Category: Sports Business

Big Four Relocation and Expansion

One of my favorite sports topics is relocation and expansion in the Big Four Sports Leagues. In this post, I break down cities that should get new teams.

MLB

I think the MLB will soon expand from 30 to 32 teams. There are many teams vying for a new team. I think 5 new cities should get teams, with 2 expansions and 3 relocations.

I think the 3 relocations will need to happen before expansion. The first team that should relocate is the Tampa Bay Rays. Despite having decent success, the Rays have had terrible attendance, even for playoff games. With the new stadium project in the Tampa area collapsing and Tropicana Stadium having its roof ripped off, Tampa needs to leave soon.

I think it makes sense for them to move to Nashville. There is already a lot of momentum for a new team to go to Nashville and be called the Nashville Stars. There also is rumors that the new Tennessee Titans stadium complex will have room for a new MLB stadium which puts it in a great location. Nashville is a good sports town and the Rays moving there solves a current issue while also keeping allowing them to stay in the AL East (for now).

I also think the Chicago White Sox should relocate. They are having tons of issues with finding a new stadium and with current attendance issues. There is already another team in Chicago and they would be a prime candidate to move. I think Salt Lake City would be their best option. It isn’t as big as other potential expansion cities, but it already has 2 other sports teams and is a sports crazy town. They also have a big group trying to bring the team there and have a lot of momentum to bring a team there.

A potential wild card move I could see if the LA Angels moving to Portland. Portland is a big sports city/area without and MLB team. The Angels are second citizens in their town and could be due for a move.

The two expansion cities I see for the MLB are Charlotte and Austin/San Antonio. Charlotte would give the MLB access to the Carolinas market, which is a pretty big baseball area. Austin/San Antonio is a massive dual market they could get into.

* This is all assuming that the Oakland As do end up moving to Las Vegas.

Based on the moves above, here are the new divisions I imagine once 32 teams are in the league:

American League

AL East

Boston Red Sox

New York Yankees

Toronto Blue Jays

Baltimore Orioles

AL North

Minnesota Twins

Kansas City Royals

Detroit Tigers

Cleveland Guardians

AL South

New Austin/San Antonio Team

Houston Astros

Texas Rangers

Colorado Rockies

AL West

LA Angels/ New Portland Team

Las Vegas Athletics

Seattle Mariners

New Salt Lake City Team (formerly Chicago White Sox)

National League

NL East

Philadelphia Phillies

New York Mets

Washington Nationals

Pittsburgh Pirates

NL North

Chicago Cubs

St Louis Cardinals

Cincinnati Reds

Milwaukee Brewers

NL South

Miami Marlins

Atlanta Braves

Nashville Stars (formerly Tampa Bay Rays)

New Charlotte Team

NL West

Los Angeles Dodgers

Arizona Diamondbacks

San Francisco Giants

San Diego Padres

NBA

I think the NBA should expand to Seattle and Las Vegas. Both cities have arenas that a new team could move into and both are great sports towns. An NBA team would also give both cities four sports teams and solidify them as massive sports towns. The new NHL teams in both cities have done well and can serve as a blueprint for a new NBA team.

I also think the Memphis Grizzlies could move to Nashville. Nashville is a better sports town and the Predators have an arena they could move into pretty easily.

The Grizz could move into the Eastern Conference and the new Seattle and Vegas teams would join the Western Conference.

NHL

There are multiple NHL cities that could potentially lose teams like the San Jose Sharks or Buffalo Sabres. However, with the recent NHL expansion/relocation, there aren’t many places for these teams to go. Hockey is mainly a northern sport, so I don’t think expanding to a southern city is smart. Potentially, a Canadian city like Quebec City or a northern US City like Milwaukee or Portland could be on the list. I think for right now, the NHL will sit pat and see how the new expansion/relocation pans out before making any more moves.

NFL

I don’t think there is any chance the league expands anytime soon. The current structure of 32 teams works so well that there is no real benefit to adding new teams. And while there are teams that don’t fit in great to their current cities, I don’t see any leaving soon. The Jaguars would be the main team that might have left. But they recently announced plans to do a $1.4 billion renovation of their current stadium so they aren’t moving any time soon. And if they did, where would they go?

London is not a realistic option. The travel that a team would have to go through being based in London is absolutely brutal and I don’t think any player or coach would be a fan of that. Plus, being in a foreign country throws in the complications of taxes, foreign exchange, and politics further complicating things for a team based there.

