How much is each franchise worth?

I thought it would be interesting to speculate on how much each franchise is worth in dollar value. The franchise fee is what right now, 7 million dollars? so you would figure each team is worth atleast that. My bet is on this order from highest to lowest value.
BC
Toronto
Edmonton
Calgary
Montreal
Saskatchewan
Hamilton
Winnipeg

What are your thoughts?

Good posting Chris.
It's the old story of how much is someone willing to pay.
Having said that though and in this time of uncertainty, I think the values of a CFL teams have shot up while conversly the other leagues may have gone south.
I would think a new franchise should have a minimum $10M tag.
As for current value, WOW.
Maybe the Riders are on top around $15M-$20M with their sellouts and mega profits the last few years.
I would think no current franchise is valued below the $10M mark.

Generally a business is worth a ratio of their annual profits, plus assets and goodwill. At a low 6X ratio, for instance, we could estimate their approximate value from their estimated annual return. But some teams also own training facilities, fieldhouses, ect. We should also amortize the financial impact of hosting the Grey Cup over an 8-yr period, as part of the teams avg. annual profit, plus cash on hand, bonds, ect.

BC: Profit $2M = $15M worth - new retractable dome in 2010 will enhance value

Cal: Profit $2M = $12M worth - not many profit streams, but solid fan base

Edm: Profit $3M = $50M worth - many longterm investments from longterm profits

Sask: Profit $6M = $50M worth - over $22M in revenue last season, higher this yr

Wpg: Profit $1M = $8M worth - had a $200k profit on football ops last yr, needs stadium upgrade

Ham: Loss ($2M) = $1M worth - price increase hurt attendance last yr, needs stadium upgrade

Tor: Profit $1M = $6M worth - break-even proposition with 30k fans, Grey Cup highly profitable

Mtl: Profit $2M = $15M worth - high ticket and sponsorship revenue, approval for stadium upgrade to 25k

Are you serious, Sask and Edm worth 50 mil? The cats only worth 1 mil? I would say that each team is worth around 10 mil but you couldn't get anyone to buy them for more than 3 mil. No team owns their own stadium. The cities cuts each team a sweet deal.

I would like to know where you get your profits from as well.

Edm, Sask and Wpg are community-owned teams and publically release their Financial Statements each year. So we know exactly how much money they are making. Those clubs all posted a profit on football operations last season. Sask reported revenues of over $22M and and operate within a $4M salary cap (almost)...so it's not hard to figure out they make money. BC's ticket revenue and sponsorships are at all time highs, and their owner said he made a modest profit this season. Teams make an extra $500k profit by hosting a playoff game and about $4M for hosting the GC (or $500k for 8 years...except for the Cats.) The league's TV contract and national sponsorship revenues are also at all time highs.

Please provide a link. The last I remember is that they made about 3 mil but if I am wrong, please prove it.

I also know that the Eskimos were almost in financial ruin until the city sold the Trappers for 8 mil and gave the Eskies operating expenses.

The teams aren't worth anything. Like I said before, none own their own stadia. I think it's a joke that you can say the Cats are only worth 1 million dollars. I take that as a major offense. Just because we aren't competitive doesn't mean we aren't worth anything. Look at the Leafs. Perenial losers and they are one of the most valued franchises in the NHL. Give me a break!

Looks like a pretty good an analysis to me. However, I would wonder who would want to plunk down $50M for Edmonton or Saskatchewan because the league is so small and not all teams are in the black.

The Cats are worth-"less" than other CFL teams because they lose money. This has nothing to do with their wins and losses. Any prospective new owner will be saddled with annual loses of approx. $1M-$2M operating a team in Hamilton. There is little hope of reducing that loss very much considering their stadium cash flow and economic climate of the area. That reduces their value compared to other teams which are break-even or small profit operations. The Cats also do not share in the avg. $4M revenue which comes from hosting a GC game. It was reported that the Argos turned a $5M profit from their highly-succesful GC last year, with Mont. estimating a similar profit this season.

Edm is not in financial difficulty and they put their entire Trapper sale revenue into longterm savings accounts, which have ballooned to $15M in value. Anyone buying the Esks would assume these cash reserves, along with a money-making franchise. Considering their financial position, the Esks would be worth much, much more than $50M if they were a private business and not saddled with the negative financial perception of the CFL. The Esks have demonstrated long-term profitability and any new owner could expect these profit streams to continue.

Sask had sales of over $22M in 2007, and will be even higher this year with season-long sellouts. Considering the tight cost controls in the CFL, a private operator could probably generate a $6-8M annual profit, so the estimated $50M value is low also.

I am telling you that the only reason why people see the cats as a crummy financial team is because of their product on the field. If they sold out like SSK or MTL, you wouldn't be saying it. The way to bring things back in Hamilton is with a winnig product.

I believe it was only a few years ago when SSK was losing and weren't getting more than 22K fans and they were on the brink. Now they win a single grey cup and they are worth 50 mil? give me a break. give them a couple years and let them fall back to earth.

If the league was as strong as you say, the salary cap would be more than 4.2 million dollars.

I am still waiting for the link to review. Thanks in advance.

How do you know how much each team makes or loses? Can we please have a source, because otherwise your just making things up. I find it very hard to believe Sask is worth 50 million.

