How does the Broncos’ value growing to $3.2B impact future of ownership?

A general view of Denver Broncos helmets on the sidelines in the third quarter against the Chicago Bears at Empower Field at Mile High.
Sep 15, 2019; Denver, CO, USA; A general view of Denver Broncos helmets on the sidelines in the third quarter against the Chicago Bears at Empower Field at Mile High. Mandatory Credit: Isaiah J. Downing-USA TODAY Sports

The annual Forbes magazine assessment of the world’s most valuable sports franchises, hit the news cycle this week. The Broncos again make the list. That increase in value is great news for the current Broncos ownership situation.

The Denver Broncos come in as the No. 25 on the list, along with Premier League powerhouse Chelsea (European Football) and the NBA’s Boston Celtics (basketball). Each of the three franchises is valued at an estimated $3.2 billion, according to Forbes.

The Broncos value has grown exponentially since being purchased by Pat Bowlen and his family from then-owner Edgar Kaiser in 1984 for $78 million. Last year, Forbes valued the Broncos again as the 25th most valuable sports franchise at an estimated $3 billion.

Currently, the Broncos rank No. 11 in the NFL according to Forbes, which is the same as last season.

Over the past several years, the team has continued to gain value and is up from its $1 billion valuations in 2011 and the $2.4 assessment set in 2016.

What does valuation of the Broncos mean?

Valuation is the process that determines the current and or projected worth of a company or asset. A value is placed on that company or asset. For the Broncos, this assessment looks at a few different things.

  1. How the business is managed the capital structure in place (liquidity, cost vs. Revenue)
  2. Prospective future revenue and opportunities
  3. The market value of an organization’s assets (stadium, brand, concessions, merchandise, etc.)

An organization’s valuation represents the return to its shareholders when the business or assets are sold and debts paid off.

All in all, the increased value of the team is great for current stakeholders in yearly payouts and more return if the team is ever sold.

What does this mean for the Broncos Ownership?

More value is good for the Broncos’ ownership situation (Pat Bowlen Trust or successor).

The team is at a critical point where CEO Joe Ellis is stepping aside as on March, 2022. The belief is the team will be sold or control passed to one of Pat Bowlen’s children.

The increased valuation of the organization gives the Pat Bowlen Trust a strong position to sell the team.

What is happening with the Broncos ownership situation?

A sale of the team could be in the cards of finding a successor is not identified soon.

Who that successor is seems to becoming more clear.

Brittany Bowlen is primed to be the next owner of the Denver Broncos. Her current track aligns with the requirements set forth by the Pat Bowlen Trust.

The Pat Bowlen Trust is made up of Broncos CEO Joe Ellis and includes Vice President and General Counsel Rich Slivka and lawyer Mary Kelly.

The trust oversees all business decisions and is tasked with identifying the next successor within the Bowlen family, or if the team should sell to an outside buyer.

The requirements of a successor must to the late Pat Bowlen are extensive. They include but not limited to; advanced degree and time in prominent positions with the organization.

All indications appear Brittany Bowlen is the only family heir who meets the requirements based on the communications expressed by the trust.

The trust itself is being sued by two of Pat Bowlen’s children, Beth Bowlen Wallace and Amie Klemmer. However, the likelihood the trust will be dissolved before the sale or appointment of Brittany Bowlen is low.

In November of 2019, the team made a statement by bringing back Brittany and showed she was the preferred her to the team.

Team president and CEO Joe Ellis said in a statement, “Brittany is working toward earning the right to succeed her father, and this is the next step in that process. Given her work experience and depth of knowledge, we’re looking forward to Brittany returning to work for the Broncos and adding value across our organization.”

After facilitation of the Broncos’ brilliant DEI initiative, as well as the in-depth coordination of the team’s COVID-19 vaccination role out, Brittany Bowlen has received glowing reviews for her efforts. Brittany Bowlen was promoted to Senior Vice President of Strategy.

Increase value of team is great news for Brittany Bowlen

The continued elevation of Brittany Bowlen should prompt us to believe that the impending sale of the team is no longer a foregone conclusion.

An increase in value could lead to call for sale of the team from the remaining Bowlen children. However, they should want to hold on to the asset (the team) as their dividends (payouts) are projected to increase annually.

With an elevated valuation of the organization, the assuming owner (Brittany Bowlen), can use the valuation to attract minority owners or sponsors to increase cash flow (liquidity).

That increased liquidity helps compete for free agents by having cash on hand. When contracts are guaranteed for players, the team must put that money into escrow once the contract is signed.

This increased cash flow helps teams stay competitive for top talent year in and year out.

From the outside looking in, the increase of value helps the Broncos on the field while helping Brittany Bowlen’s case to keep the team long-term.

In the end, it is looking like the team stays with the Bowlen family. Rarely does anyone get rid of an asset that makes money hand over fist, while it also grows in value each year.

Because of the team’s growing value, it would take extreme circumstances to change the direction of this organization, and Brittany Bowlen seems to be the destination.

 

 

 

 

 

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