EconomicCorner013

[richardmurray]

Economic Corner - what is the truth of investment in the sport industry in the usa?
Key points 
One hundred and fifty million is the most recent value of starting a WNBA franchise , fifty million initially and then one hundred million through promised infrastructure plans.
The WNBA franchise in Chicago was started for five million dollars, in Oprah Winfrey's beloved town, by a white man who had less money than Oprah, and was absent any promises of future investment.  
No major league, major league defined as a team determined the primary athletic tier,  from the NFL to the National Women's Hockey League has a black owner. For example, baseball has a black owner in the minor leagues of baseball. 
Opportunities to invest in the sporting world in the usa and become the owner to a franchise exist that are affordable. The Black populace in the usa through individuals or group of individuals have the annual revenue or saved wealth to make the investments.
Now some restrictions, most sport organizations in the usa, demand owners be single individuals. There are cases of ownership groups but they are not common. Sometimes investment firms or corporations are allowed to own a team, like RedBull  owns RedBull NY but the process of a large set of individuals to become a corporation and then to own a team is a longer process time wise, and in that time will challenge the devotion of the members. 
So based on womens sport leagues financial growth, black individuals of the highest financial caste have already missed out on financial growth of circa ninety six percent. That is financial failure. 
*
Why aren't the Black wealthy, the black one percent, investing in sport to become owners of franchises in the usa? 
What is the truth of investment in the sport industry in the usa? 
*
If an opportunity to invest to become an owner exist, if you have the money to make the investment safely, then the question is why don't you ? 
Only five answers exist, and I will list them first. 
They aren't investing because:
1.they don't know the opportunity exist
2.they know the opportunity exist and want to but can't do it alone
3.they know the opportunity exist and want to but can't get a group
4.they know the opportunity exist and don't want to because they are interested in investing in other fields
5.they know the opportunity exist and don't want to because they are interested in investing in the sporting field but want a safer investment
*
All are possible. 
1.I know of blacks who don't like sports for various reasons so I can believe some don't know , they have such a dislike of sport that the thought is away from them. 
2.Five million is a lot of money and the average Black millionaire in the usa can't risk five million dollars. so I can see many can't do it alone. And adding the modern heritage, a lack of communalism in the black populace in the usa, reaching out to a financially wealthy black stranger does not seem common. 
4. I know of a black former nba player who owns a tech firm another who owns a car dealership network. So, just because a black person is involved in sport doesn't mean they want to invest in sport and that is fine. Again, it is called free market capitalism for a reason. It isn't slave market capitalism. You are free to invest how or where you want, that is the point. 
5. I don't have private financial data to the black wealthy, one million or more saved or earned,  in the usa. But, from white owned media, most black sports investment is as shareholders, not majority owners. So based on advertising, most black wealthy seem convinced in safer bets in the sporting world. I will rephrase, black wealthy like hedging their bets where white wealthy can cover for them. The positive angle is Lebron James for example. He invested in one percent of Liverpool football club. Now, the investment group from boston that owns the red sox and bought Liverpool is looking to sell. Upon the sale, Lebron can cash in and earn more than he put in or keep it in and ride the growth for longer. I can think of many shareholder investments in sport by the Black wealthy. Looking to sell is a common tactic in modern sport, buy and wait for a few years and then sell where you cash in or keep your money in and have it grow. After a sale to some buyer somewhere for more money who has a similar plan, to sell after a set of years,  or isn't looking to sell and has a non financial agenda. I have seen this with some WNBA teams with ownership groups who never want to sell the club , just want it is a long term investment to leave to the next generation it seems.  The negative angle is the preaching from black millionaires or better to the black financial poor or common in the usa concerning becoming investors  when black millionaires or better are not willing to invest? If Black financial speakers don't complain about black wealthy evading ownership and becoming shareholders, then said black financial speakers need to not speak on black poor or non wealthy not willing to risk their pennies. The bigger issue is, if you don't own , you don't control. Minority investment, minority shareholding , is a great way to make money off of others risk but a terrible way to control things, cause you can't control any firm unless you are a majority shareholder or owner. 
3. you may have noticed I put this last. The one thing I rarely hear, i did hear about Tony Parker with a set of other athletes investing as a group into Olympique Lyonnais, is group investments in sport. 
I remember when Isiah Thomas owned the remade CBA, and I wondered who else invested with him. I never found out but I do wonder about many black wealthy people and their collaborative abilities with other blacks. I can believe Oprah Winfrey can't make a group to easily cause it is public knowledge she has many who don't like her in the black one percent. But it is clear the Black one percent need more internal interlinking. 
URL
https://www.thestar.com/business/edward-rogers-argued-against-a-toronto-wnba-franchise-but-tanenbaum-went-ahead-and-got-one/article_dde69db8-1dea-11ef-8828-3fa01376cfbd.html