I don't think the league actually releases financial figures. I remember years ago when I was in Grade 12 Economics (so late 80's), I sent a letter to the league asking for financial information because we had to do a report on a Canadian company and show how financially viable they were. I received a letter back from the league offices stating that they don't release such data. Things might have changed since then because of better advertising and television revenues, but I'm not sure if the league would provide such info. You might have to ask each team individually to get a firm picture, and that's even if they're willing to divulge the numbers.

Here is your answer chris... this is from the Riders' AGM in 2008... his numbers are accurate, at least for the Riders anyway..

2007 AGM ANNOUNCEMENTS

FINANCIAL REPORT
During his financial report, Mike Back, the Saskatchewan Roughriders? Vice President of Finance and Operations, revealed the Football Club reported a record profit of $1,737,377.

The club exceeded the $22 million plateau in total operating revenue and expenditures, eclipsing the previous high of $15 million. Total net assets increased by $1,998,857 to $5,096,393. The contribution to net assets includes net income of the year and $278,250 in membership shares, as the club issued 1,113 shares in 2007.

This can be found on the Rider site, you just click on News, then Press Releases and Archives at the bottom of the page.

Okay, so SSK has a profit of less than 2 million dollars per year at this moment because everyone is on the bandwagon. And you are serious to tell me that someone is stupid enough to pay 50 million?!? It would take you at least 25 years before you started making any money. That's a terrible ROI and terrible assumption that they are worth 50 mil.

I said before, teams are worth about 10 million and would sell between 2-3 million.

I didnt say the Riders were worth about 50 million, I just said that the numbers Xvys provided were accurate.

When valuing businesses, you don't just look at the most recent income/losses, you look at at least the previous 3 to 5 years and normalize for management fees, non-recurring transactions, etc. and then project future revenues/expenses and cashflows based on future industry, local, macro-economic, etc. trends

As to a 6 times multiplier, it could be as low as 3X (small businesses) or as high as 10X (public companies). 22 million in revenue sounds like a lot but it was a great year in attendance and on the field and if only 1.7 million hits the bottom line (7.7%), IMO thats a pretty borderline business and a 3X or 4X mulitplier is more appropriate.

Nowadays, 22 million in revenue is basically a small business.

IMO the Riders are an average team value-wise (small market offset by large fanbase... small venue offset by sellouts) and 1.7 million times 4 = 6.8 million.

Furthermore I think the expansion fee has more to do with lost television revenues for the other teams. The TV pie gets split 9 ways instead of 8 ways.

If the TV contract is 75 million over 5 years = 15 million per year = 1.88 million per team
Add another team and it works out to 1.66 million per team (including the expansion team)
1.66 million * 4 = 6.66 million

A 7 million dollar expansion fee basically reimburses the existing teams for the lost TV revenue for 4 years (caused by splitting the TV pie into one more slice) Or they are paying 7 million now to receive 7 million of future cash flows in the next 4 years.

AFAIK the Stamps (High consistent attendance in a football city = higher value franchise) sold a couple years ago for around 6 million, the expansion fee is about 7 million and the Riders could be fairly valued as above at 7 million (based on a 4 times multiplier)

Says to me that an average franchise is worth about 7 million. Maybe closer to 10 for the Eskimos, probably only 4 or 5 for the Cats. Sorry for the long post.

well according the BOD in winnipeg the team is worth a new stadium valued around 140 million with the trainign facility.

The Edmonton Eskimos would have to be at the top of the list of team valuations for the CFL. For years the team has been a beacon of success and has stockpiled monies derived from those years and continues to make money, playing in arguably the league's best stadium. However, even with all that, the team isn't worth anywhere near $50 million.

Depending on which city hosts a playoff game, the Lions, Riders, Alouettes, and to a lesser extent; Calgary are most likely next in line (although the Als' massive sponsorship and broadcast deals make them a wildcard whereby their true value might be considerably higher if not highest of all CFL teams).

Their are several factors keeping values of CFL teams down such as the lack of modern stadiums; also as long as Halifax and Quebec City are the top potential NEW markets, the addition of new teams and the usual financial windfall that follows from expansion fees all but not exist, and will only cut an already puny TV deal pie even more thinly. Not to mention if the team were to lose anymore franchises, the viability of the whole league itself would be put into question. All these things combined will continue to hold franchise values down.

Where did you get that, the Eskimos have never been in trouble financially and have supported almost every CFL team over the years. Also the City could not sell the Trappers because the were owned by the Eskimos.

A CFL franchises value is what someone is willing to pay for it. There’s a lot more that goes into a valuation than just the profit and loss statements. But according to a recent Esks Financial Statement they have about $15M in longterm investments and rainy-day funds. So obviously they will be unlikely to sell that bank account for less than $15M. Then they also have a track-record of longterm profitablity with buildings and real estate holdings. We can only speculate on their actual worth, it could be $30M or perhaps $70M, but they aren’t for sale.

Frankly, there was not a lot of thought put into a $50M valuation of the Riders, they could be worth $25M or maybe $60M? They had revenues of only $14M in 2006, so the $22M & $23M revenues in '07/'08 may only be a short term blip, but you won’t be buying the Riders for $10M, they’ll earn that much just for the stadium naming rights…for a stadium they don’t even own!

The rest of the teams are probably worth a bit less than those successful community-owned teams, but who knows how much money the Als make? Some reports claim they rake in huge dollars, even with their puny stadium. Although, I would bet that if you waved $7M in front of the owner of the Cats (and guaranteed to operate the team for at least two seasons), he might jump at the chance to sell for that amount. For most other teams, you can probably double that.

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