Determinants of Franchise Values in North American Professional Sports Leagues: Evidence from a Hedonic Price Model, pp. 98-105
Professional sports teams in North America are privately held corporations. Consequently, they are not required to make audited financial statements publicly available. We use a hedonic price model to analyze transaction prices for professional sports teams from 1969 to 2006. Results indicate that franchise age, facility ownership, number of local competitors, and metropolitan population all have significant hedonic prices. A quality-adjusted price index based on these results indicates the average annual increase in prices over the period exceeded 15%. Long-term sports team owners have experienced significant capital appreciation over the past 40 years, an outcome inconsistent with operating losses.