Why the NFL’s ‘socialist enterprise’ means the Bears win at the bank even when they lose on the field – Orange County Register

As the Chicago Bears close the curtain for another disappointing season, it’s easy to see them as a failing NFL franchise. The head coach didn’t realize, the general manager was a failure and the press conference held on Monday by President George McCaskey and CEO Ted Phillips had worst rating since “Police Academy 4”

But when you look at things the other way, the Bears are doing great.

Every home game is one sold out, or near it. TV ratings is still high. And when Forbes released its annual list of the group’s estimated values, Bear grew 16% year-on-year to $4.1 billion. Only six NFL teams are worth more.

That’s not even counting the new stadium the Bears are ready to build in Arlington Heights.

Sports economists say those results suggest that in the NFL, a bad season on the field is often masked by a good season at the bank. No matter how poorly they play, the teams get a share of the revenue from television deals and national sponsorships.

For most franchises, that accounts for most of their value.
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“(Winning) matters a little bit but it certainly doesn’t matter as much in the NFL as it does in other leagues,” said Jason Winfree, a University of Idaho professor who co-wrote a book on sports finance. “Even the bad NFL teams get huge media contracts cut.”

Like most NFL teams, the Bears do not publish financial results. When asked for comment on the team’s commercial performance, Phillips said: “Following the NFL’s COVID protocols during the 2020 season no fan attended all of the Bears’ home games last season. , the return of fans to Soldier Field in 2021 allows us to more casually operate this season. ”

The shareholder-owned Green Bay Packers provide the numbers and they provide an opportunity to determine the status of the league.

Most recent annual report including the COVID-19 restricted 2020 season, when fans were not allowed into Lambeau Stadium. The Packers’ local gross fell from $211 million to $62 million, a 71% drop, but national tally, including the group’s pre-TV portion, rose from $296 million to $309 million. la.

Overall, the Packers had an operating loss of $39 million but still technically ended the fiscal year $61 million, thanks to strong returns in their portfolio.

The team portrayed the loss as a blip, and sure enough, when they offered fans the chance to buy the stock in November, it was quick. lift up $61 million is reportedly earmarked for stadium renovations.

The Bears’ financial situation is not so clear. Forbes estimates the team lost $3.6 million in the 2020 season, as opposed to their usual nine-figure earnings.

The Bears’ estimated revenue per fan, as measured by dividing locally generated revenue by the metro area’s population, is $6. Only the Los Angeles Charger is worse.

The Dallas Cowboys, meanwhile, bring in an estimated $55 per fan (unlike the Bears and Packers, they allow spectators during the 2020 season, albeit at a reduced density). Forbes said the Cowboys, who for decades marketed themselves as “Team America,” are The most valuable sports franchise in the world. The Bears are 18th on that list.

The numbers may soon be fact-checked when the Denver Broncos, owned by a trust, go up for sale. Forbes puts the team’s value at $3.75 billion, but Southern Utah University professor David Berri, who co-wrote a book on the economics of the Super Bowl, says it could sell for much more.

“(The super-wealthy) will throw huge amounts of money at a bunch to own it,” he said. “The reality is that there are only so many football clubs in existence and the number of billionaires who want to own them is much more.”

To put in the hard numbers, there are 32 teams in the NFL and more than 700 American billionaires, with another 2,000 scattered around the world. Berri noted that when former Microsoft executive Steve Ballmer bought the NBA’s Los Angeles Clippers in 2014, the $2 billion purchase price was nearly four times the Forbes estimate.

The value of Bears is definitely limited by Soldier Field. The stadium is owned by the Chicago Park District, which limits the income the team can make from it.

Team officials and city leaders reported bicycle made many changes, and in September, the Bears signed a $197 million purchase agreement to buy the former Arlington International Racecourse and surrounding property – the first step, many expected, in build a stadium there.

Winfree said the most lucrative outcome for the Bears would be for state and local governments to collect the majority of tabs. Governor JB Pritzker and Illinois legislators have great idea, and Mayor Thomas Hayes of Arlington Heights has to swear, “We will not give away the store.”

Phillips said Monday that the team envisions the 326-acre site as “an entertainment destination” that will extend beyond football games. That matches the real estate developments that have sprouted outside of stadiums everywhere from Los Angeles to Milwaukee.

While that could create a new source of income for owners, Berri says Bears fans shouldn’t expect it to make a difference on the field. His research shows no correlation between an NFL team’s revenue and their win rate, demonstrating how professional football’s “entirely social enterprise” ensures no scammers. financial losers.

“There is a salary cap,” he said. “This is not like Major League Baseball, where there are teams that can’t afford to pay $200 million. In the NFL, they can all afford the pay. A new stadium will boost the Bears’ revenue, but it won’t change how often they win. They will win more if they make better decisions and have more luck.”

jkeilman@chicagotribune.com

Twitter @JohnKeilman