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QuoteIn their annual NFL valuation of NFL franchises, the Jaguars ranked No. 25 of 32 NFL franchises. That's up two spots and nearly $500,000 from last year's rankings. Khan purchased the team from Wayne Weaver for under $800 million.
http://jacksonville.com/breaking-news/2016-09-14/story/jaguars-are-worth-double-amount-shad-khan-paid-less-five-years-ago
Dayyyyum.
Because context is our friend, and lords knows the local media can't be bothered to provide any context beyond the implicit "Khan gets rich off Jacksonville" rhetoric that gets everyone all fired up, let's actually look at what happened, shall we. I pulled the 2011 numbers (the final year that Weaver owned the team) and plotted them compared to the new numbers released today by Forbes. During this time period, the Jaguars valuation increased by roughly $1.225 billion dollars, fueled largely by a $27 billion television deal that kicked in after the 2013 season, shared equally among owners. Great ROI for sure on Khan's purchase, but still $70 million below league average gains during this same time period.
(https://s21.postimg.org/p1xw016fr/Context.png)
Here's the franchise-by-franchise breakdown:
(https://s15.postimg.org/9f7bfg52z/Abs.png)
What's really interesting though, which for whatever reason nobody is picking up on, is the relative, rather than absolute, growth in valuation for the Jaguars since Khan took over. Check out the numbers.
(https://s15.postimg.org/npgvqxlff/Rel.png)
Take a look at the top six teams. What do these teams exhibiting the sharpest growth all have in common? Los Angeles. Oakland. Minnesota. Atlanta. San Francisco. As Forbes alludes to in their report, these franchises have been boosted by the construction of, or plans for, new stadiums. Not just standard stadiums, either, but state-of-the-art, revenue-driving palaces. To the tune of $2.6 billion (Los Angeles), $1.9 billion (Las Vegas, which is why the Raiders valuation went through the roof this year), $1.6 billion (Atlanta), $1.4 billion (San Francisco), and $1.1 billion (Minnesota).
What does this tell us?
Since Khan has taken over the Jaguars, he has effectively grown the franchise at new stadium rate, for pennies on the dollar compared to his contemporaries. It can't be overstated enough that by 2011, Alltel Stadium was rapidly being surpassed by newer stadiums, to the point that there was a near consensus (including on this board) that Jacksonville would need to build a new stadium to keep the team when the lease expired in 2029.
We can debate whether it was worth it until the sky turns green, but there's no denying the fact that, for $90 million in taxpayer dollars, a mere 5% of what Atlanta is ponying up for their new stadium, Khan transformed an aging Everbank Field into what's viewed as a top-tier stadium. Couple that with hosting a game in London each year, and Khan has turned the Jaguars from financial bottom-feeders that other NFL owners grumble about into one of the NFL's more profitable teams, and a team that generates more revenue than larger market franchises and more storied teams:
(https://s15.postimg.org/5ldv6anqz/Operating_Income.png)
(https://s15.postimg.org/6q7xboa7v/Rev.png)
All while carrying very little debt relative the rest of the league:
(https://s15.postimg.org/tnup164e3/Debt_Equity.png)
NFL politics are the worst, and I strongly believe that NFL cities deserve a cut of the massive television contract the NFL holds (without our publicly-subsidized stadiums, there would be no contract). That said, it's worth pointing out, for context, that Khan has made less money on the Jags than his average counterpart, while the taxpayers of the city have arguably gotten amongst the largest bang for their buck.
Great analysis, Ken. However, the league absolute average gains are always thrown off by the top couple of teams, which earn far more than the others. The Jags may have increased less than "average", but not less than most other teams. Especially considering that the TV deal can now factor in LA.
And now you know why the NFL is freaking out about their TV ratings.
Quote from: Murder_me_Rachel on November 16, 2016, 01:47:59 PM
Quote from: KenFSU on September 14, 2016, 11:07:43 PM
That said, it's worth pointing out, for context, that Khan has made less money on the Jags than his average counterpart, while the taxpayers of the city have arguably gotten amongst the largest bang for their buck.
You mean Khan has gotten rich for far less in taxpayer dollars than other cities? What "bang" have we received? The "privilege" to pay to use a stadium that our tax dollars built? And to watch a team that is absolute garbage?
Your whole post is absurd, frankly. The bottom line is: The Jags are terrible. Aside from the TV revenue, there is absolutely no reason that his franchise should have increased in value...except when you account for the fact that we have new video boards, clubs, and pools, thanks to the tax payers. Wow, we didnt get scammed as hard as Atlanta. Let's really celebrate that.
The NFL is a complete and utter scam, bilking the cities where teams are located. And, once again, everyone goes along with it because footbaw, and God forbid I don't get my Jaguars.
Wait, you don't like the Jags?
Quote from: Murder_me_Rachel on November 16, 2016, 01:47:59 PM
Quote from: KenFSU on September 14, 2016, 11:07:43 PM
That said, it's worth pointing out, for context, that Khan has made less money on the Jags than his average counterpart, while the taxpayers of the city have arguably gotten amongst the largest bang for their buck.
You mean Khan has gotten rich for far less in taxpayer dollars than other cities? What "bang" have we received? The "privilege" to pay to use a stadium that our tax dollars built? And to watch a team that is absolute garbage?
Your whole post is absurd, frankly. The bottom line is: The Jags are terrible. Aside from the TV revenue, there is absolutely no reason that his franchise should have increased in value...except when you account for the fact that we have new video boards, clubs, and pools, thanks to the tax payers. Wow, we didnt get scammed as hard as Atlanta. Let's really celebrate that.
The NFL is a complete and utter scam, bilking the cities where teams are located. And, once again, everyone goes along with it because footbaw, and God forbid I don't get my Jaguars.
