Vincent: Higher Franchise Values Partly Due To Possible Sports Betting Legalization

Franchise values in all four of the major North American sports leagues (especially the NBA and NFL) have soared into the stratosphere in recent years.

The main reason? TV rights deals, which have soared in value as TV networks run out of compelling content to serve ads on. Live sporting events remains one of the few reliable sources for commercial income due to the fact that most people will watch this content in real-time.

Another reason?

According to former Major League Baseball Commissioner Fay Vincent - legalized sports betting.

There has been a shift in recent years by the Big Four sports leagues in North America.

In previous years, led by the likes of David Stern, the Big Four were fervently against the possibility of legalized sports betting.

With new, younger commissioners such as Adam Silver and Rob Manfred now in charge, the attitude seems to be shifting towards a legalized sports betting landscape. If you look towards Europe, where many countries have regulated sports betting markets, you can see that sports betting helps to swell TV ratings. It makes sense - if you have a wager on a game, you are much more likely to watch it, even if your favorite team is not playing. Data supports this, as viewership numbers are way higher when people have money wagered on a game. Due to the vast array of different betting types that are available (including in-play betting, which allows you to bet as the game progresses), many people who have wagered on a game will watch until the bitter end. If you have the New England Patriots plus 21 points and they are winning 48-21 with 7 minutes left in the game, you are not turning your TV off, even though the outcome of the game has already been determined.

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Faye Vincent acknowledges this trend and says that legalized sports betting in the United States is "not far off".

In fact, Vincent goes on to say that the spectre of legalized sports betting in the United States is helping to boost franchise values.

There is no doubt that leagues would immensely benefit from a change in the laws. To start, TV ratings would surely increase, which would translate into increased TV rights deals.

In addition, you'd have more sponsorship opportunities (the major sports betting companies would likely want to enter into partnerships with teams, similar to what happened in the daily fantasy industry) as well as the potential for the Big Four to license their data.

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In the past, the worry was that the integrity of the leagues could be compromised due to sports betting.

In this day and age, however, sports betting companies are extremely sophisticated and can do a good job of sniffing out betting irregularities. These are not bookies operating in the back of a bar - these are multi-billion dollar companies with leading edge technology that employs tens of thousands of workers.

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The Big Four leagues in North America are starting to get behind legalized sports betting, which means that there is a very good chance of it happening sooner rather than later.

In the end, money talks, and this development would significantly increase the revenues of every pro team in North America.

Source: ESPN.com - Fay Vincent Says Legalized Sports Gambling Coming Soon

Filed under: General Knowledge