How did the Rams become L.A.’s most valuable sports franchise?

A decade ago, the languishing St. Louis Rams were ranked dead last in the NFL with a franchise valuation of $930 million.

Faced with an unappealing stadium lease and dwindling prospects in St. Louis, the Rams turned their attention westward, toward their Los Angeles roots. Quietly, they acquired two parcels of land at the former Hollywood Park racetrack in Inglewood, where they would eventually build SoFi Stadium, a state-of-the-art venue that would redefine the franchise and reshape the NFL’s footprint in Los Angeles.

Today, according to Sportico rankings released Wednesday, the Rams are valued at $10.43 billion, second only to the Dallas Cowboys at $12.88 billion.

This valuation comes a month after CNBC ranked Stan Kroenke’s portfolio of teams — the Rams, the NBA’s Denver Nuggets, NHL’s Colorado Avalanche and Premier League’s Arsenal — the most valuable in sports at $21.2 billion.

The Rams join the Lakers as the city’s second sports franchise with a valuation of at least $10 billion. The latter was based on an actual sale. In June, the Buss family entered into an agreement to sell majority ownership of the Lakers to Dodgers owner Mark Walter for a franchise valuation of approximately $10 billion.

The Chargers, who are tenants at Kroenke’s stadium, are 21st on the Sportico list at $6.2 billion, one spot up from last year.

The valuations are based on the team itself, along with any businesses and real estate holdings related to the team.

David Carter, principal at The Sports Business Group and adjunct professor of sports business at USC, said teams are usually valued based on a multiple of their annual revenue, and that valuation also takes into account the likelihood of future revenue growth.

“For Kroenke and the Rams, this has always meant monetizing SoFi in as many ways possible, while simultaneously positioning the venue as a global leader in sports and entertainment,” he wrote in an email to The Times. “Having accomplished this, and with the team’s strong fan bases – both traditional and corporate – the recipe is in place to continue to achieve high valuations, especially when you also consider the team’s competitiveness of late.”

Attaching a number to these teams is largely an academic exercise, because the only true test comes when they are sold — and those sales are rare.

Three NFL franchises have changed hands in the past 10 years: the Washington Commanders (2023), Denver Broncos (2022) and Carolina Panthers (2018).

Writes Sportico’s Kurt Badenhausen: “Scarcity is a major driver in pushing team values higher, as more billionaires are minted each year and franchises are rarely added.”

Carter said the NFL franchise valuations published by Sportico and others aren’t entirely accurate because they don’t fully reflect the supply and demand for teams at any given time.

“The ultimate price, should a team be sold, will be determined by factors in real time,” he wrote, “such as how many bidders there are and how many teams are for sale at the time. This typically results in franchises being sold for more than the reported value calculated by the trade press. Nonetheless, these valuations serve as an important data point to those in the industry.”

As for the Rams, their valuation matters more directionally than numerically, reflecting success and stability in Los Angeles more than a specific price tag.

“As we enter our 10th season back in Los Angeles, Stan Kroenke’s vision to create the world’s greatest sports and entertainment district at Hollywood Park – and to build one of the NFL’s greatest stadiums – continues to help build the profile of the Rams and the NFL,” said Kevin Demoff, president of team and media operations for Kroenke Sports and Entertainment.

“While these rankings may reflect that, the focus remains on building great teams and a district that Angelenos can enjoy, more than focusing on valuations.”