How are the valuations inferred?
Like home valuations on online real estate sites, they are based on a number of factors, including location, the owner of the stadium the team plays on, and the team’s local television deals. James L. Dolan, owner of the Knicks, also owns Madison Square Garden, while the Lakers rent space at the Staples Center, which will be called Crypto.com Arena on Christmas Day.
“If you have two teams, say one owns the building and the other leases it, what I value is economics,” said Mike Ozanian, a managing editor at Forbes who compiles valuations it, said. “In other words, how much revenue does the team generate at the building compared to its costs?”
Team-related assets aren’t necessarily affected, at least not entirely. In the case of the Knicks, while Dolan owns MSG Networks, the regional cable channel that broadcasts games for the Knicks and several other New York-area sports teams, that doesn’t affect the team’s valuation. . However, the revenue generated from the network is not.
Valuations review public information on the group’s finances, consult with bankers involved in similar transactions, and review previous sales and scarcity. of the product.
The value of franchising, Cuban said, is variable, based entirely on “supply and demand versus cost and availability of money versus expected cash flow, if any, and expected price appreciation.”
What are the limitations?
In 2014, Forbes Los Angeles Clippers valuation of $575 million. Later that year, Steve Ballmer bought the team for more than 2 billion dollars. Just like when buying a home, it’s sometimes difficult to gauge how eager a certain buyer is.
https://www.nytimes.com/2021/11/23/sports/basketball/knicks-lakers-worth.html Win or lose, the Knicks and Lakers are worth billions of dollars