Regular readers of this blog know that I like to dive into the numbers behind different things such as this recent post on Olympic gold medals, or this one on stock market exchanges or this one about U.S. state’s prosperity.
All three of those posts have something in common, it’s the Pareto Distribution. When I watched a CNBC clip about their new NFL team valuations I was intrigued. You can find the data here but right off the bat or should I saw football, the valuations looked wrong because they didn’t conform to the Pareto distribution.
My NFL Valuations
I created the following table using the pareto distribution to estimate what the values really should be.
| Rank | Team | Value (billions) | City Pop |
|---|---|---|---|
| 1 | New York Giants | $17.47 | 9517000 |
| 2 | Dallas Cowboys | $16.04 | 7637387 |
| 3 | Chicago Bears | $12.78 | 8984000 |
| 4 | Houston Texans | $12.58 | 6802000 |
| 5 | New York Jets | $12.00 | 6655000 |
| 6 | Miami Dolphins | $12.00 | 6317000 |
| 7 | Los Angeles Rams | $12.00 | 6299000 |
| 8 | Los Angeles Chargers | $12.00 | 6299900 |
| 9 | Atlanta Falcons | $12.00 | 6193000 |
| 10 | Green Bay Packers | $10.47 | 5931370 |
| 11 | Philadelphia Eagles | $10.23 | 5821000 |
| 12 | Washington Commanders | $10.18 | 5545000 |
| 13 | Arizona Cardinals | $7.95 | 4777000 |
| 14 | New England Patriots | $5.73 | 4367000 |
| 15 | Seattle Seahawks | $4.34 | 3549000 |
| 16 | Detroit Lions | $4.34 | 3528000 |
| 17 | San Francisco 49ers | $4.22 | 3343000 |
| 18 | Minnesota Vikings | $4.09 | 3014000 |
| 19 | Tampa Bay Buccaneers | $4.08 | 3009000 |
| 20 | Denver Broncos | $3.81 | 2963000 |
| 21 | Las Vegas Raiders | $3.44 | 2953000 |
| 22 | Baltimore Ravens | $2.75 | 2370000 |
| 23 | Carolina Panthers | $2.70 | 2321000 |
| 24 | Indianapolis Colts | $1.94 | 1903000 |
| 25 | Cincinnati Bengals | $1.61 | 1787000 |
| 26 | Cleveland Browns | $1.00 | 1771000 |
| 27 | Kansas City Chiefs | $1.00 | 1739000 |
| 28 | Pittsburgh Steelers | $1.00 | 1708000 |
| 29 | Jacksonville Jaguars | $1.00 | 1345000 |
| 30 | Tennessee Titans | $1.00 | 1333000 |
| 31 | New Orleans Saints | $1.00 | 1021000 |
| 32 | Buffalo Bills | $1.00 | 886000 |
I don’t know what the politics were around the original valuations but CNBC is an advertiser so I guess everyone needs to look good but the reality is that a team should be valued based on the revenue it can generate in ticket sales, television contracts AND population. The population is the most important part because the more eyeballs the larger the revenue potential.
In my table I added the population of each city. Note that I did cut New York and Los Angeles in half because they have multiple NFL teams.
In theory and based on the pareto distribution this is what the valuations should be but NFL teams can be a fickle thing and sentiment can change quickly.
In any event, this was simply an exercise in valuing an asset and a way to kill some boredom and use AI.
Superbowl Wins – Pareto Distribution
How applicable is the Pareto distribution on football you may be asking so I decided to check the Super Bowl wins against the Pareto principle.
- Boston – New England Patriots: 6 wins (10.3%)
- Pittsburgh – Steelers: 6 wins (10.3%)
- San Francisco -49ers: 5 wins (8.6%)
- Dallas – Cowboys: 5 wins (8.6%)
- Kansas City – Chiefs: 4 wins (6.9%)
- Green Bay – Packers: 4 wins (6.9%)
- New York – Giants: 4 wins (6.9%)
- Denver – Broncos: 3 wins (5%)
- Oakland – Los Angeles/Las Vegas: 3 wins (5%)
- Washington – Redskins: 3 wins (5%)
- St. Louis / Los Angeles: 2 wins (3.4%)
- Miami – Dolphins: 2 wins (3.4%)
There are 32 teams and 58 games. The top 20% of teams (Patriots, Steelers, 49ers, Cowboys, Chiefs) have won 50% of the games. The top 12 teams or 37.5% have won 80% of the games. The bottom 12 teams or 37.5% have won zero games.
Share The Wealth
What do you think? Did CNBC value these teams properly or did I do a better job? Let me know in the comments below.