clock menu more-arrow no yes

Filed under:

49ers have biggest one-year increase in Forbes 2015 valuations

New, comments

Every year, the folks at Forbes put together valuations on professional sports franchises, ranking them based on a variety of factors. On Monday, they released their latest NFL rankings, and it is not surprising to see the San Francisco 49ers shoot up the list. Forbes values the 49ers at $2.7 billion, and ranks them No. 5 among NFL franchises. A year ago, they were ranked No. 9 with a valuation of $1.6 billion.

I do suggest taking these numbers with a certain grain of salt. I think they provide context, but we can't know with complete certainty what goes into numbers for a given team. The writer of the article provided some details on the things they try and look at to detail the figures:

Team values are enterprise values (equity plus net debt) ...

Revenue and operating income are for the 2014 season, net of revenue sharing and stadium debt service. Our goal is to measure cash in versus cash out. The NFL suggested to owners that they accrue for the cost of the concussion lawsuit by deducting the entire $27 million cost per team from profits in 2014. But we omitted that expense from our operating income figures because the case is being appealed and the actual cash outlay for that settlement will be over several years. Revenue from non-NFL events is included where applicable. We gathered our information from the teams, public documents (for stadium leases and public debt), sports bankers, credit rating agencies like Moody's and Fitch, network executives, and media experts like SNL Kagan.

I do wonder about that operating income figure because of the 49ers stadium outlay. The debt is in the name of the Santa Clara Stadium Authority, which is a public agency. However, as I understand it, the 49ers are the ones contributing the bulk of the funds to pay for that loan debt. Things like this are why this kind of stuff is not fully clear. Forbes can't reveal too many specifics about how they figure this out, as I have to think a chunk of it comes from people who might be fired for revealing this information.

The 49ers climbed 69 percent (nice) over the past year, and that is due entirely to the move into Levi's Stadium. They climbed 30 percent a year ago, so it would seem they got a bump based on it happening, and got another based on the Scrooge McDuck vault of money the York family likely swims in now.

While there have been issues with the field, fan heat exhaustion, and the sometimes subdued atmosphere at games, it is a cash cow. A year ago, Forbes reported the 49ers had operating income of $25 million. This year, they are reporting the 49ers have an operating income of $124 million. Operating income can be described in a variety of manners, but as I understand it, it can often be comparable to earnings before interest and taxes. Operating profit is another way some describe it.

That being said, there is zero doubt that Levi's Stadium tremendously boosted the 49ers franchise value, and the bottom line for the Yorks. Even if the figure is overvalued, the Yorks are doing plenty fine. And that's why people wanting the Yorks to sell the franchise are not going to get their wish. Sure, they could get a ton of money from a sale, but that operating income figure is going to provide a lot of cash in their pocket. AND they get to retain one of the more valuable pieces of property in sports. That's a pretty sweet deal for them at this point.