BUFFALO, N.Y. (WKBW) — Are you looking to buy an NHL franchise? Well, the cost of getting in is going up.
According to a new analysis from sports publication Sportico, the value of an average NHL franchise has jumped to $1.31 Billion over the last year. That's an increase of 29%.
"I think there's a little bit of a catchup with the NHL going on," Kurt Badenhousen, Sports Business Reporter for Sportico, tells 7 News.
"Investors are looking at the NHL as almost a value play right now. You can get in. The cutoff again in the NBA right now is $3 billion, the bottom of the NFL is $4 billion, so if you're going to own a team in a major U.S. sports league and can get in at $1 Billion that's what's really causing a lot of people to look at the NHL right now," added Badenhousen.
In terms of the Buffalo Sabres, Sportico reports the value of our hometown team has jumped to $900 million, an increase of 42%.
"Sign me up," says Nelli Drew, Director of The Center for the Advancement of Sports at UB, "Do you know what the average return of the S&P is? It's like 12%."
The $900 million valuation of the Sabres still has the franchise near the bottom of the league, but Drew says the return on investment for owners Terry and Kim Pegula has been impressive.
"What did they pay? $189 million in 2011? So that's a 476% return on investment. That's pretty good," Drew added with a laugh.
Drew added one of the primary components to determining a team's valuation is the sale price of the most recent franchise sold. She points to the $950 million sale of the Ottawa Senators as a factor that helped increase the value of smaller market teams like the Sabres.
"There is an intangible value to being able to sit at the table. It's the ultimate prize for a lot of people. It's not all to do with wealth, although that's certainly a part of it," says Drew, "It's a very small club and so there's a value to that exclusive group."
