Paying Closer Attention To My Financial Statements

Paying Closer Attention To My Financial Statements

3 Variables When It Comes To Sports Team Valuations

Barb Morgan

Most sports teams are privately held. That means that they are owned by a specific individual or company. When that entity decides to sell that team, it's important to make sure that the team has a proper valuation. That can be difficult to do. There are several things that go into that valuation, and it's not an exact science. Some of the variables can be somewhat fuzzy. So, what does go into valuing any sports team?

Ego

All large purchases have some kind of ego factor, whether it's a Rolex, Bugatti, or a sports team. In the case of a sports franchise, the ego comes not only with the team's name, but also with the team's history, and any big name players on it. For example, the New England Patriots with Tom Brady is going to have a bigger ego value than a minor league football team with no name recognition. Likewise, a team that has been on a winning streak with several championships behind them is going to have a higher ego factor because they are more well known. 

The Gate

A more objective factor when it comes to the proper valuation of any sports team is their gate numbers. The gate numbers break down into two parts. One part is how many people are physically coming to the games. The other is how much money the team is earning when it comes to tickets being bought. Both numbers have to be considered together to get the right idea of what the take at the gate is. For example, selling a lot of tickets doesn't mean anything if there aren't butts in seats. Selling 75 season passes can bring in a lot of money, but if only 15 of those people are ever showing up, then that affects the actual gate information. 

Operating Costs

Another part of valuing any sports team is how much the team's operating costs are. Operating costs include players' salaries, coaching staff salaries, and so forth. It also includes hidden costs like marketing, charitable giving, and travel costs. 

When a sports team is being offered for sale, it's important to have the full, true market value of the team. Figuring out that value can be tricky since there are so many things that go into it. The buyer can come up with one valuation while the seller has another, even using the same numbers because of all the variables. For more information, contact a business such as Sports Value Consulting, LLC.


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Paying Closer Attention To My Financial Statements

When my card was declined at the grocery store a few months ago, I realized my financial situation had hit rock bottom. Instead of ignoring the problem, I decided to meet with a financial counselor to see what I could do to make things better. I talked with him about how to handle unplanned expenses and how to budget for my day-to-day life. It was incredible to learn more about money, and now I can proudly say I am living within my means. I decided to make this blog for anyone that struggles with financial planning so that you can turn things around.

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