More than a decade ago, the former Dean of the NYU Schack Institute, Ken Patton, and myself, Barden Prisant FRICS, President of International Art Advisors, coined the term “Iconomics”- an exploration of how one can use traditional valuation methodologies when evaluating items of iconic status.
For help understanding the complexities of these types of valuations, consider the case wherein the United Nations designates a threatened monument a World Heritage Site and pleads with the country in which it resides not to tear it down. That government, should it be feeling extortionate, could fairly ask, “Well, what’s it worth to you?”
What indeed are these iconic assets worth?
At last May’s Summit, Ann Gray FRICS of Gray Real Estate Advisors and I tackled the valuation of an iconic property on the eve of its great transition: the White House. Little did we know at the time, that an even more transformative event for the world of sports was in the offing: the winning of the World Series by the Chicago Cubs, who finally broke a 108 year-long losing streak.
In what looks like to have been a remarkably prescient move in retrospect, a gentleman named Tom Ricketts bought the Cubs in 2009, 101 years into that soon-to-end drought. He purchased both the club franchise and Wrigley Field (along with a share of a firm named SportsNet Chicago), for approximately $875 million.
I would conjecture that someone with such obviously keen business acumen might be asking himself a question right now: “How much did winning the World Series make me?”
Care to take a guess?
Well, at the Summit in Chicago this coming May 1-3, this is exactly the question which Bruce Bingham, FRICS and I will be tackling. The breadth of expertise which RICS offers is impressive: we can value sports teams; we can value 40,000-seat stadiums; we can even value baseball cards. And yes, we can value the World Series.
Join us as we consider some of the issues which would be involved in performing such an assignment:
- The stadium was built in 1914; there is only one older in all of baseball. How much longer can it last, and is there a ceiling on how much yearly profit it can make without those cash cows known as “sky boxes”?
- Would it be more profitable to just part out the stadium and sell all of those seats and pieces of the field (yes, they do that), to collectors?
- Is it already too late for Ricketts? Everybody was transfixed last year because the end of the legendary streak was in the offing. The 2017 season might just be an anticlimax, and imagine the new salary demands. (By way of example, Jake Arrieta earned $10.7 million in 2016. Word has it that he may ask for $16 million this year, which would represent a 50 per cent increase. Imagine the effect on the bottom line if all of the Cub’s expenses skyrocketed like that in a single year...)
When embarking upon such projects, one never knows what surprises await. In appraising the White House art collection, I was amazed to discover that the most valuable paintings therein were not American at all, they were European. For her part, Ann was fascinated to learn that the land on which the White House is built is entirely un-zoned.
If any of you reading this can foresee such issues, please feel free to drop me a note: email@example.com.
When going up against the World Champions, we can use all the help we can get.
M. Barden Prisant FRICS
International Art Advisors
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