Outside of that, there are potential US cities that could field an NFL team. However, none are such great options that any team is likely dying to move there. You do not hear much about NFL teams looking to relocate because most, if not all, are happy enough with their current situations

Private Equity Updates

The PE train keeps on rolling for the NFL.

Rumors are that the 49ers and Giants will be selling 10% of their teams and both will likely break the valuation record for an NFL team set by the Eagles in December. I’m guessing they will sell to private equity firms being that they are based in areas with close proximity to PE firms.

Another team that I am guessing may take private equity money soon is the Cincinnati Bengals. Why? They have one of the “poorest” owners in the league worth only $925 million dollars and the organization is notoriously cheap. They usually do not guarantee money for contracts outside of the first year (Joe Burrow being an exception). However, they have said that they want to resign Ja’Marr Chase, Tee Higgins, and Trey Hendrickson to big deals.

A quick detail about NFL contracts is that all guaranteed money is paid up front or put in escrow at the time the deal is signed. When Burrow signed a five-year, $275 million extension a couple years ago, the deal included a whopping $219 million in total guarantees. That means the Bengals owner needed $219 million in cash on hand per league rules. That is about 25% of his net worth. The team had to sign away naming rights to their stadium in order to finance the deal.

If the Bengals resign all 3 of the above guys, that could be another $150 to $200 million in cash needed and about $400 million just to those three and Burrow. Forbes did rank the Brown ownership family of having $3.9 billion total, so they could likely pitch in as a whole family to pay for it. However, if that doesn’t happen then the team will probably sell a stake to a PE firm for some instant cash.

CNBC ranked the Bengals as the least valuable franchise, but they are still worth $5.25 billion. Teams also tend to sell at valuations higher than their stated value, so the Brown family could likely get about $550 million for selling a 10% stake, which would go a long way towards helping pay for the contracts and keeping the Bengals core together.

Moving forward, outside of a team building a new stadium or completing renovations, I think teams that have to pay massive contracts are the next most likely candidates to take PE money.

NFL Private Equity

Similar to other leagues, the NFL has started to allow private equity firms to invest in their teams. I personally am not a fan of PE firms investing in teams that I care about because I think they have a short term view that is completely focused on making money, while a good owner has a long term view that is focused on winning.

The NFL has normally restricted PE firms from investing. However, they are dealing with the side effects of their own monumental success. Team values have ballooned in recent years and now it is extremely difficult to find one or a couple individuals wealthy enough to purchase an NFL team. PE firms have lots of money and are drooling to cash in on the NFL’s success.

Thankfully, the NFL has strict rules on PE firms investing, most notably that they cannot own more than 10% of a team and they get no governance rights in the team. One rule I do not support is that each fund or consortium will be able to do deals with up to six teams. This could present a strong conflict of interest. The time horizon is also very short as the minimum hold period for these funds will be six years.

Despite any reservations I or any other fans have, this probably is a necessity. The NFL is the last major US sports league to allow PE investing. The NBA, MLB, and NHL allow private equity ownership of up to 30%.

Something that also furthers the NFL’s need for PE investment is that teams often sell for much more than their estimated value. In August, the Eagles were valued by Forbes at $6.6 billion. However, according to the WSJ, in early December, the Eagles sold 8% of their franchise to two family investment groups, with one of those deals valuing the club at $8.3 billion.

WSJ also reported that Ares Management bought 10% of the Miami Dolphins in a deal that valued the organization at $8.1 billion, even though the Dolphins were valued at $6.2 billion by Forbes. The Bills also received a 10% investment from PE firm Arctos for an undisclosed amount.

The overpayments just raise the need for investments from outside money like PE firms. The NFL says these investments will be used for projects like building stadiums, which is good for fans and teams overall.

Best Sports Cities in the US

Below are the top 10 sports cities in the United States. Factors included how many Big Four teams each city had, the passion of the fanbases, the success of the teams, whether teams have recently left there, and whether teams in the city exist that no one cares about. Just because a city has a lot of teams does not automatically put it on here. Having no teams in a sport goes against you, but also having a team that no one cares about (i.e. the Angels in LA) hurts a city’s ranking.

Boston, MA

Titletown is an easy top choice. First off, Boston has the best sports fans in the entire world. All four sports teams in the city are heavily followed and cared about. No NFL team has won more Super Bowls than the Patriots and they boast the greatest football player and coach of all time. The Red Sox have the most famous stadium in all of American sports and have won more World Series this century than any other team. The Bruins are the oldest American team in the NHL and hockey in Massachusetts is massively popular. Last, but not least, no NBA team has won more championships than the Celtics. In addition to the great teams, Boston has had the best collection of athletes out of any city and Boston’s Sports Mount Rushmore of Tom Brady, Bill Russell, Ted Williams, and Bobby Orr is light years ahead of anyone else’s.

