CINCINNATI — If history is a reliable indicator, the Cincinnati Bengals are in a good position to boost revenue and franchise value, after an appearance in the Super Bowl.
The last five teams to lose the NFL’s biggest game saw franchise value increases of 3% to 19%, according to Forbes magazine’s annual list of NFL Franchise Valuations. Four of those teams saw revenue hikes between 3% and 10%.
“The Super Bowl certainly matters,” said Miami University Assistant Processor Adam Beissel, who teaches and studies the business of sports. “It not only galvanized the fan base around the Tri-State area, but also it seemed to signal that the Bengals are here to stay.”
Beissel expects the Bengals to reach $3 billion in franchise value when Forbes reveals its annual rankings of the NFL’s most valuable teams. The Bengals ranked 31st on last year’s list, with a $2.75 billion valuation.
More importantly, Beissel thinks the Bengals have an opportunity for lasting greatness – with a young roster that leaves plenty of room for free agents to build around quarterback Joe Burrow.
Draft Kings ranked the Bengals third in the NFL this week with $57.3 million in cap space, which is the amount of money a team can commit to new contracts without violating the NFL’s spending cap.
“The magic in the NFL these days is to have a young franchise quarterback that can establish a team for a period of dominance over five to eight years and clearly the Bengals have that,” Beissel said.
Bengal fans David and Vickie Godfrey agree with that assessment.
“I think Mike Brown has started to open his checkbook and sign big players,” David Godfrey said. “So, hopefully, he continues (that) and we get some offensive linemen in here.”
Vickey Godfrey recalled the Super Bowl image of Burrow, screaming in pain after twisting his right knee during a sack.
“When they’re thinking about what they’re going to spend money on, I hope they show that picture right there and realize we’ve got to protect Joe Burrow,” she said.
More good news for fans: Beissel expects the team to boost ticket revenue without big price hikes. That’s because sellouts have been rare in the five years leading up to the just-finished season.
“Ticket prices are a comparatively small portion of their annual revenue,” Beissel said. “So, the backlash that they might get from raising ticket prices and cashing in on this Bengals momentum might not be worth it in the end, when most of the revenue will be generated by corporate partnerships, sponsorships and broadcast rights.”
But if the Bengals really want to maximize its revenue potential and franchise value, it should push for a better stadium deal, Beissel said.
“Stadiums play a large role in the valuation of a franchise, especially if the team owns their own stadium like the Dallas Cowboys,” he said.
Dallas ranked first in the NFL for the 15th straight year last September, when Forbes placed the team’s value at $6.5 billion. AT&T Stadium accounted for 22% of that value, or $1.4 billion. The Bengals’ stadium deal was valued at $58 million by Forbes, or 2.5% of its total valuation.
The Bengals are nearing the end of a 26-year lease for Paul Brown Stadium, which is owned by Hamilton County. The lease partners commissioned a $375,000 study of capital needs for the stadium. That report is expected to be delivered soon, with negotiations on a new lease tentatively slated for 2024.
“For the Bengals to increase their franchise valuation and gain ground on some of their competitors, they’re likely going to target adding additional luxury box seats to Paul Brown stadium so that they can capture revenue that they don’t have to share with other teams,” Beissel said.
