See Congrats on Joining the Lakers, Luka Doncic. You Just Lost $32 Million: When Luka Doncic was dealt to Los Angeles in one of the biggest trades in NBA history, tens of millions of dollars in future earnings immediately evaporated by Robert O'Connell of The WSJ. Excerpts:
"from the moment the deal was agreed, Doncic also saw tens of millions of dollars in future earnings instantly go up in smoke.
"Had he stayed in Dallas, Doncic would have been eligible to sign a “Designated Veteran Player Extension,” after next season. That would have paid him 35% of the salary cap, or $345 million over five years.
The problem is those “supermax” contracts can only be offered to players who meet certain parameters. And unfortunately for Doncic, one of those is that they’re still on their original team."
he will now have to take an alternate route to top-tier NBA riches. Doncic will likely sign a shorter initial deal in Los Angeles, worth $106.1 million over two seasons. That would allow him to sign a supermax deal as soon as he is eligible, in the summer of 2028. (Playing 10 seasons would let him qualify again.)
But in the meantime, he is stuck making about $17 million less over his first three years with the Lakers than he would have in Dallas."
"With the Mavericks, Doncic played in the tax-friendly state of Texas, where his 41 home games a year—plus several others against the in-state Spurs and Rockets—were subject to zero state income tax.
On the West Coast, Doncic will be subject to a 13.3% state income tax on his earnings at home games, and on every day he practices at the Lakers’ facility, according to Sean Packard, a CPA with numerous pro-athlete clients. In all, he would pay approximately $18.3 million in taxes over his first three seasons in California compared with just $3.3 million had he stayed in Dallas on a supermax deal.
Which means that the total amount he stands to lose over the next three years playing in Lakers gold comes out to something more like $32 million."
See The NFL Has a New Most Valuable Team—and It’s Worth $8.3 Billion: The sale of a minority stake in the Philadelphia Eagles values the club at a record amount for a U.S. sports franchise, underlining the soaring price tag to get into America’s most popular sport by Andrew Beaton of The WSJ. Excerpts:
"the NFL voted this year to allow private-equity investments in its franchises"
"In 2018, the Carolina Panthers sold for $2.2 billion. Four years later, the Denver Broncos went for $4.7 billion. That record lasted barely a year, until private-equity titan Josh Harris completed a $6 billion purchase of the Washington Commanders."
"Philadelphia Eagles owner Jeffrey Lurie sold 8% of his franchise to two buyers, with one of those deals valuing the club at $8.3 billion"
"Moreover, the Eagles aren’t even viewed as the NFL’s most valuable franchise. Which means that in this climate, a club such as the Dallas Cowboys could be worth over $10 billion if owner Jerry Jones ever sought to sell all or part of “America’s Team.”"
"Lurie bought the team in 1994 for a reported $185 million."
"sports teams across the globe are worth more than ever. When British billionaire Jim Ratcliffe bought into soccer giant Manchester United last year, it put the team at $6.3 billion."
See How Much Is Your College Football Team Worth? The Ohio State Buckeyes were just crowned the best team in the country. According to an analysis of what each team would be worth on the open market, they’re also the most valuable program in the sport by Andrew Beaton of The WSJ. Excerpts:
"The Buckeyes would be worth $1.96 billion if the team could be sold on the open market, according to an analysis by Ryan Brewer, an associate professor of finance at Indiana University Columbus. That puts Ohio State just ahead of Texas ($1.9 billion) and rival Michigan ($1.66 billion), with six other programs—Georgia, Notre Dame, LSU, Penn State, Tennessee and Texas A&M—topping the billion dollar mark.
Brewer conducts his study by analyzing a program’s finances and asking: What would it be worth if it could be bought and sold like a professional franchise?
Brewer looks at top-line revenues, growth and drivers of cash flow and makes projections about the sustainability of the operation, just as he would with any other business. It isn’t a mere one-year snapshot, either—he combed through years of data for 131 major college football programs, from the heavyweights all the way down to Louisiana-Monroe. Then, after breaking down everything from television viewership to trends in enrollment, his spreadsheet finally spits out an answer."
"Brewer’s analysis also accounts for factors that might not appear on any balance sheet. Alabama, for instance, used to get a bump simply because of the value one person brought to the program. But Nick Saban is no longer the coach of the Crimson Tide, and the team missed the expanded playoff without him.
Those types of X-factors are also why Brewer says that in the alternate universe where the top college football teams were on the market, he wouldn’t be surprised if the final price were closer to $4 billion. He calculates what the financials say a team should cost. But sports teams are rare assets where the price tag can blow well past the intrinsic value. The Washington Commanders recently set an NFL record by going for $6 billion."
See You Like to Bet on Sports? Here’s a Reality Check: Study finds that the average bettor expects to make a little money on future bets, even though the average result is a loss of 7.5 cents per dollar by Nick Fortuna in The WSJ. Excerpts:
"A new study by Stanford University researchers finds that the average online sportsbook customer expects a gain of 0.3 cent for every dollar wagered. In reality, sports bettors lose an average of 7.5 cents per dollar wagered, reflecting “widespread overoptimism about financial returns,” according to Matthew Brown, a Stanford doctoral student and lead author of the study."
"10% of bettors were overly optimistic about their potential winnings by more than 20 cents per dollar wagered; 80% were also found to be overly optimistic, but not to the same degree as the most overoptimistic; and the remaining 9% of bettors underestimated their actual future returns.
"“We found that people more or less understood the amount of money they had lost in the past, but they just thought the future would be better,” Brown says.
Bettors participating mostly in parlays—long-shot bets that require multiple correct predictions to win but offer higher payouts than simple wagers—were especially bad at predicting future success. These bettors were an average of 18 cents per dollar more overly optimistic than bettors who rarely played parlays, the study found."
"20% of participants reported betting too much."
"Even when bettors know their past losses, they remained optimistic about the future"
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