The World’s Most Valuable Sports Brands 2015/Forbes/Mike Ozanian

23 Oct

The Forbes Fab 40:

Mike Ozanian ,

Traffic cop at the intersection of money and sports

The Forbes Fab 40 measures the value of the top brands in sports. Our brand values do not tell you what the top teams, athletes, businesses and events in sports are worth. Rather, how much the name of each–all by itself–contributes to the value.

The methodology is different for each of the four categories.

For the sports business category, the brand value is the difference between the estimated enterprise value of the business brand and what the value of a similar business is worth. Team TISI +% brands are the amount of the team’s value that can be attributable to local revenue streams such as television and tickets, above and beyond what the typical team in the same sport and in a similar market generates. Athlete brand values are the amount by which endorsement income exceeds the average endorsement income earned by the top 10 earning athletes in the same sport during the past year. And sports event brands are revenue-per-event-day.

More important than quantifying the worth of a brand at a moment in time, when measured over the course of a few years The Forbes Fab 40 tells you which sports brands are growing ones are diminishing. Nike NKE +0.00% is a prime example of the former. Since 2007, the value of the Nike brand has increased from $7.5 billion to $26 billion. Nike’s basketball shoe deal with Michael Jordan has been extremely lucrative for both parties. Nike owns the basketball shoe market in the U.S. with a 95% share, including its Jordan brand subsidiary, and its stock has trounced the overall stock market during the past year.


The Forbes Fab 40: The World’s Most Valuable Sports Brands 2015

Launch Gallery45 images

Nike gives its swoosh logo tons of love every Saturday with its college apparel deals.Why should the sports channel pay for traditional 30-second ad spots when they can have football and basketball players acting like Nascar autos? This explains why Nike and has reportedly agreed to re-up with the University of Texas for $200 million over 15 years.

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The flip-side is Reebok. Over the past seven years its brand value has plummeted from $2 billion to $830 million.Bloomberg summed up the brand’s decline like this earlier this year: “Reebok has endured an unrelenting jog into oblivion from the pumped-up days of 1989…The ’80s ended with Reebok just barely sustaining a three-year streak as America’s best-selling sneaker brand, notching $1.8 billion in sales, but Nike took over the footwear crown to start the new decade and never looked back. Reebok proceeded to stumble its way to a 2006 acquisition by Adidas for $3.8 billion.”

The influence of technology in sports consumption is Joseph Schumpeter writ large and MLBAM, the Internet/technology arm of Major League Baseball that is equally owned by the league’s 30 teams, is leading the charge. As explained by the The Verge, several years ago, MLBAM began to move away from handling consumer-facing digital operations for non-baseball properties such as Major League Soccer and AVP Beach Volleyball and shifted its non-baseball efforts toward a business-to-business model in which it supported back-end operations and application development for other entities.” I calculate MLBAM’s brand value increased more than three-fold from last year, to $2 billion, thanks to new ventures with the WWE Network, Sony and the National Hockey League.

There are three new entrants to the Fab 40 this year.

The College Football Playoff (event category) is worth $106 million (the average revenue generated by the championship game and two semi-final contests earlier this year). Beginning with the 2014 season, ESPN will pay $5.7 billion over 12 years for the media rights to the three college football playoff games plus four other bowl games. One year in the deal seems like a winner for both the Walt Disney-owned network and college football. In the athletes category, Oklahoma City Thunder forward Kevin Durant joins the party. The perennial All-Star inked a blockbuster, 10-year deal with Nike in 2014 that could be worth up to $300 million, including royalties. Durant’s brand value of $18 million equates to the premium he earns from endorsements compared with the top 10 earning NBA players.

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