppressed today at $700M. Should my lottery winnings allow it, I would totally "overpay" offering $1.4 B today to buy them. They have a ton of young talent. If you flipped a couple for similar young players that compliment each other this talent could easily win 45 games immediately in the east, but the reality is they will yet again add a top 3 pick this year.
It is high time to buy.
If the 76ers became a playoff level team, the value of the franchise would likely instantly hit the $1.9-2.0 B range populated by Golden State and Brooklyn. I see them as a slightly lesser Boston.
The Sixers have a great history of contending, a top 5 media market with 2.5% of the nation's TV households, and a nationally appealing brand.
By next year, this could be the largest collection of top young talents in the NBA. That is a great long term position.
Additionally, NBA Teams are growing more valuable, so I would feel very comfortable in my acquisition.
I struggled with which NBA team to try to acquire to fix the injustice of the Seattle situation...New Orleans? Oklahoma City? Memphis? Milwaukee? Ultimately I decided to go with the cheapest.
The New Orleans Pelicans ($650 M) have a cool brand, but really that is about it. How anyone in their right mind can move a team from Charlotte to New Orleans is beyond me. Oh, wait. I did say "in their right mind".
New Orleans is a good city with very good general sports fans, but the reality is Seattle is a top 12 market with hard core basketball-specific fans. To me, it's a no-brainer where to play.
I would petition the NBA to allow me to use the Supersonics name and maybe even pay a small fee to OKC for the right to claim the Sonics' history as my teams.
New Orleans has one of the best young players in the league in Anthony Davis and a pretty good group of young to mid-career talents. Dell Demps, to me, seems like quite a good GM. I am less sold on their coach.
I would be inclined to work a deal with Sacramento for George Karl. Karl alternates between being OK and on the rocks in Sacramento. I would offer to take him off their hands. I would essentially give Karl the same deal + 1 year in exchange for him letting the Kings off the hook financially for any future pay.
I think they would be good with that.
Karl does quite well with deep, talented, young rosters and is well liked in Seattle, making it a strong move on and off the court.
Seattle would likely be more than willing to upgrade Key Arena to regain an NBA team.
The new Seattle Supersonics would be in a market with 1.6% of the nation's TVs and would likely be worth about $1.2 B on arrival.
While Minneapolis is a nice market, the reality is that Kevin Garnet is the only star who ever wanted to have a career there. It is a tough market in which to retain players. That makes it a little dodgy as an NBA market.
Minnesota has a very nice young team currently with a pretty promising GM in Milt Newton. It is questionable whether he knows how to build a team, but he does seem to have an eye for talent.
Vancouver is 30% bigger, but it is in Canada where fans just aren't as rabid. Consider it something of a wash in-market, but the reality is having two teams in Canada is much better than just having one. All of western Canada would be eager to buy Vancouver Timberwolves gear if they became pretty good at a time when the Raptors happened to be pretty good.
Still I'd put the value at about $875 M up from $725 M. But I think there would be much better long term potential.
If you look around the league, Canada produces enough good basketball talent that Vancouver and Toronto could start picking off the best Canadian players and building up Canadian basketball per the original dream of the NBA's Canadian basketball expansion effort.
Which teams would you buy?