Inflation or not, price of pro sports teams keeps going up

Nov 24, 2022, 3:30 AM | Updated: 3:38 am
FILE - Denver Broncos owner Rob Walton waits for the team's NFL football game against the Las Vegas...

FILE - Denver Broncos owner Rob Walton waits for the team's NFL football game against the Las Vegas Raiders in Denver on Nov. 20, 2022. Inflation is not going to hurt the bankrolls of sports team owners. In fact, it may help. While the uber-rich will have to pay a little more for their eggs at the grocery store – just like everyone else – inflation is not likely to affect the bottom lines at their sports properties, whether it is yearly revenues or when it comes time to sell. (AP Photo/Jack Dempsey, File)

(AP Photo/Jack Dempsey, File)

Inflation isn’t going to hurt the bankrolls of sports team owners.

In fact, it may help.

While the uber-rich will have to pay a little more for their eggs at the grocery store – just like everyone else – inflation isn’t likely to affect the bottom lines at their sports properties.

“I’m resting pretty easy if I’m an owner,” said Tim Clarke, a senior analyst at PitchBook, which researches private financial markets. “That’s how people are viewing assets of the professional sports industry. They’re just not going down.”

Inflation surged this year to levels unseen for four decades, slowing the economy and raising prices for consumers from the checkout line to the gas pump. For the most part, sports are no exception: Rising costs are making it more expensive for fans to go to games, for families who participate in youth sports and for college athletic departments trying to stay on budget.

But the millionaires and billionaires who own sports team won’t be feeling the pinch, whether it’s the day-to-day cost of running the business or the sale price when they decide to move on. On the contrary: A franchise can be a safe place to park money and ride out a bear market.

“I do think there is somewhat of a hedge,” said Inner Circle Sports CEO Rob Tillis, who has worked on the sale of dozens of teams in all four major U.S. pro sports and the top international leagues. “I have been doing this for 30 years. We’ve been through lots of business cycles and valuations have been strong. I don’t see that as any different now.”

Most sports owners are also well-capitalized enough to keep their team budgets separate from their outside business and other sources of wealth. So even though rising interest rates have cooled the housing market, that’s unlikely to affect Cleveland Cavaliers and Rocket Mortgage owner Dan Gilbert, who with an estimated net worth of almost $52 billion is the 23rd-richest man in the world, according to Forbes magazine.

(One exception: Losses in the Bernard Madoff Ponzi scheme squeezed the Mets payroll and forced owner Fred Wilpon to sell off first part, then the rest of the team.)

“These guys, they have so much money that I think if they start to get pinched elsewhere, it’s more or less a rounding error for their clubs,” said Tom Pitts, the European head of LionRock Capital, a private equity firm that has a one-third interest in the Inter Milan soccer team. “Most of these guys haven’t stretched to buy the club. It’s an expensive hobby.”

Rising interest rates could make it more expensive for would-be owners to buy into the club if they have to borrow money to pay for their new prize. “It just costs a lot more money in absolute dollars to service the debt,” Pitts said.

A handful of high-profile teams are currently on the market.

Washington Commanders owner Dan Snyder, who is under pressure to sell his team after an investigation revealed a toxic corporate culture, says he would consider unloading all or part of the once-proud NFL franchise. It is expected to fetch even more than the $4.65 billion paid for the Denver Broncos this summer by Walmart heir Rob Walton, who with an estimated net worth of $61 billion is the 16th-richest person in the world.

Robert Sarver has put his teams, the NBA’s Phoenix Suns and the WNBA’s Phoenix Mercury, on the market after an investigation found evidence of a racially and sexually insensitive workplace. Baseball’s Washington Nationals are for sale and the family that owns the Baltimore Orioles has made noise about selling, as well. The NHL’s Ottawa Senators can also be had for the right price.

Two of English soccer’s biggest names, Manchester United and Liverpool, are also on the market. Man U. was valued by Forbes in September at $4.6 billion — just a bit higher than Liverpool; both are expected to eclipse the $3.2 billion price paid for Chelsea this spring that was briefly the highest ever for a sports team.

That record was less than two weeks old when the Broncos deal was announced.