Edward Rogers argued against a Toronto WNBA franchise — but Tanenbaum went ahead and got one. Who was right?
Fifteen years after being denied a Toronto women’s team by the NBA, economic experts say Kilmer Sports Ventures’ $50 million purchase of a WNBA franchise will likely be a slam dunk. 
Updated Dec. 12, 2024 at 1:47 p.m.
May 31, 2024
By Josh RubinBusiness Reporter
What did Larry Tanenbaum see in a WNBA franchise that Edward Rogers didn’t? 

Plenty, say sports business experts and women’s sports advocates, who argue the franchise granted to the Toronto businessman and sports industry investor will be a big success — at least off the court.

“I think it’s going to be a success. I think the franchise is going to be worth $100 million, $150 million in the next few years, pick a number,” said long-time sports industry executive Richard Peddie.

Tanenbaum, through his firm Kilmer Sports Ventures, was recently awarded an expansion franchise in the premier women’s pro basketball league in exchange for a franchise fee of $50 million (U.S.). As part of the deal with the league, Kilmer also agreed to other financial commitments — including renovations and building a practice facility — which a league source says brings the total value of the deal to $150 million (U.S.).

More than fifteen years ago, when he was CEO of Maple Leaf Sports & Entertainment, Peddie was a big proponent of the organization’s push to get a WNBA franchise. He and Tanenbaum — who still owns a chunk of MLSE — were shot down by then-NBA commissioner David Stern.

Tanenbaum, said Peddie, never really gave up his hope of a team. That vision clearly wasn’t shared by Edward Rogers and Tony Staffieri, the chair and CEO, respectively of Rogers Communications, one of MLSE’s parent companies, along with BCE Inc. and Kilmer.

As reported by the Star, Rogers and Staffieri argued against MLSE bidding for a WNBA team, despite an internal MLSE business case which projected the team would eventually become profitable.

Expansion franchises in any league can have a shaky few years when they start. But there’s already ample precedent in Toronto for a new team proving to be a good investment, said Peddie.

“You think about Toronto FC. There were people who thought us buying Toronto FC for $10 million was crazy, was the stupidest idea going. Now, some people would say it’s worth $700 million. That’s where Larry’s coming from,” said Peddie. “When we bought Toronto FC, we weren’t projecting it to make any money right off the bat. But we were amazingly profitable in the first couple of years.” 

Victor Matheson, a professor of economics at College of the Holy Cross in Massachusetts who specializes in the economic impact of the sports industry, says there are plenty of reasons to expect Toronto’s WNBA team will be a financial success, including the precedent set by the NBA’s Raptors.

“Toronto certainly has a chance to be a good market for the WNBA. The reason we know this is that obviously it’s been a great market for the NBA — a lot of success with the Raptors,” said Matheson, who added that Toronto also has a track record of supporting high-level women’s sports. “The Canadian women’s soccer team has done fantastically. And there was just a spectacular inaugural season in the PWHL.”

So why wouldn’t those factors be obvious to other potential investors in addition to Tanenbaum? A failure of imagination, said Matheson.

“I think what a lot of owners and broadcasters have lacked is the imagination to realize what a hit women’s sports can be,” said Matheson. “They say ‘well, why should we even try to ask for a lot of money for TV rights, or why should even think about paying a bunch of money for TV rights. I can’t imagine anyone going and watching these games,’ so they don’t even try.”

Having the star power of rookie Indiana Fever point guard Caitlin Clark in the WNBA is helping everyone from sponsors, teams and the league itself get that spark of imagination, Matheson said. The season-opening game of the WNBA’s Connecticut Sun against Clark’s Fever was a sellout, with more than 9,000 fans, the team’s highest attendance in 20 years.

