Atlanta Hawks Forbes Value Review

Kevin C. Cox

How has the valuation of the Atlanta Hawks changed since the Atlanta Spirit Group, and now Atlanta Spirit, took over?

Forbes recently released their 2014 franchise valuations for the NBA. The Hawks come in at 27th place with a current value of $425 million. How has this fared across the years for the Atlanta Spirit Group?

Year Current Value Rank Current Value ($mil) 1-Yr Value Change (%) Revenue ($mil) 1-Yr Revenue Change (%) Debt/Value (%) Debt ($mil) Operating Income ($mil)
2004 25 $202.00 -- $78.00 -- 35% $70.70 -$8.40
2005 23 $232.00 14.85% $83.00 6.41% 31% $71.92 $4.70
2006 23 $262.00 12.93% $87.00 4.82% 27% $70.74 $8.90
2007 25 $275.00 4.96% $92.00 5.75% 26% $71.50 $12.90
2008 26 $286.00 4.00% $95.00 3.26% 25% $71.50 $9.70
2009 21 $306.00 6.99% $102.00 7.37% 23% $70.38 $6.70
2010 20 $306.00 0.00% $103.00 0.98% 21% $64.26 -$2.00
2011 23 $295.00 -3.59% $105.00 1.94% 63% $185.85 -$7.30
2012 28 $270.00 -8.47% $109.00 3.81% 90% $243.00 -$14.70
2013 28 $316.00 17.04% $99.00 -9.17% 75% $237.00 -$18.70
2014 27 $425.00 34.49% $119.00 20.20% 55% $233.75 -$3.60

(Values not adjusted for inflation. Current Value is for said season, i.e. 2004 equals 2003-04 Season. Revenue is for previous season, i.e. 2004 equals revenues from 2002-03)

Well this seems to be a fair trend upward. From the chart above, the Atlanta Spirit Group controlled the Hawks in 2005. They purchased the Hawks, Thrashers, and operating rights to Philips Arena in March of 2004 for $250 million, although they acquired the debt of the Hawks and Thrashers in the process as well. It is difficult to unbundle the purchase price to see how much the Atlanta Hawks were valued by the Atlanta Spirit Group at their time of purchase.

While we see that the Atlanta Spirit Group has increased the value of the Hawks (as measured by Forbes), it is helpful to compare this with the other franchises in the NBA.

Current_value_medium


Of note, the values in 2012 reflect the 2011-12 lockout season. We see a sharp increase after this season which, in part, reflects that the new CBA is more beneficial to NBA Owners than the previous. But how have revenues changed over time?

Revenue_medium

As a whole, the National Television deals between the NBA and Turner Sports and ESPN are shared collectively. There have been two TV deals throughout this time, the first lasted between 2002-03 season to 2007-08 season and valued at $4.6 billion over that time. Then in 2007 an agreement was reached for the 2008-09 season to 2015-16 season between the same providers which was valued at $7.44 billion over that time frame. These account for a large chunk of increase from revenues over that time, but the difference between the Hawks and the League Average lies mainly in ticket sales and local television deals. Keep in mind, the revenues for the 2013 season declined because that is related to the revenues in the 2011-12 season. There were 240 fewer regular season games because of the lockout.

Every year, the Hawks have been below average with respect to current value and revenues. Further, from 2004 to present the average increase in value and revenues for an NBA team has been 140% and 62% respectively. The Atlanta Hawks have experienced 110% growth in value and 53% growth in revenues. Clearly, the Atlanta Hawks are below average with respect to current value and growth in value throughout this time frame.

While it is correct to interpret the Atlanta Spirit has been below average with respect to other NBA Owners, it is important to recognize that they are below average compared to a highly successful group of individuals. So this interpretation effectively says they are in the top 1% and not the top 0.5%. That is still pretty darn good if you ask me.

Data from Rodney Fort's Sports Business Data who sources Forbes.

X
Log In Sign Up

forgot?
Log In Sign Up

Forgot password?

We'll email you a reset link.

If you signed up using a 3rd party account like Facebook or Twitter, please login with it instead.

Forgot password?

Try another email?

Almost done,

Join Peachtree Hoops

You must be a member of Peachtree Hoops to participate.

We have our own Community Guidelines at Peachtree Hoops. You should read them.

Join Peachtree Hoops

You must be a member of Peachtree Hoops to participate.

We have our own Community Guidelines at Peachtree Hoops. You should read them.

Spinner.vc97ec6e

Authenticating

Great!

Choose an available username to complete sign up.

In order to provide our users with a better overall experience, we ask for more information from Facebook when using it to login so that we can learn more about our audience and provide you with the best possible experience. We do not store specific user data and the sharing of it is not required to login with Facebook.

tracking_pixel_9347_tracker