We talk a lot about value of things here (shoutout to VballRetired), but what about the real “value” of the Houston Texans?
One of the best investments you could have made in the last 30 years or so, if blessed with the wealth and/or capital to do so, would’ve been the ownership of a professional sports franchise. In particular, if you got in on the ground floor of buying majority stake in a NFL franchise, the returns today might set your family up for generations. Nowadays, financial investments that can turn high single-digit to double digit returns on investment are seen as good money moves. Looking at the values of NFL franchises over the past couple of decades, you are talking about returns in the realm of five or tenfold. Granted, there are only 32 of them like the Houston Texans and it can be rather expensive to get in on that action, but for those lucky enough to do so, the returns have no parallel.
One just needs to look at the annual franchise valuation lists that come out every year to rank the most valuable of NFL franchises. Usually, other professional sporting organizations get thrown in, but save some of the biggest European football/soccer leagues, the most valuable of franchises tend to be those from the NFL. On the recent Sportico list, the lowest valued franchise would be the Cincinnati Bengals, who checked in at the low, low price of $4.71B in value. At the top of the list, to probably no one’s surprise would be the Dallas/Arlington Cowboys, whose value clocks in at $10.32B. Given that Jerry ”Jerruh” Jones purchased the Cowboys for a mere $140M back in 1989, the return on investment (ROI) is, even factoring inflation…uh, yeah…A LOT. Sportico’s projections show Dallas as the first sporting franchise whose value crossed into the 10-figure realm.
As for the Houston Texans, they checked in at #12 on the list, at a more value-priced level of $6.01B. Given their initial start-up investment checked in at ~$700M in 1998 dollars, this to rates as a very enviable ROI. The massive TV contracts the NFL draws does much to pump up the value for these organizations. Stadium deals, tax breaks, merchandising, concessions and the like also bring in the Benjamins. Granted, franchise value does not always correlate into on-field success. The dominant team in the NFL (Kansas City Chiefs), is valued 18th at around $5.4B. Some of the teams in the top 10 list for value, like the New York Jets, Las Vegas Raiders and Washington Commanders, have little to show in the way of on-field success. Still, five of the teams in the top ten (Dallas Cowboys, Los Angeles Rams, San Francisco 49ers, Miami Dolphins, Philadelphia Eagles) did make the playoffs last season. The New York Giants were in the year before, and the New England Patriots are not that far removed from the dynastic run. Location in big media markets will certainly help, but on-field success can also benefit the bottom line.
What does all of this mean in the grand scheme of things? Other than being a pipe dream for us mortals to own a team, it does show just how much money we put into sports teams. Aside from the sports fan vanity of owning a NFL team, they can offer a major financial windfall to their owners when bought and sold. One only need look at the Washington Commanders, who suffered 20+ years of poor ownership/mismanagement by Dan Snyder. Yet, Snyder pocketed a near sixfold ROI when he sold the team for over $6B last year (minus a meager $60M fine from the NFL on the way out). While Cal McNair certainly had his missteps as owner, he is nowhere near the level of Snyder. With Houston a top-10 media market and his current iteration of the team slated to bring in more eyeballs and money, the value of the franchise might just start climbing up. Likely not ever to overcome the Cowboys in overall franchise value, even if Cal/Hannah get the city to build a new stadium (which is not even in talks/consideration), the Texans still rate among the more valuable of NFL franchises.