When the Chicago Bears lowered the lid on another disappointing season, it was easy to see them as an NFL franchise in disarray. The head coach failed, the general manager failed, and Monday’s press conference hosted by chairman George McCaskey and CEO Ted Phillips received the worst reviews since Police Academy 4.
But if you look at things from the other side, the “bears” are all right.
Every home game has been sold out or close to it. TV ratings remained high. And when Forbes released its annual list of team valuations, the Bears were up 16% year-over-year to $4.1 billion. Only six NFL teams are worth more.
And that’s not counting the new stadium the Bears seem ready to build in Arlington Heights.
Sports economists say these results show that in the NFL, a bad season on the field is usually belied by a good season in the bank. No matter how badly they play, teams get a share of an ocean of revenue from television contracts and national sponsorships.
For most franchises, this makes up the bulk of their cost.
“(Winning) matters little, but it’s certainly not as important in the NFL as it is in other leagues,” said Jason Winfrey, a University of Idaho professor and co-author of a sports finance textbook. “Even bad NFL teams get a piece of a huge media contract.”
Like most NFL teams, the Bears don’t release financial results. Asked to comment on the team’s commercial activities, Phillips said: “After the NFL’s COVID protocols for the 2020 season did not result in fans attending all of the Bears’ home games last season, the return of fans to Soldier Field in 2021 allowed us to conduct more normal business. operation this season.
The shareholder-owned Green Bay Packers does provide numbers and insight into the state of the league.
The latest annual statement concerns the 2020 COVID-19 restricted season, when fans were not allowed into Lambo Field. The Packers’ local revenue fell from $211 million to $62 million, down 71%, but national revenue, which includes a share of the team’s television revenue, rose from $296 million to $309 million.
Overall, the Packers posted an operating loss of $39 million but still technically ended the fiscal year up $61 million thanks to strong growth in their investment portfolio.
The team presented the loss as a blip, and sure enough, when it offered fans the opportunity to buy shares in November, it quickly raised $61 million earmarked for stadium renovations.
The financial condition of the “bears” is not so clear. Forbes estimates the team lost $3.6 million for the 2020 season, as opposed to its usual nine-figure earnings.
The Bears’ estimated income per fan, measured by dividing local income by suburban population, was only $6. Only the Los Angeles Chargers fared worse.
The Dallas Cowboys, meanwhile, brought in roughly $55 per fan (unlike the Bears and Packers, they allowed spectators through the 2020 season, albeit at a lower density). Forbes claims that the Cowboys, billed as “Team America” for decades, are the most valuable sports franchise in the world. The Bears are in 18th place on this list.
The numbers will likely become reality soon when the trust’s Denver Broncos are up for sale. Forbes estimates the team’s worth at $3.75 billion, but David Berry, a University of Southern Utah professor who co-authored a book on Super Bowl economics, said it could sell for much more.
“The (super-rich) will throw huge amounts of money at the team to own it,” he said. “The reality is that there are a limited number of teams and the number of billionaires who want to own them is much greater.”
In exact numbers, there are 32 teams in the NFL and over 700 American billionaires, with another 2,000 scattered around the world. Berry noted that when former Microsoft chief executive Steve Ballmer bought the NBA’s Los Angeles Clippers in 2014, the $2 billion purchase price was almost four times the Forbes estimate.
The value of the Bears is no doubt limited to Soldier Field. The stadium is owned by Chicago Park, which limits the income a team can make from it.
Team officials and city leaders reportedly squabbled over the changes, and in September the Bears signed a $197 million purchase agreement to purchase the former Arlington International Racecourse and surrounding property – many expect this to be the first step towards building a stadium there. .
Winfrey said the most beneficial outcome for the bears would be for state and local governments to take over most of the billing. Gov. J.B. Pritzker and Illinois legislators were lukewarm about the idea, and Arlington Heights Mayor Thomas Hayes vowed, “We’re not going to give up the store.”
On Monday, Phillips said the team is looking at the 326-acre site as an “entertainment destination” that will go beyond football games. This is in line with real estate development that has popped up outside stadiums everywhere from Los Angeles to Milwaukee.
While it could generate new revenue for owners, Berry said Bears fans shouldn’t expect it to make a difference on the pitch. His research shows no correlation between an NFL team’s earnings and its winning percentage, demonstrating how professional football’s “purely socialist enterprise” guarantees no financial losses.
“There is a salary cap,” he said. “It’s not like Major League Baseball where there are teams that can’t afford a $200 million salary. Everyone in the NFL can afford a salary. The new stadium will boost the Bears’ revenues but won’t change how often they win. They will win more if they make smarter decisions and have better luck.”