MMR, your criticisms of other people's football fandom is always amusing in light of the fact that you're one of Metro Jacksonville's biggest Gators homers. Perhaps we should follow your example and fight the "scam" by instead watching 20 year old kids work without pay. Instead of using tax dollars directly, let's just have them built by your preferred model: allowing people to give big gifts to athletics programs and booster clubs while writing it off on their taxes as "charitable deductions." This would certainly allow us to overlook the fact that most programs will still require subsidies from their schools or state (ie, tax payers) to keep up, and thereby feel better about ourselves for not buying into a scam BECAUSE FOOTBAW, GOD FORBID I DON'T GET MY GATAS.
I don't care what Forbes says, nobody on this planet would give Khan $1.95 billion for this franchise. If he could get that he would probably sell right now.
Quote from: MusicMan on November 16, 2016, 08:51:03 PM
I don't care what Forbes says, nobody on this planet would give Khan $1.95 billion for this franchise. If he could get that he would probably sell right now.
Oh, please. NFL teams basically print their own money. Khan isn't the first to prove that the team doesn't have to be successful on the field to be successful off it.
Quote from: MusicMan on November 16, 2016, 08:51:03 PM
I don't care what Forbes says, nobody on this planet would give Khan $1.95 billion for this franchise. If he could get that he would probably sell right now.
Yeah.
Who would want to own something that has more than doubled in value in 5 years?
Hysterical. That's a speculative valuation. Wasn't the Jags the last team that sold? The article has no value unless someone pays that much for the team, or another team in the NFL, just like any other business.
What are the tax implications for Khan, by the way? He only pays taxes on earnings, not total value correct?
Quote from: MusicMan on November 17, 2016, 09:04:38 AM
Hysterical. That's a speculative valuation. Wasn't the Jags the last team that sold? The article has no value unless someone pays that much for the team, or another team in the NFL, just like any other business.
What are the tax implications for Khan, by the way? He only pays taxes on earnings, not total value correct?
The Browns sold in 2012 for $1 Billion exactly. I think it's indisputable that when comparing the facility (Also owned by the City), the amenities, the upgrades, and even the on-field product (yes, seriously), the Jaguars have grown more than the Browns have since 2012.
MusicMan, you might want to get your head out of the sand on the valuation of these franchises. Hell, a second-tier basketball franchise sold for $2 billion. There are tax implications (and likely other factors, as well) that affect the valuation:
http://sports.yahoo.com/blogs/nba-ball-dont-lie/report--steve-ballmer-could-recoup-as-much-as--1-billion-spent-on-clippers-purchase-in-tax-deductions-212247260.html
The Jaguars are clearly worth the stated amount *and* Jacksonville has been very fortunate to have Shad Khan buy "our" franchise. It's a win-win, and that's a good thing.
Quote from: MusicMan on November 17, 2016, 09:04:38 AM
Hysterical. That's a speculative valuation. Wasn't the Jags the last team that sold? The article has no value unless someone pays that much for the team, or another team in the NFL, just like any other business.
No, no, no and no.
Come on man, this stuff isn't hard to find.
Sure, most valuation is obviously somewhat speculative, but Forbes is very transparent in its methodology and forecasts based on league revenue, margin, capex, and local stadium economic figures easily available to the public, if people are willing to do a quick Google Search rather than immediately cry speculative bullshit.
Since 1991, NFL franchises have appreciated at a 12.5% annualized rate and average a 9% cash yield. And, since Khan purchased the Jaguars, the NFL has signed the richest television deal in world history ($27 billion over 9 years), split evenly amongst teams. On top of that, the league has closed even more secondary television deals (including selling their Thursday night package four times over to CBS/NBC, NFL Network, Twitter and Verizon) with more surely to come as content consumption patterns change. This year alone, the league should total close to $8 billion in television revenue. Insane margins + compounding long-term content agreements = batshit value.
And, no, the Jags weren't the last team to be sold. The Buffalo Bills were sold in 2014 for $1.4 billion (slightly above Forbes valuation for that year). The Cleveland Browns were sold in 2012 for $1 billion (slightly above Forbes valuation for the franchise in 2012). And the Jaguars were sold for $770 million (slightly above Forbes $725 million valuation). While I'm not sure I would personally make the argument - some cracks in the foundation are starting to show this season - you could easily make a convincing case that the valuations are actually a bit conservative.
Therefore, to repeat, 1) not so hysterical, 2) not so speculative, 3) no, the Jags weren't, 4) then the article must have value if real-world market conditions have historically matched or exceeded Forbes valuations.
Other than that, hit the nail on the head ;)
OK I must be influenced by what I've been seeing on the field the last couple of home games. Hard to imagine anyone giving that type of money for the worst team in the second smallest media market (Go Green Bay!!).
I'd say they aren't worth a nickel more than $1.8 billion!!
Quote from: MusicMan on November 18, 2016, 04:33:28 PM
OK I must be influenced by what I've been seeing on the field the last couple of home games. Hard to imagine anyone giving that type of money for the worst team in the second smallest media market (Go Green Bay!!).
I'd say they aren't worth a nickel more than $1.8 billion!!
Haha, fair enough, I certainly can't blame you :D
To that point, just out of my own curiosity, I ran the numbers to see if there was any correlation between value gained and winning on the field.
Literally nothing.
(https://s14.postimg.org/pb029iff5/Untitled2.png)
The strong revenue share obviously has a lot to do with that, but somewhat surprising nonetheless considering that things like ticket sales, stadium economics, and merchandise do factor in as well.
In three years time or so, it will be interesting to see how the valuation of the franchise (whether or not Blake works out, or Gus is fired, etc.) is affected by the development about to happen in and around that exciting new "entertainment district" downtown.
Will the name "Doro District" catch on as the name for that whole area?