The calendar has flipped to February, and on the 12th anniversary of the Seattle Seahawks 43-8 Super Bowl victory over the Denver Broncos, the team is once again set to play for the world championship.
In addition to taking on the New England Patriots with the Lombardi Trophy on the line, a report from ESPN indicates that the Seahawks are set to be sold this offseason, more than seven years after the death of Paul Allen. In the years since Allen’s passing the team has been owned by the Paul G. Allen Living
Trust, while under the direction of his sister Jody, just as Paul laid out in his will.
The fact that the team is held in a trust is not an issue in and of itself, as team owners regularly use trusts to facilitate the transfer of team ownership. There is no shortage of such examples, including former New Orleans Saints owner Tom Benson passing the team on to his wife Gayle, Pat Bowlen transferring ownership of the Broncos and all the way back to Lamar Hunt of the then AFC West rivals Kansas City Chiefs using a series of trusts to pass ownership of the team to his kids.
However, according to a report from the Wall Street Journal on Saturday, what is an issue in the case of the Seahawks is that there is not a single “controlling owner” as the NFL requires, which allegedly contributed to the NFL issuing a fine of $5M.
Whether or not the league, or the other owners, are pushing for the Seahawks to be sold, the reality is that from a valuation standpoint, from a value perspective, it’s not a bad time to sell the team, with franchise valuations the highest they have ever been.
The rapid increase in team valuations was only accelerated after 2021, when the 2020 collective bargaining agreement and new broadcast contracts came into effect.
The 2020 CBA is important because the owners easily came out ahead financially in a second consecutive round of negotiations roughly a year before signing very lucrative new broadcast contracts.
In addition, while the CBA provides for a roughly even revenue split between the owners and players, the players have to divide their portion of the revenues amongst the thousands of current players, along with several thousand former players in the form of pensions, limited post-career health insurance and other post-playing days benefits. On the flip side, the owners don’t have nearly as many hands in the pot, which helps explain the accelerated appreciation of NFL franchises since 2021.
Specifically, in the 15 years since the 2011 CBA was adopted on the eve of the 2011 season, the average value of NFL teams has increased at a rate of 13.7% per year. That is, unquestionably, an impressive number, but from 2011 through 2021, the average team value increased at just 12.8% annually, while in the years since 2021 they have increased at an average of a whopping 19.6% per year.
That kind of appreciation certainly makes an NFL team an attractive investment, but just as the 2020 CBA and the current broadcast contracts have made for hefty returns, they are not eternal. The current CBA is already half over, and there is no guarantee the players won’t do better for themselves at the bargaining table next time around. Likewise, while the NFL currently dominates the airwaves and the list of most watched broadcasts, that could certainly change between now and when the next broadcast contracts are awarded.
Now, it’s certainly very likely that team valuations will continue to increase, so selling now could be leaving billions on the table. However, with the end of the current CBA just over the horizon, the potential for labor unrest in the next round of negotiations on top of the headaches of dealing with pressure from the league to sell the team, a sale makes sense. Add in that according to the estimates from Forbes the value of the Seahawks franchise has increased by more than 150% since Paul’s death, it’s not difficult to make a strong case for selling.
