Thursday, July 10, 2008

How much are the Steelers worth anyway?

Quite a lot of emotional angst over the potential sale of the Steelers and the eventual role of the Rooneys. Who knew there were so many Rooneys in the greater Steelerverse? For more on the alter-ego horse racing empire of the Steeler clan take a read of: A steely eye for the ponies which was in the Albany Times Union last year.

So how much are the Steelers worth? I guess we will find out soon. Sort of a core maxim of economics is that something is worth what the market says it is. If there is some open bidding for the team, or parts of it, we may see what the market price really is.

But Forbes regularly values professional sports teams. When they last figured the value of the franchise it was $929 million in 2007. The Forbes valuation has gone up every year and was just $300 million in 1998 which works out to be a healthy 13.4% annual appreciation. If that trend were to continue it would put the Steelers value at just over a billion dollars right around now. As the Rooney family appears to be struggling with, thats a lot, but it is not necessarily the most liquid billion dollars out there.

Today the Wall Street Journal has a pessimistic look at the finances of the Steelers in: Behind the Steel Curtain, a Rusty Bucket: Pittsburgh Franchise Wanes As Rooneys Angle for Profit and Control; Outside Bidders Loom. That article imputes a value of $700 million for the team based on numbers being offered among the Rooney clan, but I don't think anyone really knows what outside bids could bring just yet. Sounds like the likely suitor, billionaire Stanley Druckenmiller is a rabid Steelers fan which could mean there is an emotional premia for the team as well. A the same time the WSJ article highlights a number of financial pressures on the team's bottom line that could hurt its valuation as well.

With the French buying Yellow Cab and the Spanish buying Kennywood, I wonder if there are some Dubai sheiks who might wind up on the short list of suitors for the Steelers?


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