If the NFL was a stock, how would it perform?

The NFL is currently the most profitable sports league in the world. The Chicago Trubine reported that the NFL generated $15 billion in revenue in 2019 and is aiming to increase revenue to $25 billion by 2027. Some joke that the NFL owns a day of the week, and it’s not a far-fetched thought. Last season the NFL received around $5 billion alone from its TV partners CBS, Fox, NBC, ESPN and DirecTV. The TV rights are up for renewal in 2022 and many expect that $5 billion could turn into $10 billion.

As someone who enjoys keeping up with financial markets, I started thinking about what if the NFL was a publicly traded company. How has the growth of the NFL compared to other companies? How has the value of the NFL increased over the past 10 years relative to increase in the market?

Every year Forbes releases an estimation for what each NFL franchise is worth. It can be hard to pinpoint exactly since it’s not like NFL teams are being bought and sold every year, but the Forbes data has a good reputation. I added up each team’s valuation and then looked at how that grew over time. In 2011, total valuation for all 32 teams was $33.1 billion, or $1.03 billion per team. In 2020 the valuation increased to $97.43 billion, or $3.04 billion per team. In the past 10 years, the value of NFL franchises has nearly tripled. In 2020 the most valuable franchise is the Dallas Cowboys estimated at $5.7 billion, and the least valuable is the Bengals estimated at $2 billion. This graph shows how the cumulative value of NFL franchises has grown over time.

I then looked at the the average closing price each year for the Nasdaq, Dow Jones Industrial Average and the S&P 500. Those three are known as market indexes, for example the S&P is a weighted index of the 500 largest U.S. publicly traded companies. I calculated for each year the percent increase relative to the year 2011. This way, I could compare the performance of these indexes relative to the NFL. I used the cumulative value of each NFL franchise as my estimation for what the NFL is worth. This graph shows how the value has changed over the past 10 years for the NFL relative to these indexes.

I was a bit surprised by the results. I actually thought the NFL franchises tripling in value would slaughter the market returns, but that wasn’t the case. The value of NFL franchises is 194.3% more today than it was in 2011. The Nasdaq index is worth 257.7% more today than it was in 2011. The NFL did outperform the Dow and S&P, but in 2017 we saw the Nasdaq overtake the NFL. The Nasdaq is known for having many tech companies, including Amazon, Apple and Tesla. While most of us don’t have the $2 billion + to invest in an NFL team, if you invested in Nasdaq stocks in 2011 you would hypothetically be seeing a better percent return!

Next I wanted to look how the value of NFL franchises has grown relative to its biggest sponsors. For the NFL I used the Forbes valuations, and then for the other companies I used Yahoo Finance to find their Enterprise Value (EV) over time. EV is an estimate of the total value of a firm. Since most of their sponsors are larger than the NFL value wise, again here I looked at percent change relative to 2011.

The NFL outperformed Verizon, Pepsi and Anheauser-Busch (AB) over that period of time, whereas Nike skyrocketed in 2011 and is now worth 339.7% more than it was in 2011. In 2017 AB was worth 133% more than it was in 2011, but that number slid to 37% in 2020. Perhaps it’s increased competition in the space and new entrants, as many people have switched from their Bud Lights to craft beers and seltzers. Nike has gone from a 237% increase in 2019 to 339.7% today, an incredible jump for one year. Nike has seen an 82% digital sales growth and is as strong as ever despite the pandemic. And in case you wanted to see how the value of NFL teams has changed relative to the value of Amazon…

If you could “buy stock” in the NFL would you? Is anyone concerned about the league long term from a player safety perspective? If you could invest in individual teams, which would you buy or which would you stay away from? How about other teams or leagues?