“You’ve got the likes of the Waltons, and it’s a drop in the bucket,” Clarke said. “It’s a club. It’s like, ‘When is the next Picasso up for sale?’ … The value sector has nothing to do with the economy. There’s always demand and there’s always scarce supply.”

___

AP Sports Writer Jay Cohen contributed to this story.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


              Denver Broncos running back Melvin Gordon III (25) celebrates a touchdown during the NFL football game between Denver Broncos and Jacksonville Jaguars at Wembley Stadium London, Sunday, Oct. 30, 2022. (AP Photo/Kirsty Wigglesworth)
            
              Ottawa Senators goaltender Anton Forsberg (31) makes a save against the San Jose Sharks during the third period of an NHL hockey game in San Jose, Calif., Monday, Nov. 21, 2022. (AP Photo/Godofredo A. Vásquez)
            
              Phoenix Suns guard Devin Booker (1) brings the ball up during the second half of the team's NBA basketball game against the Utah Jazz on Friday, Nov. 18, 2022, in Salt Lake City. (AP Photo/Rick Bowmer)
            
              Fans watch as the Washington Commanders face the Jacksonville Jaguars in an NFL football game, Sunday, Sept. 11, 2022, in Landover, Md.  The Washington Commanders have been sued again by the District of Columbia, this time accused of scheming to cheat fans out of ticket money. D.C. Attorney General Karl A. Racine on Thursday, Nov. 17, 2022, announced the filing of a lawsuit in civil court against the NFL team for the team's actions in taking season-ticket holder money and keeping it for its own purposes. (AP Photo/Nick Wass, File)
            
              Denver Broncos players react during the NFL football game between Denver Broncos and Jacksonville Jaguars at Wembley Stadium in London, Sunday, Oct. 30, 2022. (AP Photo/Ian Walton)
            
              Manchester United's Old Trafford stadium is seen after owners the Glazer family announced they are considering selling the club as they "explore strategic alternatives", Manchester, England, Wednesday, Nov. 23, 2022. On Tuesday, the same day the potential sale was annnounced it was also it was also confirmed that Cristiano Ronaldo had left Manchester United by mutual consent. (AP Photo/Jon Super)
            
              General view of the Anfield stadium ahead the English Premier League soccer match between Liverpool and Southampton in Liverpool, England, Saturday, Nov. 12, 2022. (AP Photo/Jon Super)
            
              FILE- Washington Commanders helmets sit on the field during practice at the team's NFL football training facility, Monday, Aug. 1, 2022 in Ashburn, Va.  The congressional investigation of the NFL's Washington Commanders will end when Republicans take over early next year. U.S. House Committee for Oversight and Reform ranking Republican Rep. James Comer issued a statement Thursday, Nov. 17, 2022, saying simply, ‘It’s over." (AP Photo/Nick Wass, File)
            
              Liverpool fans cheer their team during the English Premier League soccer match between Liverpool and Southampton at Anfield stadium in Liverpool, England, Saturday, Nov. 12, 2022. (AP Photo/Jon Super)
            
              A fan were a sack with a "Sell the Team" message during the first half of an NFL football game between the Houston Texans and the Washington Commanders, Sunday, Nov. 20, 2022, in Houston. (AP Photo/Eric Christian Smith)
            
              A photograph taken using a drone shows Manchester United's Old Trafford stadium after owners the Glazer family announced they are considering selling the club as they "explore strategic alternatives", Manchester, England, Wednesday, Nov. 23, 2022. On Tuesday, the same day the potential sale was annnounced it was also it was also confirmed that Cristiano Ronaldo had left Manchester United by mutual consent. (AP Photo/Jon Super)
            
              FILE - Phoenix Suns owner Robert Sarver watches the team play against the Memphis Grizzlies during the second half of an NBA basketball game Dec. 11, 2019, in Phoenix.Sarver has put his teams, the NBA’s Phoenix Suns and the WNBA’s Phoenix Mercury, on the market after an investigation found evidence of a racially and sexually insensitive workplace. (AP Photo/Ross D. Franklin, File)
            