“They weren’t just paying the $10-$15 WNBA price, but scalping tickets for $50 or $100 apiece. As soon as people see things like that, they can start to imagine that ‘hey, this is something that really could work,’” said Matheson.

The fact that big-time sports investment has traditionally been male-dominated has also played a role in the failure of imagination, says Allison Sandmeyer- Graves, CEO of Canadian Women and Sport, an advocacy organization.

“It’s a safe bet that was a factor,” said Sandmeyer-Graves. “When you start from a place of not respecting women’s sports, it’s really hard to see the value in it.”

Recent surveys done for CWS, said Sandmeyer-Graves, give plenty of cause for optimism that Toronto’s as-yet unnamed team will be a financial success. Sandmeyer-Graves pointed to results which found that 17 million Canadians called themselves fans of women’s sports. And the gender breakdown wasn’t what some people might have assumed.

“What was really cool in the research we just released was to see actually, fans of women’s sports are almost 50-50 men and women, and it’s even a little bit higher for men,” said Sandmeyer-Graves.

And, she added, the surveys were done before the inaugural season of the Professional Women’s Hockey League, which has a franchise in Toronto.

“So it’s not just the novelty of the first season of this new league, said Sandmeyer-Graves. “There’s latent demand in Canada for women’s sports that hasn’t been fully met.” 

Still, there will inevitably be bumps in the road, just like there are with any start-up franchise. Detractors, she argued, won’t be playing fair if they use those bumps to try and shoot down the team’s long-term prospects.

“I think we need to give this team the same grace and patience that we have given to other teams in the past. So often, when it’s not a success straight out of the gate, it’s seen as just more evidence that women’s sports just aren’t successful,” said Sandmeyer-Graves, adding that Tanenbaum seems like a patient investor who’s in it for the long haul.

“I’m not saying MLSE wouldn’t have been the right fit, but clearly, they didn’t feel like they were the right fit. … Where it goes in five years, we’ll see. But it seems like they’re starting off on the right foot.”

Josh Rubin is a Toronto-based business reporter. Follow him on Twitter: @starbeer.

Prior Economic Corner: https://aalbc.com/tc/topic/11475-economiccorner012/

 

IN AMENDMENT

What is annual average cost [players/stadium/staff/utilities] of the least costly to operate professional, meaning paid athlete, sport team in the city you live in?

The following is content in normal weight font unverified . I did a general search, "average yearly cost of LEAGUE NAME team"

New York City has all the major leagues and many minor. 

The cheapest team is a Premier Women's Hockey Alliance or Roller Derby, the womens football alliance team in nyc folded. Now, white people say Washington DC/Atlanta/Charlotte are the three cities with the most black millionaires. Jackson Missisippi is the only city in the usa with over eighty percent black population. But NYC has a larger population of black people than any city in the usa by a distance. So the question is are any of the sports franchises with the lowest annual cost cheap enough for a black multimillionaire in new york city to risk? i argue yes, but to each their own.

 

WNBA

The average yearly cost of an WNBA team is estimated to be around $13.2 million1. The average team is worth an estimated $96 million

Premiere Lacross Leauge

The average yearly cost of a Premier Lacrosse League team is estimated to be around $10 million1. The revenue per employee for Premier Lacrosse League is $203.2K2. The company operates in the Spectator Sports industry3.

Premier Womens Hockey League

The average yearly cost of a PWHL team is around $56,500 USD2. The league requires each team to average between $45,900 and $60,500 per contract in lieu of a salary cap1. The minimum salary for PWHL players is currently $35,000

USL League 2 team 

The average yearly cost of owning and running a USL League 2 team ranges from $600K to $1M2. The initial franchise fee to buy into a USL 2 franchise is $75,000, which can be split into payments of ~$25K each year for three years3. Expansion fees in the USL Championship are $12 million in 20205.

Womens Football Alliance- the gridiron

The average yearly cost of a Women's Football Alliance (WFA) team is estimated to be around $20,0001. This budget covers expenses such as field rental, equipment, uniforms, videography, web hosting, and some travel. If teams participate in the playoffs, the cost can be higher2.

