Wall Street woes crash Colts' value

September 16, 2008
Back to TopCommentsE-mailPrintBookmark and Share
wallstreetThe crash on Wall Street yesterday reverberated right through the Indianapolis Colts’ 56th Street headquarters. How on earth are a stock market decline and the National Football League related? Here’s how.

Forbes magazine last week released figures showing 19 of the 32 NFL teams’ values surpassed $1 billion. Only five teams’ surpassed $1 billion just a year ago. This should be enough to make NFL owners as giddy as Jessica Simpson after a Tony Romo touchdown. The Colts, playing their first year in a new stadium, were among the biggest gainers, with a $1.08 billion valuation, good for eighth in the 32-team league.

But yesterday’s devastating day on Wall Street shed a more realistic light on things. Bear Stearns is history. Lehman Brothers is probably next. Merrill Lynch also has big problems. The credit markets have been hit like a quarterback with a rookie-laden line of scrimmage, and the U.S. dollar is weaker than the Colts run defense.

Much of this nation’s wealth is tied up in the stock market, which means North America—the only market for an NFL franchise—just isn’t as stocked with billionaires as it once was.

Supply and demand principals would dictate that there’s no way the Colts fetch $1.08 billion on the open market no matter how spiffy Lucas Oil Stadium is. Want proof? Forbes valued the Pittsburgh Steelers at $1.01 billion. It’s no secret the team is on the market, and the high bidder, Stanley Druckenmiller, is offering $800 million. Forbes concluded the St. Louis Rams carry a $929 million valuation. The team is getting little to no interest at an $850 million asking price.

Today, a more realistic value of the Colts is $825 million. Who knows, if they get parking issues and the acoustics straightened out at the new stadium, the team might go for $840 million.
  • Value and Selling Price are not necessarily the same thing. Valuation is a whole series of numbers, characteristics, market, formulas, etc... while Selling Price is just the flat out price paid to purchase.

    Of course Market Conditions impact all teams, but the Forbes annual study reflects the NFL contracts, the general direction of franchise prices, and specific team conditions.

    Also, I really question just how much a local reporter knows about the behind-the-scenes deal numbers being floated for say the Rams, Bills, Jags, Saints, etc... The LA situation makes the situation a little more complex. Finance money is a bit harder to come by today than it was just a few months or years ago. Plus the number of teams on The LA List does make just a handful of potential buyers dilute over a number of potential teams.

    But the overall point is TEAM VALUE and SELLING PRICE are not the same thing. Look at the housing market for a quick example. APPRAISED VALUE and actual SELLING PRICE just aren't the same. Give it a few years and I guarantee most NFL franchises will be hovering around that 1 Billion dollar mark. Plus, wait until the next NFL/TV deal and you will see that value surpassed and then some.
  • Agree, this articles analysis boils down to there's perhaps fewer billionaries. Not a very rigorous examination of valuation.
  • Value and Selling Price are not necessarily the same thing.

    The key is are not necessarily the same thing. But as you bankers know, value and selling price can be -- and in fact -- often are the same thing. And dare I say that history teaches lessons, but does not guarantee the future. To guarantee that most NFL teams will be hovering around $1 billion valuation in a few years is pretty audacious.
  • what a p*ss poor article.
  • Look who wrote this article.....does it surprise you?

    I think I can make a similar argument. This article stinks, which is a part of the IBJ, so that means the IBJ will have fewer readers and is worth less because of this worthless article.
  • IndyCarIU,

    No, the IBJ is fine and actually probably the best local business publication I can think off, however, in terms of Sports Reporting, the IBJ as expected is quite Bush League to steal a sports term.
  • This was kind of a throw away article. The Assessors say my house is worth X. But I guarantee you that I won't get X in this real estate market. All part of life.
  • But I assure you your taxes will be based on the assessors' opinion.

Post a comment to this blog

We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
You are legally responsible for what you post and your anonymity is not guaranteed.
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
  1. I am a Lyft driver who is a licensed CDL professional driver. ALL Lyft drivers take pride in providing quality service to the Indianapolis and surrounding areas, and we take the safety of our passengers and the public seriously.(passengers are required to put seat belts on when they get in our cars) We do go through background checks, driving records are checked as are the personal cars we drive, (these are OUR private cars we use) Unlike taxi cabs and their drivers Lyft (and yes Uber) provide passengers with a clean car inside and out, a friendly and courteous driver, and who is dressed appropriately and is groomed appropriately. I go so far as to offer mints, candy and/or small bottle of water to the my customers. It's a mutual respect between driver and passenger. With Best Regards

  2. to be the big fish in the little pond of IRL midwest racin' when yer up against Racin' Gardner

  3. In the first sentance "As a resident of one of these new Carmel Apartments the issue the local governments need to discuss are build quality & price." need a way to edit

  4. As a resident of one of these new Carmel Apartments the issue the local governments need to discuss is build quality & price. First none of these places is worth $1100 for a one bedroom. Downtown Carmel or Keystone at the Crossing in Indy. It doesn't matter. All require you to get in your car to get just about anywhere you need to go. I'm in one of the Carmel apartments now where after just 2.5 short years one of the kitchen cabinet doors is crooked and lawn and property maintenance seems to be lacking my old Indianapolis apartment which cost $300 less. This is one of the new star apartments. As they keep building throughout the area "deals" will start popping up creating shoppers. If your property is falling apart after year 3 what will it look like after year 5 or 10??? Why would one stay here if they could move to a new Broad Ripple in 2 to 3 years or another part of the Far Northside?? The complexes aren't going to let the "poor" move in without local permission so that's not that problem, but it the occupancy rate drops suddenly because the "Young" people moved back to Indy then look out.

  5. Why are you so concerned about Ace hardware? I don't understand why anyone goes there! Every time ive gone in the past, they don't have what I need and I end up going to the big box stores. I understand the service aspect and that they try to be helpful but if they are going to survive I think they might need to carry more specialty parts.