Denver Broncos Sale, At $4.65 Billion, Will Lift The Value Of Other NFL Teams By 12%

Rob Walton’s purchase of the Denver Broncos will have a big impact on the values of the other 31 NFL teams.

Walton, a WalmartWMT
heir, has agreed to pay $4.65 billion, or 9.3 times estimated 2021 revenue. That’s 24% more than Forbes’ $3.75 billion valuation of the Broncos last August, when the average value of an NFL franchise was $3.5 billion.

But sports bankers say the proper way to estimate the impact of the Broncos deal on the value of the league’s other teams is to look at the next-highest bid to Walton’s, which was about $4 billion. Walton, say people with knowledge of the Broncos sale, offered $4.65 billion because he didn’t care to bother with a financial advisor and wanted a quick end to the bidding process.

You can do that when you’re worth over $50 billion. Steve Ballmer did pretty much the same thing with the Los Angeles Clippers in 2014 when he paid $2 billion—$500 million more than the next-highest bid for the NBA team.

An even better number to use in gauging the impact of the Broncos sale is $4.2 billion, which is about what Walton would’ve needed to pay to win the auction had he not wanted to “Ballmer” the deal. A $4.2 billion value works out to 8.4 times 2021 revenue and is 12% more than Forbes’ $3.75 billion valuation of the team last August.

Even with inflation running at over 8%, an across-the-board increase of 12% is nothing to sneeze at. It would put the value of the average NFL team at $3.9 billion—that is, unless the next sale of an NFL team is also “Ballmered.”

Or, to update the expression, “Waltoned.”