This is a multi-part series that explores the financial health of
the Jacksonville Jaguars. In order to put the Jags financial data into perspective it is necessary to understand stadium capacity
and attendance data also. Those statistics are best understood when put in the context of regional population. Population
data is from the 2000 US Census. All other data is from the 2004 season.
This article will focus on team value. How rich are the richest teams? How much is enough? Where
do the Jaguars stand? Who is not doing their part?
Financial Data
Forbes Magazine does a yearly article that analyzes the financial data of all the major sports teams.
The data used here comes from Forbes Magazine and is for the 2004 season.
Wayne Weaver and his partners bought the Jacksonville Jaguar franchise in 1993. He paid $208M for
the franchise. Earlier in the year Charlotte was awarded a franchise for $206M. Now franchise values go up over time provided
that you are in a profitable business. The NFL is a profitable business. How fair was the purchase price? Well in 1998 the
Cleveland Browns were awarded a franchise for the paltry sum of $530M. In 1999 Houston got a bargain at $700M. Wow, seems
like Wayne got a deal!
Not so fast my friend! Jacksonville and Carolina took a lesser share of the NFL revenue sharing than
did Cleveland and Houston. So that has to be factored into the purchase price. Let's look at some existing franchises that
changed hands around the time the Jaguars were born.
In 1994 the New England Patriots were sold to Robert Kraft for $158M. The Patriots are in the sixth
largest metropolitan statistical area (MSA). Did I tell you the Jaguars are in the 46th largest MSA? That same year
the Philadelphia Eagles were sold to Jeffrey Lurie for $185M. The Eagles are in the 5th largest MSA. In 1995 Malcolm Glazer
bought the Tampa Bay Buccaneers for $192M. In 1993 Wayne Huizenga bought the Miami Dolphins for $138M. In 1997 Paul Allen
bought the Seattle Seahawks for $194M. So there are five existing franchises purchased during the same time frame as the Jaguars
in larger markets and all for cheaper prices.
To be fair, I should also mention that the McCaskey family bought the Chicago Bears in 1920 for one
hundred dollars. And in 1933 Art Rooney bought the Pittsburgh Steelers after a fine afternoon at the racetrack for $2,500.
Apparently you can buy a team from gambling profits, you just can't buy
a ticket to the hall of fame. Take that Pete Rose!
Current Team Values
Forbes does a team valuation each year to estimate a team's value. This valuation is based on present
and future income potentials for each team as well as market size, merchandising potential and stadium lease values.
The Jaguar current value in 2004 was $691M, more than three times the purchase price in 12 years.
I think we would all like a stock portfolio that performed like that. You might be shocked to find out that only five franchises
have lower values. Atlanta, San Diego, Oakland, Arizona, and Minnesota have franchise values between $658M and $690M.
Conversely, the Washington Redskins, Dallas Cowboys and New England Patriots have team franchise values
in excess of $1B each. Or as Austin Powers would say one billllllllllllion dollars. That's a lot of L's. The average franchise
value in 2004 was $819M and the median was $820M. So why is the Jaguars value so low?
Break It Down
Forbes looks at four valuations when determining a franchise value. They are;
- Sport Value
- Market Value
- Stadium Value
- Brand Management Value
Sport Value is the portion of the franchise's value that is attributable to revenue
shared among all teams. Remember the Jaguars got a smaller share of revenue sharing when they came into the league. This is
the largest portion of the four values that determine franchise total value. The Jaguar's sport value is $471M. Only the Saints
and the Raiders have less sport value at $469M. Can anyone think of a reason why the NFL owners would screw Al Davis and Tom
Benson. I can. The average sport value is $501M and the median is $505.
Market Value is the portion of a franchise's value attributable to its city and market
size. Amazingly the Jaguars are only 25th in Market Value even though they are the 46th largest MSA and the smallest NFL market.
Atlanta, Indianapolis, San Diego, New Orleans, Minnesota, Oakland and Arizona have lower market values. The Jaguars market
value is $105M. The average is $142M and the median is $139M. The Redskins market value is $339M.
Stadium Value is the portion of the franchise's value attributable to its stadium and
lease. The Jaguars stadium value is 24th at $77M. The NFL average is $117M and the median is $115M. The Washington Redskins
stadium value is $308M.
Brand Management Value is the portion of a franchise's value attributable to the management
of its brand. Merchandising sales are a large part of this value. It would be a detriment to this value to be in a small
market. The Jaguars brand value is $39M which is 29th in the NFL. The average is $58M, the median is $54M. The Dallas Cowboy's
have a brand value of $119M.
Value Summary
The Jaguars have a total franchise value of $691M which is $128M below the
NFL average. The sport value is $30M below the NFL average while the market value is $37M below. The stadium value is $32M less and the brand value is $19M less than the NFL average. On a percentage basis
the sport value is 94% of the NFL average while the market value is 74%, the stadium value 66% and the brand value is 67%.
Conclusion
The fact that the Jaguars are in the smallest market in the NFL has a direct correlation to its franchise
value. A fact that both the NFL and Wayne Weaver knew when a franchise was given to Jacksonville. And while contrary to popular
noise, the people of this city have supported this team above any reasonable expectations. The franchise value remains low
due to market size and stadium lease. So maybe Wayne Weaver was right when he took the mayor to the mat a
few months ago over electronic signage and other lease terms.
This city was behind the Jaguars with a 'whatever it takes' attitude to get a franchise here. And this
city has benefited beyond all expectations since the Jaguars have arrived. So it was time for the city to step up and do its
part to keep this franchise competitive. By providing a lease that is competitive with the NFL average. Wayne Weaver
has kept his promise to Jacksonville and the fans have well supported the team. The city needs to do its part.
