Winning – it’s just good business. Or is it?
A playoff win gave the Commanders their best merch day in 92 years. But does winning really grow a team’s value? Experts say it’s more about stadiums and media markets than scoreboard success.
One day after the Commanders advanced to the NFC championship game with an upset over the Lions, the franchise turned in the best-selling merch day in its 92-year history, Front Office Sports reports.
But will the win – and this year’s Dan Snyder-free turnaround – have a lasting effect on the team’s bottom line?
Short answer: maybe. But, like when all old posts containing a girlfriend are deleted from Insta, the data tells a more complicated story.
Data dive
As popular thinking goes, winning increases the revenue of the team – aka more demand for tickets, merch, etc. And that does happen.
But when it comes to overall franchise value, there’s seemingly no correlation to winning, according to a 2022 report from the Sports Analytics Group at Cal Berkeley.
One reason? A little thing called revenue sharing.
The NFL, for example, makes most of its revenue from national media rights deals, which pay out the same amount to each team, regardless of record. The NBA, NHL, MLB, and MLS each make a smaller percentage of their revenue from national media rights deals, and a higher percentage from seating/suites, concessions, parking, local media rights, and sponsorships.
And while home teams keep a lion’s share of these revenues, some of the money is still shared. 34% of each NFL team's ticket revenue goes toward a general pool to be divided equally among each franchise. The NBA, NHL, MLB, and MLS have similar arrangements.
Stadiums and local markets matter most. Of the 27 teams that more than doubled in value between 2018-2023, nine moved into, or are getting, new stadiums (somewhere, the 30-houses-before-30 guy is fist-pumping). Stadium ownership means franchises are entitled to revenue from non-sporting events held on site, such as Taylor Swift concerts.
The Sports Analytic Group also found a stronger correlation between media market size and growth in franchise value than winning and growth in franchise value.
A rising tide: The value of sports franchises keep climbing – even the Gollum cave-like basement dwellers. Using data from 2018-2023, Forbes analyzed 160 franchises across multiple sports – and found the value of the 133 slowest-growing franchises increased an average of 74%. The S&P 500 increased ~55% over the same period.