              FILE - Denver Broncos owner Rob Walton waits for the team's NFL football game against the Las Vegas Raiders in Denver on Nov. 20, 2022. Inflation is not going to hurt the bankrolls of sports team owners. In fact, it may help. While the uber-rich will have to pay a little more for their eggs at the grocery store – just like everyone else – inflation is not likely to affect the bottom lines at their sports properties, whether it is yearly revenues or when it comes time to sell. (AP Photo/Jack Dempsey, File)

AP

FILE - Infowars founder Alex Jones appears in court to testify during the Sandy Hook defamation dam...
Associated Press

Infowars host Alex Jones files for personal bankruptcy

Infowars host Alex Jones filed for personal bankruptcy protection Friday in Texas, citing debts that include nearly $1.5 billion he has been ordered to pay to families who sued him over his conspiracy theories about the Sandy Hook school massacre. Jones filed for Chapter 11 bankruptcy protection in Houston. His filing listed $1 billion to […]
10 hours ago
Associated Press

Hess to buy $750 million in carbon credits from Guyana

GEORGETOWN, Guyana (AP) — U.S.-owned Hess Corporation, a consortium partner in Guyana’s offshore oil sector, has agreed to buy $750 million worth of carbon credits from the South American nation in the next decade as it works to ensure Guyana’s almost intact Amazonian rainforests remain standing for decades to come, officials said Saturday. Guyanese government […]
10 hours ago
Tennessee Gov. Bill Lee answers a question while taking part in a panel discussion during a Republi...
Associated Press

Tennessee roads plan mulls toll lanes, electric car fee hike

NASHVILLE, Tenn. (AP) — Tennessee Gov. Bill Lee is considering allowing express toll lanes on highways and tripling a fee for electric car owners as he targets his first big push after winning reelection — paying for tens of billions of dollars in roadway projects. The Republican is adamant about what he won’t do: Raise […]
10 hours ago
Associated Press

UK arrests wealthy Russian as police target Putin enablers

LONDON (AP) — British authorities have arrested a wealthy Russian businessman on suspicion of money laundering, amid efforts to disrupt potential criminal activity by oligarchs and others linked to Russian President Vladimir Putin. The National Crime Agency said more than 50 officers from a specialized unit raided the suspect’s multi-million-pound home in London on Thursday, […]
10 hours ago
Voters wait in line to make corrections to their ballots for the midterm elections at City Hall in ...
Associated Press

Non-religious voters wield clout, tilt heavily Democratic

When members of the small Pennsylvania chapter of Secular Democrats of America log on for their monthly meetings, they’re not there for a virtual happy hour. “We don’t sit around at our meetings patting ourselves on the back for not believing in God together,” said David Brown, a founder from the Philadelphia suburb of Ardmore. […]
10 hours ago
FILE - Nick Fuentes, right-wing podcaster, speaks at a pro-Trump march, Nov. 14, 2020, in Washingto...
Associated Press

Antisemitic celebrities stoke fears of normalizing hate

A surge of anti-Jewish vitriol, spread by a world-famous rapper, an NBA star and other prominent people, is stoking fears that public figures are normalizing hate and ramping up the risk of violence in a country already experiencing a sharp increase in antisemitism. Leaders of the Jewish community in the U.S. and extremism experts have […]
10 hours ago

Sponsored Articles

...
Day & Night Air Conditioning, Heating and Plumbing

Prep the plumbing in your home just in time for the holidays

With the holidays approaching, it's important to know when your home is in need of heating and plumbing updates before more guests start to come around.
...
Quantum Fiber

How high-speed fiber internet can improve everyday life

Quantum Fiber supplies unlimited data with speeds up to 940 mbps, enough to share 4K videos with coworkers 20 times faster than a cable.
...
Children’s Cancer Network

Children’s Cancer Network celebrates cancer-fighting superheroes, raises funds during September’s Childhood Cancer Awareness Month

Jace Hyduchak was like most other kids in his kindergarten class: He loved to play basketball, dress up like his favorite superheroes and jump as high as his pint-sized body would take him on his backyard trampoline.
Inflation or not, price of pro sports teams keeps going up