Jerry Richardson’s decision to put the Carolina Panthers up for sale would seem to be terrible news for the NFL. Richardson, a senior statesman who co-chaired the committee that hired Roger Goodell in 2006 and chaired the owners’ highly successful labor committee, is selling amid reports of settled complaints of inappropriate workplace behavior.
While Richardson’s announcement on Sunday came as a shock, a sense of relief and also anticipation was circulating among some NFL executives. Relief because Richardson’s seemingly voluntary action solved what could have been yet another black eye for the NFL — having to wrestle away a team from a scandal-ridden owner much in the way the NBA had to do with former Los Angeles Clippers owner Donald Sterling.
And anticipation because NFL teams come on the market so rarely, it will be an opportunity for the league to set a new benchmark for the value of its teams.
In the last five years, only one team — the Buffalo Bills — was sold. Terry and Kim Pegula bought the franchise in 2014 in one of the league’s oldest stadiums and smallest markets, for $1.4 billion, and the truth was they were the only real bidder.
Fast forward to 2017, a year in which two NBA teams affirmed valuations of more than $2 billion. The Houston Rockets sold to Tilman Fertitta for $2.2 billion, and 49 percent of the Nets was sold to Joseph Tsai at a valuation of $2.3 billion.
That’s for a league where teams can actually lose money. It’s much harder in the NFL, where each team picked up $244 million with a national revenue check last year, mostly from the $6 billion a year in TV rights fees. Forbes says the Panthers are now worth $2.3 billion and while there are many factors at play, consider this: The Panthers’ lease on their stadium in Charlotte expires in two seasons. There have been no talks that the franchise could move, but it could lead to a new owner paying more if he knows the city will help him build a new facility.
The number one factor that NFL teams have going for them is scarcity. There are only 32 teams, and they don’t come up for sale often. Only a quarter (eight out of 32) of the league’s teams have turned over in the past 15 years.
Oakland Raiders owner Al Davis died in 2011. The team stayed in the family.
Tennessee Titans owner Bud Adams died in 2013. The team stayed in the family.
Detroit Lions owner William Clay Ford Sr. died in 2013. The team stayed in the family.
Tampa Bay Buccaneers owner Malcolm Glazer died in 2014. The team stayed in the family.
Denver Broncos owner Pat Bowlen stepped down as a result of the effects of Alzheimer’s Disease in 2014. The team stayed in the family.
So, with the Forbes valuation as a baseline and considering the scarcity of NFL teams on the open market, it’s likely the Panthers will sell for north of $2.5 billion. Add in the cash the Panthers have banked over the years and Richardson will likely walk away with a tidy profit of more than $3 billion over his initial investment, with others, of $206 million for the expansion franchise in 1993.
Who can come up with that kind of money? Most of the early talk has been on local businessmen, such as Marcus Smith, buying the team. But the game has changed. Bills owner Terry Pegula spends most of his days in Florida, not Buffalo. Josh Harris of New York City bought the Philadelphia 76ers and the New Jersey Devils. Geography doesn’t matter as much, especially given how rare it is for an NFL team to come to the market.
Don’t discount Tilman Fertitta’s cousins Frank and Lorenzo, who love the game of football and have the cash to make it work after selling the UFC for $4 billion last year.