King Kaufman's Sports Daily

Forbes explains how keeping a team out of L.A. was one of the most inspired of Paul Tagliabue's policies.

Published September 5, 2006 4:00PM (EDT)

The current issue of Forbes has the magazine's annual team valuation report, which should be called the Read This and Then Read It Again Whenever One of Your Local Teams Starts Demanding Public Money to Build Its New Arena or Stadium Report.

Catchy, don't you think? Forbes does it for all of the major North American sports.

The 2006 report, written by Kurt Badenhausen, Michael K. Ozanian and Maya Roney, says the average NFL team is worth $898 million, an increase of 212 percent over 1998, when Forbes began calculating team values for the league.

"Look at it this way," the authors write. "Football team values have increased 11 times more than the S&P 500 since 1998. Profitability? In 2005, the average NFL team posted $30.8 million in operating income (earnings before interest, taxes, depreciation and amortization), vs. $5.3 million in 1997."

Citing wealth creation as the chief accomplishment of just-retired commissioner Paul Tagliabue's 17-year tenure, the authors note that while booming TV contract values have filled the league's coffers, "the gravy has come from the 17 new stadiums that were built during Tagliabue's tenure."

And that doesn't count new stadiums for the Arizona Cardinals, the Indianapolis Colts and the New York Jets and Giants -- three stadiums total -- opening this year or in the next few. Or massively remodeled stadiums in Chicago and Green Bay.

One of the best things Tagliabue has done, Forbes says, is reduce the gap between the richest and poorest teams: "He has accomplished this by cleverly leaving the Los Angeles market devoid of a franchise since 1995, which has given small and mid-market teams with shoddy ownership, such as the Cincinnati Bengals and Arizona Cardinals, the leverage they needed to coax taxpayers into building them new stadiums."

Within 10 years or so, I bet every team in the NFL except the Packers and Bears will be playing in a stadium built since Tagliabue took the commissioner's post in 1989. By that time, the teams who got new parks in Tagliabue's first decade -- Atlanta, Baltimore, Carolina, Jacksonville, that crowd -- will be way past due for even newer ones if they don't have them already.

Think the NFL will put a team in Los Angeles someday? Or will it keep the nation's second-largest market as a monster under the bed? That's what it's been for cities with teams whose turn it is to get a new playhouse, because hey, the team might move to L.A.

I know what I'd do if I were in charge. Only teams I'd let move to Los Angeles would be teams from other huge markets, so I'd always have one in reserve. The Bears, the Eagles. That's not happening.

One thing I found interesting about Forbes' report was a little pie chart the magazine ran with each team's profile on the Web site. It displays how much of the team's value is attributable to each of four factors: revenue shared among all teams, the size of the team's market, its stadium deal and its successful management of the brand.

At the top -- Washington, New England, Dallas, Houston, Philadelphia -- the charts all look about the same. Roughly half of the value is attributable to revenue sharing, about 20 percent each to market size and stadium, and around 10 percent to brand management.

In the middle -- let's say the two New Yorks, plus Seattle, Pittsburgh and Tennessee -- the revenue-sharing portion is above 60 percent and the brand management more like 7 or 8 percent, with shrinkage of a few percentage points in the other two areas. The Giants and Jets get more from their market size and less from their stadium than the others, but it still comes out to a percentage in the 30s.

At the bottom -- Minnesota, Atlanta, San Diego and the two Bay Area teams -- revenue sharing accounts for about 70 percent, brand management 6 or 7, and stadium and market size combining for about 24.

There's nothing anybody can do about the size of their market except move to Los Angeles. One of those teams at the bottom already tried that gambit. And the difference between even the best brand managers (the Cowboys at 12 percent) and the worst (several teams around 6 percent) isn't that great.

Revenue sharing is going to be what it is, based on the league's collective-bargaining agreement with the players and the size of the TV deals, neither of which can any one team do too much about.

So what any given team can control that makes much difference is its stadium deal. At the top of the list, $325 million of Washington's $1.42 billion value, 25 percent, is attributable to its stadium. At the bottom, only $50 million of Minnesota's $720 million value, 7 percent, is attributable to its, uh, whatever you want to call the Metrodome.

And a better stadium deal probably helps with the brand-management slice of the chart too, just as a little bonus.

That's why it won't be long until your local 11 has its hand out looking for a new stadium financed by you, the taxpayers, if it doesn't already. Because the one place your boys can really get rich is on a sweet stadium deal, so it kind of kills the point for them to pay for it themselves.

And that's why you should check out Forbes' report, for every sport, every year. Before you get sucked in by those threats of a move to Los Angeles.

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The calendar section [PERMALINK]

Event, event, hoozgotta event? I do. Bunch of 'em.

This column's monthly Table Talk chat is Wednesday at 12:30 p.m. EDT till whenever. Join me and other chatters in the thread, where you have to be a Salon Premium member to post, but any old body can read.

On Thursday I'll make one of my semiregular appearances on "The Bob Edwards Show" on XM Radio, talking sports with a radio legend. What, don't you do that? Well, you can listen to me do it at 8 a.m. EDT on XM Channel 133, with repeats each of the next two hours and at 8 p.m., and repeating online every hour for the rest of the day.

Sunday is the first-ever King Kaufman Sports Daily real-world event. In the early Internet days I heard about programmers referring to the real world as "meatspace," though I never actually heard anyone use that word.

We'll meet in meatspace, and also cheese and veggie space. If you're in the St. Louis area, stop by the Black Thorn Pub at 3735 Wyoming St. and watch the Denver Broncos-St. Louis Rams game with me. We'll have some pizza and drinks on Salon. The event is open to all. Game starts at noon CDT.

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