In a increasingly competitive professional sports market, Mercer Capital’s team capabilities in valuation, intangible assets, stadium issues and legal consulting are unsurpassed. We have the depth of knowledge necessary to assist in developing industry best practices.

This knowledge relates not only to the underlying economics to the sports business, which include its escalating cost structure, but most importantly, the future revenue-enhancing aspects of sports that are the key to future success. We have the capability to coordinate and help provide a complete package of services.

Industry Services

  • Valuations (M&A oriented, tax driven, shareholder buyouts, and litigation)
  • Fairness Opinions
  • Buy Side Planning
  • Due diligence services
  • Stadium lease consulting – new and existing
  • Legal transaction consulting
  • Tax Advisory

This knowledge base has been built from the continuing services, engagements and relationships that our team’s principals have participated in over the years.

Sports Franchise Valuation Process

When considering the value of a major pro sports franchise, the buyer(s) and seller(s) will consider, among other things, the outlook for the league, the economics of the team, local economics, national revenue streams, player contract rights, the inclusion of other non-team related assets (such as stadium rights, media rights, real estate, etc.), and the valuation of the relative assets. In this case it would include the following:

  • Understanding and consideration of assets being sold
  • Consideration and collaboration on various strategic options including:
    • Due diligence, research and risk analysis of various existing and potential revenue streams
    • Valuation impact of current and potential future media rights
    • Cost structure including current player contract terms and expense profile
    • Optionality evaluation of potential future impact of current or potential new stadium deal with the a state government agency
    • Potential tax issues related to a buyer
    • Forecasting and modeling of various scenarios
  • Consideration and research of recent franchise transactions
  • Valuation of team and stadium interests.

Team Economics and Forecasting

Our experience and in-depth knowledge of all four pro leagues, their structure and the actual financial performance of many teams enables us to:

  • Perform meaningful revenue and cost analysis
  • Understand the merits of the subject asset against real benchmarks (as opposed to the sometimes unreliable data in the public domain)
  • Develop realistic projections for better decision making

Stadium Optionality

Our team’s specialized knowledge base make us the most capable to evaluate the various structuring and economic scenarios associated with the team’s potential new stadium scenarios. We envision efforts to include:

  • Developing a range of economic scenarios and the benefits that would accrue to a new owner under those scenarios
  • Utilizing recent transaction and negotiation experience with current owners, third parties and government agencies to develop a probability and time weighted optionality factor to apply to the expected benefits
  • Employing real option theory to estimate a range of incremental bid pricing for a potential new stadium deal

Qualifications

  • We have arguably the most expertise in sports valuation and related stadium advisory in the country and have considerable interaction and experience with management of the various leagues
  • We bring value, background, and expertise that few, if any have
  • Highly researched projections and pricing scenarios
  • We know what teams and stadiums are capable of and what that means to an owner

Contact a Mercer Capital professional to discuss your needs in confidence.