Frontier league baseball team

The average yearly cost of a Frontier League baseball team is around $75,000, with a salary cap of $72,000 per team125. Most players earn between $1,000 and $2,000 a month during the summer2. The highest paid players can earn up to $4,000 a month2.

Major  league cricket

The average yearly cost of a Major League Cricket (MLC) team is estimated to be slightly above $1.1 million2. The salary cap per team is $1,150,000, of which $320,000 is spent on American players

Overwatch league

The average yearly cost of an Overwatch League team is approximately $1 million14. Team owners bought into the Overwatch League for $20 million per slot ahead of its launch in 20183. The average annual pay for an Overwatch League player in the United States is $121,7652.

Roller Derby

Travel costs: Gotham Girls Roller Derby $58,260 Gotham paid out 23,051 in 2011. Not sure where you got the other number from.

 

Websites that state cities with the large numbers of black millionaires

 

https://propertyclub.nyc/article/richest-black-neighborhoods-in-america#:~:text=Washington D.C. has the most Black millionaires in,of government and military jobs in the area.

 

https://blackelites.com/top-cities-in-the-u-s-with-the-highest-number-of-black-millionaires/

 

[ProfD]

Despite that a huge portion of Black wealth comes from entertainment (sports and music), the only thing I can gather at this point is that Black folks aren't too interested in owning a sports franchise or  starting our own leagues.

[richardmurray]

@ProfD

4 hours ago, ProfD said:

Despite that a huge portion of Black wealth comes from entertainment (sports and music), the only thing I can gather at this poimt is that Black folks aren't too interested in owning a sports franchise or  starting our own leagues.

 

I have to apologize I forgot to mention two things. 

First, in the sport of soccer the way it is designed globally, you have FIFA the global body, then under fifa are confederations, which are something like continents, and in confederations you have football associations which are like countries. Black ownership in soccer teams in black countries is very very high. Jamaica/Haiti[yes even fiscally poor haiti]/nigeria/south africa/ethiopia all countries with a majority black populace with a decent size, not city states or very tiny countries like a cape verde or similar have many football clubs 99% black owned. so, black owned sports leagues or clubs are common in the world, in the larger humanity, essentially in majority black countries. 

 

Second , I forgot all about the Big 3 league I think Ice Cube owns it, I am certain he has black partners, though definitely white partners. It is the premier, 3 on 3 so it is a major league. I admittedly forgot. it isn't widely advertised but i know it has grown. 

 

So black people in the usa aren't interested, but it isn't a global problem. as I say in sports groups online, black people complain about owning sports teams in white countries but we own a lot of sports stuff in black countries. 

 

Making a bridge, since Black DOSers in the usa with money seem in love with investing in white owned sports team in the usa or elsewhere, considering black owned sports teams exist in black countires, they need to be convinced to making an investment in a black owned team/league outside the usa. I say South Africa is the best candidate. 

First, the safest legal environment cause wealthy black DOSers are the most risk averse. 

Second, not the most financial potential but in the top ten, arguably others have more but I can say top ten by some angles over all.

Third, english speaking, so communication isn't a problem

 

I end with the black populace in the usa is becoming a hyrbid of DOS with Modern Immigrant which in twenty years will yield a definitive comfort with the black populace outside the usa more than in the past which will change financial habits so...

 

[ProfD]

5 hours ago, richardmurray said:

...so, black owned sports leagues or clubs are common in the world, in the larger humanity, essentially in majority black countries. 

Makes sense for Black folks to be majority owners especially in their home countries.

 

5 hours ago, richardmurray said:

Second , I forgot all about the Big 3 league...

Yep. The Big 3 is Ice Cubes venture. 

 

5 hours ago, richardmurray said:

Making a bridge, since Black DOSers in the usa with money seem in love with investing in white owned sports team in the usa or elsewhere...

Black DOSers best chance of making a ton of money is here in the US because it is homeland to many of us. 

 

The main thing is putting an investment group together capable of buying a franchise when it becomes available and/or building  our own sports lesgues.

 

I believe the US is heading in a direction that will force Black folks to make investments in their own infrastructure out of necessity.

[richardmurray]

@ProfD

10 minutes ago, ProfD said:

I believe the US is heading in a direction that will force black folks to make investments in their own infrastructure out of necessity.

definitely possible amongst other things