Professional sports have become a good business to invest money in, but this is not just for the top professional leagues in the country. There are minor league franchises in baseball and hockey as well as franchises in professional sports such as women's basketball, men and women's soccer and lacrosse to name a few. Although there are opportunities in sports franchise investing, there are many questions that need to be answered before you decide to invest your money. The following are a few services that a sports advisory provides to help you with these answers.
1. They can estimate the current worth of a team
Whether you plan on a majority ownership or are simply looking at a minority interest in a sports franchise, it can be difficult to put a value on the investment. This type of service can help to place an accurate value on the franchise in today's market.
2. They can develop economic forecasts for the franchise
Some of this may be due to growth or decline in the population, but often the popularity of a sport may be growing or declining. Local median income levels may be changing, and this will affect the local population's discretionary income.
3. They can develop various scenarios with a venue change
You may be wondering revenue projections for a change in venue. Depending on the sport, this may mean a change in stadiums or arenas. Different seating capacities can often mean more ticket sales. Or the current venue may be difficult to get to and have poor parking. In this situation, a more convenient venue may mean more ticket sales.
4. They can develop an economic forecast with a newly-built venue
Often there is talk of a franchise getting a new venue, accompanied by a sales pitch to new investors. It may be tempting as an investor to buy a minority stake when you think that a brand-new stadium or arena will mean more profits, but this is not always the case. An evaluation of revenues based upon various ticket prices needs to be done, as well as the likelihood of being able to charge those prices. A brand-new venue does not automatically mean that a team is a good investment.
Sports franchises cannot be analyzed with conventional tools for determining the value of a business. There are many factors involved, and those mentioned above only scratch the surface. If you are thinking about investing your money in a professional sports franchise, whether as a majority owner or holding a minority interest, you need to get the help of a sports advisory firm that specializes in this type of evaluation.