Mark Tenally/AP Photo
Merchandise sales, licensing deals, and other sources of revenue could flow from the team's new branding.
Mark Tenally/AP Photo
The Washington NFL team is facing a major reckoning of culture and identity. But, somewhat counterintuitively, this turmoil could end up boosting the bottom line for the team's owner and investors, even if the team's performance continues to lag, experts say.
That's because new branding for the team—long named after a dictionary-defined racial slur—will probably lead to new proceeds from merchandise sales, licensing deals and other sources. And with a presumably less controversial name and logo on the horizon, the prospect of a new stadium, whether located in D.C. or one of its suburbs, could inflate the team's economic value.
In July, the team announced that it would "retire" its former branding, a decision that followed mountingpressure from corporate sponsors and the public. Then came a sweeping Washington Post investigation into the franchise that uncovered a toxic work culture rife with alleged sexual harassment and misogyny. A week later, the team said it would go by the "Washington Football Team" until a new permanent name is chosen. (The change is expected to happen within a year.)
In addition to these issues, athletic success has proven elusive for the team, which has made the NFL playoffs only five times in the past 21 seasons and last won the Super Bowl in 1992. Game attendance at the franchise's home field in Landover, Md., has declined over time, with the team seeing the 13th-lowest attendance in the 32-team league last year.
And yet, Washington's football team has continued to make money. Last week, Forbes valued the team at $3.4 billion, ranking it the seventh most valuable NFL franchise and the 14th most valuable sports franchise in the world. This represented a $300-million increase over 2019 and more than double the team's valuation a decade ago.
Team owner Daniel Snyder purchased the team in 1999 for $800 million. Four years later, the team's value rose to $952 million, according to Forbes. Snyder himself is currently worth $2.6 billion, making him one of the top 400 richest people in America, per the business publication.
Some sports economists say the team and Snyder could rake in even more dough now than had his team's branding stayed the same.
"There's really some decent money in changing the logo," explains Nola Agha, an associate professor of sport management at the University of San Francisco and a board member for the North American Association of Sports Economists. "What you have is a new revenue stream ... from selling merchandise, licensing or anything that has the new logo on it."
It helps the team that NFL franchises tend to make money regardless of athletic performance. Kenneth Shropshire, the CEO of the Global Sport Institute at Arizona State University, notes that team values generally rise "no matter what shortfall is taking place at the moment."
A team's valuation refers to the expected price the team would fetch if it were sold. The future name of the Washington Football Team could strengthen the team's valuation by as much $100 million over time, according to Andrew Zimbalist, an economist at Smith College specializing in the sports industry. Even the team's temporary name may benefit the owner and his investors.
"If you are Dan Snyder, you want to milk the system for all it is worth," Zimbalist says. "And a year from now ... or 10 years from now, people can say that 'this is one of the X number of t-shirts in the world that say Washington Football Team.' [Snyder has] created another memorabilia category."
Still, there's another big factor to consider in terms of the team's value: The potential revenue loss from fans not attending games this year because of the COVID-19 pandemic. That would be a massive financial hit for all NFL teams, but perhaps especially for Washington's: 41% of the team's annual revenue comes from its stadium, reports Forbes. (How much the rebranding would offset stadium losses remains to be seen.)
This isn't the first time a D.C. sports team has changed its name and logo. In 1995, Abe Pollin, the owner of the NBA's Washington Bullets, announced a name change due to the association with the city's rising homicide rate at the time. He put the choice of name to fans, and 500,000 ballots were cast—producing 3,000 suggestions. The team became the Wizards, switching its logo and jerseys in time for the 1997-1998 NBA season. (The other finalists included the Sea Dogs, Express, Stallions and Dragons.)
While it's unclear how much the name change helped the Wizards' valuation, it coincided with the opening of MCI Center (now called Capital One Arena), which helped Pollin sell the team for roughly $200 million two years later, to current owner Ted Leonsis.
Stadium considerations were likely part of Snyder's calculus in finally changing the Washington Football Team's name, according to experts.
District officials have long maintained that any proposal for the team to move back to the city and build a new stadium must include a name change. "We think it would be beneficial for the team to move back to D.C.," John Falcicchio, D.C. Mayor Muriel Bowser's chief of staff, told DCist/WAMU last month, before the team announced the change. "However, we don't see any viable path locally or federally if the team does not change its name."
That political dynamic appears to be changing. A new stadium that's centrally located in D.C., as opposed to the 23-year-old FedEx Field in Landover, would be a massive coup for Snyder. The Robert F. Kennedy Memorial Stadium site is seen as prime real estate for a new stadium, but many residents and some lawmakers have said they oppose building an NFL stadium there.
"A new stadium will always increase the value of any team," argues Agha, of the University of San Francisco. "We normally see the value of a professional [sports] franchise increase by $400 to $500 million a few years after a new stadium is built." (This would equate to a 15% increase over the franchise's current valuation of $3.4 billion.)
Both Agha and Zimbalist, at Smith College, say Snyder made the right move by opting for the simple "Washington Football Team" name, giving fans, corporate sponsors and team officials roughly one year to weigh in on the permanent name. They also both say it doesn't particularly matter what the next name is, from a financial perspective—as long as it doesn't push corporate sponsors away.
Many fans of the team also appear to believe that it doesn't matter what's next, as long as it's different than before. That could look like names such as the Red Wolves, Red Tails, Warriors or Red Hawks.
"Hopefully, it will end up being something that will be universally loved, embraced and will carry them on for another hundred years," says Agha.