Bon Jovi Blew It Passing On Atlanta Falcons
Mike Ozanian, Forbes Staff
Traffic cop at the intersection of money and sports
Jon Bon Jovi blew it.
In February, 2011 the rocker was going to invest $150 million for a 15% stake in the Atlanta Falcons. A month later, the NFL lockout hit and Bon Jovi changed his mind because he felt the work stoppage would reduce the $1 billion valuation his investment placed on the Falcons, according to a person familiar with the situation.
But in July of that year, the players and owners agreed to a new collective bargaining agreement. The 10-year deal made team values go up because it reduced the percentage of league revenues that went towards player salaries, and the guarantee of long-term labor peace made it easier for the owners to get new broadcasting deals with ESPN , NBC, Fox and CBS CBS -0.61% beginning in 2014 that are over 60% richer than the league’s current rights fees.
As for the Falcons specifically, controlling owner Arthur Blank got closer to getting the funds for a new stadium Tuesday when NFL owners voted to provide his team with $200 million in league funding. The city of Atlanta, state of Georgia, Georgia World Congress Center & Atlanta Falcons have agreed to build a retractable-roof stadium, with a potential cost of around $1 billion, on the GWCCA campus in time for the 2017 NFL season.
We most recently valued the Falcons at $837 million, 28th out of the league’s 32 teams. The Falcons are also in the bottom-fifth of the league in revenue ($239 million) thanks to playing in the antiquated Georgia Dome. The new, $1 billion stadium will boost the value of the team due to more revenue from premium seating and sponsorships. But without a final lease agreement it is impossible to determine what the precise increase in revenue and value will be for the Falcons.
As a guide, consider that a year ago, James Haslam agreed to pay Randy Lerner $1.1 billion for the Cleveland Browns–paying 70% of the purchase price immediately and 30% in three years. The present value of the future payment valued the team at $987 million. Atlanta is much bigger market than Cleveland and will have a state-0f-the art stadium, so it is hard to see how the Falcons could be worth less than $1.1 billion once the stadium is a done deal.
But Bon Jovi will likely only profit from the new stadium by performing during halftime of a Super Bowl.