Estimating the value of a sports franchise is as much art as science. Despite the common perception that there is a known “value” for professional sports franchises, the market value is rarely observed.
Anderson Economic Group has developed methods of estimating the value of businesses that takes into account the unique characteristics of such businesses, such as the importance of the brand, the sales or market territory, and other factors. We have applied this methodology in industries such as automotive retail, rental car agencies, general retailers, beer & wine wholesalers, and sports franchises. Recently, we reviewed the particular valuation challenge posed by professional sports franchises, and analyzed data on publicly traded firms in the US and Europe.
This paper applies our methods and experience in order to estimate the value of the Chicago Cubs Franchise.