Patriots, Warriors, Yankees Top Teams for Winning, Creating Value
Irwin Kishner, co-chair of Herrick's Sports Law Group, spoke to Sportico about the relationship between on-the-court performance and off-the-court financial success of NBA teams. The article referenced the record-making $450 million purchase of the Golden State Warriors in 2010.
The article described how its new owners significantly changed the franchise: "After hiring Steve Kerr in 2014, the Dubs made the NBA Finals five straight years on the backs of stars like Stephen Curry, Klay Thompson, Kevin Durant and Draymond Green. . . . The off-court success has been even more dramatic. Ticket and sponsorship demand soared ahead of the Chase Center’s construction and made another leap when the $1 billion venue opened its doors in 2019."
Kishner noted, "They became a national attraction as an NBA super team[.]" He explained, "There is a positive correlation between success on the field or court and franchise valuation, with the big caveat that there are many exceptions to the rule."
Kishner further explained that "winning can drive franchise values higher by boosting baseline revenue. It helps fill venues, lifts sponsorships and propels ticket prices higher[.]" However, "the correlation varies significantly between leagues, and winning ultimately is not as important to team value as its location and venue." The article goes on to review five major sports leagues to see which franchises delivered in the standings with respect to both financials and performance.
Read the full article in Sportico here. Access may require a subscription.