The sky is not the limit: Professional sports teams’ runaway selling pricesMarch 20, 2023 – Article
Pierce O'Donnell, esteemed trial attorney, published the article “The sky is not the limit: Professional sports teams’ runaway selling prices" in Sports Business Journal.
The world’s 50 most valuable sports teams are worth almost a quarter of a trillion dollars combined, according to Forbes.
What is happening here? The tectonic shift in skyrocketing values of teams in the NBA, NFL, MLB, and NHL -- plus prestigious Premier League and other soccer teams -- cannot be attributed to any single factor. Surely, scarcity of available products and the bragging rights that come with billionaires owning these trophy assets are relevant considerations.
These teams operate in a monopoly environment. Other than occasional expansion franchises, the major sports leagues are not authorizing new teams, and you cannot just show up with some players and ask for a game. If you want to own an NFL team, there are only 32, and the last new franchise (Houston Texans) took the field over two decades ago. The NBA last expanded in 2004 (Charlotte Bobcats, after the Hornets moved to New Orleans in 2002), while MLB minted its last franchises in 1995 (Arizona Diamondbacks and Tampa Bay Rays). Scarcity drives up values.
Read the full article here.