When the Chicago Bears lowered the lid on yet another disappointing season, it was easy to see them as an NFL franchise in disarray. The head coach had not figured out, the general manager was a flop, and the press conference on Monday by Chairman of the Board George McCaskey and CEO Ted Phillips got worst reviews page “Politiakademiet 4.”
But when you look at things differently, the Bears are fine.
Every home game was one betray, or close to it. TV reviews remained high. And when Forbes released its annual list of estimated team values, Bears had risen 16% year-on-year to 4.1 billion. Only six NFL teams are worth more.
That does not even count the new stadium that the Bears appear to be ready to build in Arlington Heights.
Sports economists say these results show that a bad season on the court in the NFL is usually contradicted by a good season in the bank. No matter how badly they play, the teams get a share of the sea of revenue generated by TV deals and national sponsorships.
For most franchises, it accounts for the bulk of their value.
“(Winning) means a little bit, but it certainly doesn’t mean as much in the NFL as it does in other leagues,” said Jason Winfree, a professor at the University of Idaho who co-authored a textbook on sports finance. “Even the bad NFL teams get a share of the huge media contract.”
Like most NFL teams, the Bears do not publish financial results. Asked for a comment on the team’s commercial performance, Phillips said: “After the NFL’s COVID protocols in the 2020 season saw no fans present for all of the Bears ‘home games last season, fans’ return to Soldier Field in 2021 gave us a more normal business. this season. ”
The shareholder-owned Green Bay Packers provide numbers and they offer a window into the league’s health.
The latest annual tax return covers the COVID-19-dominated 2020 season where fans did not get access to Lambeau Field. Packers’ local revenue fell from $ 211 million to $ 62 million, a 71% drop, but national revenue, which includes the team’s share of TV money, rose from $ 296 million to $ 309 million.
Overall, the Packers had an operating loss of $ 39 million, but technically, the fiscal year ended $ 61 million in black thanks to strong gains in their investment portfolio.
The team presented the loss as a blip, and quite rightly so, when it offered fans the chance to buy shares in November, it quickly became raised one reported $ 61 million earmarked for stadium renovation.
The Bears’ financial situation is not so clear. Forbes estimates that the team lost $ 3.6 million during the 2020 season, as opposed to its usual nine-digit earnings.
Bears’ estimated revenue per. fan, measured by dividing locally generated income by the population in the metro area, was a paltry $ 6. Only the Los Angeles Chargers fared worse.
The Dallas Cowboys, meanwhile, brought in an estimated $ 55 per fan (unlike the Bears and Packers, they allowed spectators in the 2020 season, albeit with a reduced density). Forbes says the Cowboys, who for decades have marketed themselves as “America’s Team,” are most valuable sports franchise in the world. The Bears are number 18 on the list.
The numbers are likely to get a reality check soon when the Denver Broncos, owned by a trust, go on sale. Forbes estimates the team’s value at $ 3.75 billion, but David Berri, a professor at Southern Utah University who co-authored a book on the economics of the Super Bowl, said it could sell for much more.
“(The ultra-rich) will throw huge amounts of money at a team to own it,” he said. “The reality is that there are only so many teams that exist and the number of billionaires who want to own them is higher than that.”
To put it bluntly, there are 32 teams in the NFL and more than 700 U.S. billionaires, with another 2,000 scattered around the rest of the world. Berri noted that when former Microsoft CEO Steve Ballmer bought the NBA’s Los Angeles Clippers in 2014, the purchase price of $ 2 billion was almost four times Forbes’ estimate.
The Bears’ value is undoubtedly limited by Soldier Field. The stadium is owned by the Chicago Park District, which limits the income the team can wring from it.
Team officials and city leaders have reportedly fought over making changes, and in September the Bears signed a $ 197 million purchase agreement to buy the former Arlington International Racecourse and the surrounding property – the first step, many expect, in building a stadium there.
Winfree said the most lucrative outcome for the Bears would be to get the state and local government to take much of the flag. Gov. JB Pritzker and Illinois lawmakers have been fat with that idea, and Arlington Heights Mayor Thomas Hayes has swore, “We will not give away the store.”
Phillips said Monday that the team envisions the 326-acre area as “an entertainment destination” that will go beyond football games. It’s in line with property development that has sprouted outside stadiums everywhere from Los Angeles to Milwaukee.
While it could erode a wave of new income for the owners, Berri said Bears fans should not expect it would make a difference on the field. His research shows no correlation between an NFL team’s earnings and its winning percentage, showing how the “purely socialist business” of professional football ensures that there are no financial losers.
“There’s a pay ceiling,” he said. “This is not like Major League Baseball, where there are teams that can not afford a salary of $ 200 million. In the NFL, they can all afford the payroll. A new stadium will increase revenue for the Bears, but that does not change how often they win. They will win more if they make better decisions and have more luck. ”