Welcome to Trendlines, your weekly installment of what’s trending up and what’s trending down in the world of sports.
This week we’re talking about money, money, money. It turns out that it’s not just ABBA or the O’Jays who enjoy it.
I mean look at the Los Angeles Lakers. The Buss family hasdecided to sellthe team that Jerry Buss bought back in 1979 from Jack Kent Cooke.
You might have seen the price tag that the Lakers are set to be sold for and went, “Man, that is a lot of green.”
But just how good was Buss’ investment back in the days before Magic Johnson?
Let’s dive right into this question with a big upswing.
The Buss family was able to sell the team for a franchise valuation of $10 billion this go around. That’s way more than the previous media valuations had put the team at.
Moreover, it’s way more than the team was purchased for in 1979. Buss bought the team for less than $100 million in 1979.
To put that in percentage terms, we’re talking about an increase of over 10,000%
The percentage increase falls to about a “meager” 4,000% taking into account inflation.
I wish my investments had such meager returns.
It probably helps that the Lakers were absolutely dynamite during the Busses’ ownership. They were previously a team that had generally struggled to win the big one while in Los Angeles. The team has won 11 NBA titles since 1979.
No other team won more than six during that time frame.
I think we should be very clear that what is happening with the Lakers is not occurring in a vacuum.
The average NBA is worth nearly $5 billion now. The average team was worth a little bit more than $100 million in 1995.
Now, one way to look at that is the Lakers are worth a lot more than the average. That’s true. That’s what you get for being such a good team in the second most populated city in the country.
The other way to look at it (and in my opinion, the correct way) is that the same phenomenon that made the Busses wealthy beyond anyone’s wildest dreams is occurring league-wide.
Most would attribute that to the massive media deals that the NBA and other leagues have been able to sign the last few decades.
Indeed, there has been no league better at signing media deals than the NFL. Companies will pay hundreds of millions to broadcast just a few games.
It helps that the NFL has long pooled its media rights when negotiating with television and now streaming companies.
Even so, the scale of the increase is nuts. NFL teams were worth less than $200 million on average in 1995. Now, we’re talking well more than $6 billion for the average team!
This is an increase of about 4,000% in just 30 years.
I’d point out too that this is an average. I have little doubt that a team like the Dallas Cowboys would fetch far more than $10 billion if Jerry Jones decided to put the team on the market.