Chicago, IL

Chicago is a great sports town that has five franchises that are deeply cared about. The Bears are one of the oldest NFL teams. Despite not having a lot of success, they are a well-known and cared about team in the city. The Cubs play in the 2nd most famous stadium in American sports and have tons of history and great players. The White Sox are not as prestigious as the Cubs, but still have a loyal following. The Blackhawks are an Original Six NHL team and the had the only NHL dynasty this century. The Chicago Bulls are one of the best NBA teams of all time. They also had the greatest NBA player and maybe athlete of all time in Michael Jordan.

New York City, NY

The Giants are one of the best NFL franchises of all time and had the greatest defensive player ever in Lawrence Taylor. However, the Jets are an embarrassment that taints NYC’s football image. The Yankees are an all-time great sports franchise and the best franchise in MLB history. No other team boasts the championships and players that have come through the Bronx. Their logo has become a cultural symbol, which speaks to the success of the team. The Mets have struggled though and slightly bring down New York’s baseball rating. The Rangers are an Original Six team, the Islanders had one of the best dynasties in NHL history, and the Devils have also had success making the city’s hockey teams extremely impressive. Basketball is a different story as the Knicks and Nets are two of the most under performing franchises in any league. NYC also gets points for having Madison Square Garden, which is the most famous arena in the world. In terms of fans, people go to games, but a fair share don’t seem to be true fans and are mainly just there to have something to do.

Philadelphia, PA

As annoying and downright messed up as Philly fans can be, you have to concede that they love their teams as much as any other city does which boosts their score. The Eagles have a long history, some great players, and some recent success. The Phillies have a loyal following and are currently an exciting team. The 76ers are an all-time NBA franchise and have had many great players. The Flyers are one of the most legendary non-Original Six teams.

Detroit, MI

Detroit is extremely underrated as a sports city. The Lions have had iconic players like Barry Sanders, but not much success until lately. That being said, there were reports this year that Detroit’s drop in crime was due to the Lions being so good. The Red Wings are an Original Six team and one of the best teams in NHL history. The Pistons have had some all-time teams and the Tigers are one of the oldest teams in the MLB.

Denver, CO

It all starts with the Broncos in Denver. They have had the privilege of two of the greatest QBs of all time and their team has had a lot of success. The Avalanche have historically been good, and are currently filled with stars. The Nuggets are probably the best team in the NBA right now and have the best player in the league. The Rockies lag behind the rest of the teams, but having been to a game at Coors Field, it’s a pretty cool place to watch a game.

Pittsburgh, PA

The first city on this list without 4 major teams. The fact they made it, speaks to the success of their teams. The Steelers may be the most impressive NFL Franchise ever in terms of how much they’ve won and the legends that have put on the black and gold. The Penguins likewise have been super successful and have had some of the greatest NHL players ever. The Pirates also have a rich history and some all-time greats, even if they haven’t had the same recent success as the other two.

Dallas, TX

Not surprisingly, football carries this Texas city’s sports culture. The Cowboys are the most expensive sports franchise in the world (and it isn’t even close). They have had amazing players and tremendous success, despite underwhelming the past 30 years. The Mavericks are a popular team and like the Cowboys, are buoyed by an extremely famous owner. The Rangers just won their first World Series and appear on the come up. The Stars lack behind the others, but the fact a Texas city can support a hockey team and they get lots of people at their games is impressive in itself.

Washinton, D.C.

Had the Commanders not had an awkward last 5 years and a terrible owner who made the team a laughing stock, they may be higher. They still have had success in their history with three Super Bowls and people care about the team. The Capitals have a deep following, which has been aided by an all-time great player in Alexander Ovechkin. The Nats likewise are well liked and have had recent success. The team that lacks behind all the others is the Wizards, which is one of the worst franchises in the NBA.

Bay Area, CA

The Bay Area barley sneaks in because they have such large discrepancies between their teams. The 49ers are one of the most popular franchises in the NFL and have had many all-time greats. On the flip-side, the Raiders abandoned Oakland for Vegas. For baseball, there is a similar situation playing out. The Giants are a legendary team and have had a lot of recent success, but the Oakland A’s want to leave Oakland even though no one else wants them, creating an awkward situation for everyone. The Golden State Warriors dominated the NBA for a decade, forming the best dynasty since the 90s Bulls and are super popular. The Sharks are not very popular and bring the overall area down.

