The funny thing about billionaires is that they’ll show you what their money buys, but some can be a little fuzzy about where the money comes from. Jerry Jones and Robert Kraft just learned they’ll have to open their books, which could give sports fans fascinating insight into the Dallas Cowboys and New England Patriots, each a license to print money.
If the details of their teams’ finances become public, those owners and others figure to face a whole lot of skepticism the next time they raise ticket prices or the cost of parking a car at NFL stadiums.
They all have Stan Kroenke to thank.
Leaving St. Louis is haunting the Los Angeles Rams
A Circuit Court judge in St. Louis ruled Monday that the NFL and multiple team owners will have to open their books over a battle that began when Kroenke moved his Rams to Los Angeles for the 2016 season.
Judge Christopher McGraugh gave the plaintiffs 10 days to submit arguments as to why additional financial information about teams, owners, and executives beyond the likes of the Cowboys’ Jones and the Patriots’ Kraft should also be subject to disclosure. The plaintiffs – the city of St. Louis, St. Louis County, and the St. Louis Regional Convention and Sports Complex Authority – are seeking ammunition for a trial that is scheduled to begin in January.
According to St. Louis Today, the lawsuit dating to 2017 alleges that the NFL disregarded its own relocation rules by allowing Kroenke to move the Rams to California, costing St. Louis millions in annual tax revenue.
Jerry Jones and Robert Kraft received the same bad news
The agencies suing the LA Rams for leaving St. Louis are on the verge of obtaining a treasure trove of financial information. The Circuit Court judge’s ruling said the plaintiffs showed sufficient cause to seek financial records from the league, Kroenke, Jones (Cowboys), Kraft (Patriots), Clark Hunt (Kansas City Chiefs), John Mara (New York Giants), and Jerry Richardson (former owner of the Carolina Panthers).
None of the financial data would appear to have any bearing on the central issue of the civil trial – that the Rams should not have left town – beginning in January. However, the plaintiffs could use it to demonstrate the cost of losing the team. If the plaintiffs beat the Rams in court, the numbers will help determine the damages award.
Media outlets like Fortune and Forbes routinely report estimates of teams’ revenue and worth, but they do so without access to the books. Whatever is revealed in court will be a data bonanza for them and an eye-opener for football fans.
Football teams are insanely valuable
Forbes has compiled annual valuations of NFL teams for more than two decades. The September 2020 report valued Jones’ Cowboys at a league-best $5.7 billion. Kraft’s Patriots were next at $4.4 billion. The Giants, owned by Steven Tisch and John Mara, came in next at $4.3 billion.
The reason those franchises are relevant in the lawsuits in the Rams came in fourth at $4 billion.
Those raw numbers are eye-catching, but they require context in order to fully appreciate the reason NFL teams are a great investment if you have a few spare billions laying around. Namely, it’s stunning to see how profitable the teams can be on an annual basis.
The website estimated that the Cowboys generated $425 million in operating income for the 2019 business year, the last pre-pandemic season. The estimates for the Patriots ($250 million), Giants ($168 million), and Rams ($78 million) were smaller but still substantial.
Without breaking the numbers down by team, Forbes stated the average franchise posted $477 million in revenue that translated into $109 million of operating income.
Again, those are just estimates. The plaintiffs in the lawsuit are on the verge of obtaining actual data that owners understandably would prefer to keep private.