If you have inherited funds or have saved a large amount of money over the years, you may be toying with the idea of purchasing one of the minor teams in a sports league. The idea of turning a team into a great one can be attractive, and if you don't think the economy will improve, you may think that purchasing a sports franchise would give you a better return on investment. Whatever your reasons for considering such an endeavor, you're going to have to think about each of the factors described below.
Revenues and Expenses
Of course, one franchise factor to consider is how much money it's making. Franchise owners love to brag about ticket sales and sponsorship deals, so you even before you meet with current owners, you'll be able to have some clue about how much money a franchise is bringing in. Usually, the more they're making, the more expensive they'll be. Not only that, but as the new owner you'll be responsible for continuing to bring in those numbers.
Player contracts, lawsuits, maintenance costs and other expenses can be harder to find on your own. You'll need to know about these to feel confident that a franchise is making more money than it's spending.
Recent Franchise Sales
Perhaps the best way to know whether you're getting a good price on a sports franchise is to have a look at recent sales. A valuation service that works on sports franchise can be invaluable; being able to compare and contrast the team you want to buy with other local teams can give you a true picture of how much the franchise is truly worth so that you aren't taken advantage of.
Your Personal Abilities
Even if you're sure that you're about to buy an affordable team poised to break into the limelight, you still have one more thing to consider: yourself. If you plan on investing a great deal of money into this purchase, you need to be coldly honest about your ability to own the franchise. What business experience do you have? If you don't have much, who will you bring on to help you with the day to day issues you'll face? Do you have specific plans to grow the franchise? If you start to do some introspection and realize that you can't confidently say that you're going to be a great owner, it's better that you admit it before spending the money and affecting the lives of everyone connected to the team.
Once you've had time to research and think of the things described here, you'll have a better idea of what you'd like to do. If you want to go forward, talk with a rep from a sports franchise valuation service or franchise brokers who can help you find possible teams to purchase and ensure you spend the right amount of money.