Most Liked Teams in Sports

This is an odd list to make as opposed to my list on most hated teams in sports. Most fans really only like the teams that they root for, and anyone outside of that is either irrelevant or hated. This list is the teams that fans of other organizations like for various reasons.

Army Black Knights Football and Navy Midshipmen Football (tie)

This one speaks for itself. The fact all the people on these teams are joining the military to fight for our country, makes them so easy to root for. The legendary game they play each year is also one of the best events in sports.

Buffalo Bills

They are loveable for two reasons: their fans and the fact they keep coming up short. You can make the argument that Bills fans are the best in all of sports. Despite the terrible upstate New York weather, they come out to games in full force. The lack of success in big moments also leads fans of other teams to feel for the Bills

Boston Red Sox

For years they were the loveable losers, bound by the Curse of the Bambino. They have shaken off that curse this century, but still have fans all over the country and are a well-liked team. Having the most iconic stadium in sports in Fenway Park helps their mystique.

Green Bay Packers

Despite being a super successful franchise, they are not hated at all. The combination of being from a small city, being owned by shareholders rather than a billionaire, and the iconic Lambeau Field make the Packers easy to like.

Chicago Cubs

They have a lot of the same traits as the Red Sox with having overcome a long drought and having a legendary stadium.

UConn Huskies Basketball

They are the anti blue blood college basketball program. Whereas other successful CBB teams have an air of superiority, they have been spectacular the past 25 years, but still feel like a blue collar program

Detroit Lions

This is a team that has long suffered from not achieving despite having great players like Calvin Johnson and Barry Sanders. They are a legendary franchise that’s easy to root for.

St. Louis Cardinals

An iconic franchise with some of the best jerseys in sports makes them easy to like. The backdrop of their stadium and the surrounding area is also awesome.

Oregon Ducks Football

This is mainly due to their connection with Nike. Oregon is known for having such cool uniforms and going against the traditional teams like Michigan and Alabama, and it’s super interesting.

Most Hated Teams in Sports

Being a hated team in sports gets more of a bad rap than it should. It’s better to be hated as a sports team than to be irrelevant and not talked about (think Los Angeles Angels or Atlanta Falcons). Below are the most hated teams in American sports:

Dallas Cowboys

They are the most popular team in the most popular sport in America, the highest valued sports franchise in the world, and the most hated team in sports. The Cowboys get talked about so much despite not having accomplished anything notable in the past 30 years. That’s an easy team for fans to hate.

New York Yankees

The evil empire. The championships. The pinstripes. The Yankees are an iconic franchise. People all over the world wear their hat to the point that their logo is more so a fashion statement and representation of New York City than just a sports team. Even though they have underwhelmed the past decade plus, they will forever be near the top of this list.

Duke Blue Devils Basketball

Much like the teams above them, no matter how good or bad Duke is any given year, their reputation automatically makes people hate them. An elite university and elite basketball program that wins so much is the perfect villain college basketball needs.

Alabama Crimson Tide Football

They are an absolute juggernaut of a program, having dominated college football the past 15 years. Even with Nick Saban leaving, this is a team that everyone will circle on their schedules and fans will live to see them be mediocre.

New England Patriots

The Pats went 4-13 last year, and not a single person outside of New England felt bad after they dominated the most competitive league in sports for two decades. The success they’ve had combined with some “cheating,” has made them one of the most hated teams in America.

Houston Astros

They are newer to this list than most of the other teams on it. The sign stealing scandal is still fresh in so many minds, that they will be hated for years to come.

Texas Longhorns Football

They suffer from a similar “curse” that the Cowboys do. Texas Football is such a big brand, despite not winning a national championship for almost 20 years and people can’t stand it.

Michigan Wolverines Football

Before this year, Michigan was similar to Texas in that they hadn’t won a title in a long time, but were still talked about so much. This year, their cheating scandal combined with their dominating season gives football fans more fire to fuel their hate.

Philadelphia Eagles

This is a rare one, where people mainly hate this team because of how terrible their fans are. Philly easily has the worst fans in sports and it’s on full display at Eagles games.

Kansas City Chiefs

The Chiefs are starting to suffer from what the Pats have, where their success is breeding hate. That combined with all of the complaining they do every time the refs don’t bend the rules in their favor, makes them easy to hate.