By: Matthew Chaves
The amount of money in sports is greater than ever before, with the four biggest leagues in the U.S., the NFL, MLB, NBA, and NHL respectively, leading the way, according to a report in GlobalSport Matters, which says 106 sports franchises worldwide are worth more than $1 billion each.
Sponsorships, television deals, and fan revenue are some of the major revenue streams in the stock market of sports. Individual teams can earn billions of dollars no matter the sports league.
The NBA is perhaps the best example, with every team recently topping a net worth of more than $1 billion. The lowest of the bunch is the Memphis Grizzlies at $1.2 billion. However, the top of the NBA may be a bit of surprise if you’re to compare it to their performance.
New York is one of the biggest markets for sports in the U.S. And, a report by Forbes that examines the net worth of NBA teams shows why this area of sports in the U.S. is no exception. As reported, the Knicks have a market worth around $1.8 billion, according to the Forbes report. That’s up 11% from a year ago.
The Knicks lead the league in team value at a whopping $4 billion – despite their dismal performance on the court. The team posted one of the league’s worst records last season and is on track to do the same this season, but it makes sense in the grand scheme of things, say analysts.
“The Knicks have been an unmitigated disaster over the past 18 years, posting only two winning seasons and cycling through 12 coaches,” the report said. “But through it all, owner James Dolan continues to spin straw into gold with the NBA’s most valuable team for the fourth-straight year.”
While not the biggest market in the league, that title being held by the Los Angeles Lakers, the Knicks’ market value still trumps the values of 21 teams in the league. Despite being the richest in the league, the Knicks are currently last in the eastern conference.
The reason for this may lie in how that money is spent. According to the team’s data, very little of that $4 billion net worth is spent building a winning team. $611 million is invested in bringing in players, according to Forbes.
Fans know the Knicks’ spending habits well and don’t approve. Harlem resident and lifetime Knick fan Alexander Sandimanie believes the team doesn’t pay that much attention to how the team builds their talent.
“The Knicks have one of the most loyal fan bases in sports history,” Sandimanie said via email. “The team’s free agency attempts have failed them many times. Not to mention the embarrassment Knicks fans experienced over the summer when they missed out on Kevin Durant, Kyrie Irving, and Zion Williamson.”
The loyalty from the fans is reflected well in ESPN’s 2019 attendance report. The Knicks had an average of 19,002 fans per home game and 17,566 per away game, placing them ninth out of 30 in the report.
Not all fans think the loyalty is deserved though. New Jersey resident and lifetime Knicks fan Mohamed Mahmoud believes the Knicks should show more care and have an open ear when listening to the fans.
“I don’t think the Knicks deserve the backing they get,” Mahmoud said via email. “They know they can change whatever they want, and they’ll still sell tickets.”
Fans aren’t interested in the club as a whole anymore, according to Mahmoud. They care more so about how good a player is. If a player performs, fans will follow.
“It’s going to hurt the Knicks in the long run if they don’t figure something out soon,” Mahmoud said.
A perfect example of spending more than enough but not in a smart manner is the Chicago Bulls. They spend $1.15 billion on the sport, second only to the Boston Celtics at $1.51 billion. Despite this major spending, they’re 11th in the eastern conference, compared to the Celtics at third.
The Milwaukee Bucks offer the best example of spending wisely this season. The team has $889 million invested in the sport. Despite being roughly $250 million behind the Celtics, they lead the eastern conference with a record of 22 wins and three losses, compared to the Celtics 17 wins and six losses.
We could apply the same principle to each professional sports league in the U.S. In the NFL, the highest value team in the league is the Dallas Cowboys, at a total value of $5.5 billion. The last time they won the Super Bowl was in 1996. Meanwhile, the New England Patriots, with a total value of $4.1 billion, have won the Super Bowl three times in the last five years.
In the MLB, the league leader in team value are the New York Yankees, at $4.6 billion. The most recent World Series champion is the Washington Nationals, who are 11th on the list of 30, with a total value of $1.75 billion, a fraction of the Yankees.
The way a team spends their fortune seems to correlate quite well with how they perform. If they spend it smart and know where to invest in, results will follow.
Data Journalism 395 