Friday, February 1, 2008

Which Is A Better Investment, The New England Patriots Or New York Giants?

With the Super Bowl coming this weekend I thought it would only be appropriate to discuss which Super Bowl team is a better investment: the New England Patriots or the New York Giants. To get an idea of the overall franchise values, we can consult Forbes, which publishes a NFL team valuation summary every year.

The most recent valuation had the New England Patriots valued at almost $1.2 billion and the New York Giants at $974 million. If you wanted to buy the Patriots, you would have to cough up an additional $225 million--not a small sum by any means. Obviously the Patriots have been a much more successful team this season and may well be worth the additional amount, but let's take a little closer look at some of the numbers.

We need to look at the revenue for each team. The New England Patriots bring in $255 million to the New York Giants’ $195 million--a difference of $60 million. Looking at those numbers, it would take almost four years to regain the price difference between the two teams in terms of additional revenue. Still, four years isn’t all that long a time frame, and after that, if the Patriots were to continue bringing in the additional revenue, they would appear to be a better investment. The key point here is whether or not you see them maintaining their level above the Giants for that entire time span.

Looking at the two rosters, it is my belief the Patriots will continue their success for at least that time period, although I do envision the Giants improving somewhat as well. As Eli Manning matures as a quarterback, the team will only improve. On the Patriots' side, though, Tom Brady is just so good, and the team’s upper management has been excellent. How they were able to get all those high draft picks while giving up hardly anything is beyond me. Even though they will forfeit their number one pick because of this season's Spygate incident, they still have San Francisco’s first rounder, which happens to be seventh pick in the entire draft. So it is plausible that this team could be just as good next year, although matching an undefeated season could be tough.

The Giants seem to be on their way up, but have been inconsistent over the years. They are located in the largest U.S. market, though, so that is a big plus for them. The only downside to that is that they have to share the limelight with the New York Jets. The Giants actually beat the Patriots in franchise appreciation last year. The Giants franchise gained 9 percent in value during the last year, while the Patriots gained only 2 percent. To be fair, though, that number was based on information as of September 2007, and surely the Patriots have gained some additional value after their perfect season.

After looking at all the numbers and various other factors, of the two teams, the Patriots probably represent the better investment. They are more expensive, but they are consistent. The Giants have a lot of potential, but I think I would probably have to go the safe route here.

Enjoy the Super Bowl festivities, and I’ll see you next week!

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