Lewis Hamilton has joined a group which is buying into the Denver Broncos American Football team.
The seven-times world champion, who owns a property in the Colorado mountains, has joined the Walton-Penner Family Ownership Group which is in the process of buying the three-times Superbowl winning NFL team.“We’re delighted to welcome seven-time Formula 1 world champion Sir Lewis Hamilton to our ownership group,” the group said in a statement. “He is a champion competitor who knows what it takes to lead a winning team and a fierce advocate for global equality, including in his own sport.
“With over 100 race wins, Lewis is considered the most successful F1 driver of all time. His resilient spirit and standard of excellence will be an asset to the ownership group and the Broncos organisation.”
The takeover, which is valued at $4.65 billion (£3.81bn), will be formalised next week. Hamilton has joined former United States secretary of state Condoleezza Rice and Starbucks chairwoman Mellody Hobson as limited partners in the deal.
Earlier this year Hamilton was part of an unsuccessful bid to acquire the Chelsea football club, which was put up for sale when its previous owner Roman Abramovich was sanctioned by the British government in reaction to Russia’s invasion of Ukraine.
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Proesterchen (@proesterchen)
2nd August 2022, 16:24
Solid investment, though I personally don’t understand the move to add somewhat random celebrity ownership from the people doing the actual buying.
But I guess they’re all happy with the terms in exchange for extra exposure, goodwill, and eventual profits.
Zink
2nd August 2022, 16:47
A random celeb as co-owner is a marketing campaign at no cost. Also the co-owners won’t be cheering for another team. So it is a win-win situation.
Spencer (@spencer)
2nd August 2022, 16:58
He lives in Colorado nearly full time these days and has many ties to the area/new ownership group
jff
2nd August 2022, 17:39
If valuing a single rugby team at almost $5B I don’t understand the often heard dismay in F1 when a new team only has to pay a meagre $0.2B entry fee.
Spencer (@spencer)
2nd August 2022, 18:00
Doubt many rugby teams get a $5b valuation
Adam
2nd August 2022, 19:27
you do know how how much money the NFL makes in TV money? it’s tv deals are absolutely massive. The new NFL TV deal is worth $113 billion for the next 10 years. That is why a random nfl team is worth $5 billion. Only the Premier league gets anywhere near the amount of money the nfl makes and that is worldwide tv deals, while the nfl deal is America alone.
AlanD
2nd August 2022, 19:29
JFF, please don’t call the Denver Broncos a rugby team. It makes you sound like you are in denial that American Football is a sport in its own right. I’m not sure where you get the 0.2bn entry fee for F1 from. I believe the entry fees for 2022 ranged from 2 million, up to about 4.5 million for Mercedes, unless I am reading the numbers incorrectly. Maybe you are referring to the budget cap for the F1 team. But that doesn’t really matter because the 4.65bn refers to buying the vost of buying the team from its previous owners, and the 4.5m in F1 refers to the entry fee for one year, not the cost of buying up the whole of the Mercedes GP team.
NFL is a huge sport, just as F1 is. Both sports have huge TV audiences and huge TV revenues. However, in F1, the lion’s share of the revenues goes to the commercial rights holder, Liberty, and previously the rights were owned by Bernie Ecclestone who bought them off the FIA for a token sum. To take part in F1, teams have to pay, and the tracks have to pay. Compare that to the NFL where the teams own the commercial rights, the teams get the TV revenues, and the teams have a shared system, “the draft” for bringing in new young players which helps strengthen the weaker teams each year, so very difficult to compare costs of competing in NFL compared to costs of competing in F1.
F1 is possibly the only sport on the planet where the sport doesn’t own the commercial rights to itself.
Ben (@1nkling)
2nd August 2022, 20:10
I assume he’s talking about the $200 million buy in a new team has to make.
Tifoso1989 (@tifoso1989)
2nd August 2022, 21:25
AlanD, @1nkling
In the latest Concorde agreement, it was agreed that any new team (new entry and not the purchase of an already existing team) has to pay a $200m anti-dilution fee to compensate the existing teams for their potential loss of income.
jff
2nd August 2022, 21:57
AlanD,
Never meant to offend you (or others) but as a non US citizen (though still part resident) I struggle with referring to NFL/AFL as football. I certainly never claimed it was not a sport (of course excluding the extensive commercial breaks) and I have enjoyed various matches in person myself.
I trust the replies above explain the $200K entry fee reference.
Interestingly also F1 owns its own commercial rights. The difference though is that in F1 the teams are just ‘contracted partners’ whereas in the other sports mentioned the teams are either owners or full franchisees.
AlanD
2nd August 2022, 23:27
JFF, you didn’t offend, just sounded like you were in danger of going down the path of NFL being a poor relation to rugby, much like some cricket fans refer to baseball as rounders.
What we call football, much of the world calls “soccer” which I believe is derived from “association”, as in “Association Football”. The full name of rugby is rugby football, and the reason tries are called tries in rugby is because in the first version of the game, you didn’t score any points for a try, it just won you a chance to kick a conversion, which converted your try into points. Gaelic Football and Australian Rules Football both seem to be halfway between what we would call football and rugby. It was the mid-1850s that soccer began to have formal rules and competitions in the UK, at almost exactly the same time as Aussie rules were written and the first matches held in Australia. Anyway, point is that while, like you, when I hear the word football I always automatically think soccer, we have to acknowledge that this is mostly an English usage, and we don’t own the word or the language. Really football is a generic term for any sport where points can be scored by kicking the ball into a goal.
Thank you all for clarifying the 200m entry fee. I wasn’t aware of that, though it does sound like a good idea. Now I have that context, I’m guessing you mean that given the costs of buying into a major sport like NFL or F1, the additional cost of the 200m entry fee shouldn’t be an obstacle to a serious applicant. I’d misunderstood your original comparison.
“F1 owns its own commercial rights”
Again, feel free to enlighten me, but I’m convinced it effectively does not. Bernie Ecclestone originally did some deal with the FIA to get the TV rights and then the on-track advertising rights, and a ridiculous amount of control over the sport. In 2000, he did some deal which gave him the sport’s commercial rights for 100 years, (yes, one hundred years) and he has sold those rights to Liberty Media. The trade marks such as “FORMULA ONE” and all its variations, the logos, etc, and the rights to use those names in computer games, on merchandise etc, generates revenue for Formula One Group, but that company was also owned by Bernie and sold to Liberty Media.
Moi
2nd August 2022, 20:37
So not knowing anything about rugby economics, is this intended as an actual investment i.e to make more money, or more of a ‘plaything’ like oligarchs and oilsheiks buy football teams?
falken (@falken)
2nd August 2022, 21:40
If the deal looses money, huge tax write off, win
If the deal makes money, win.
Rich people do not have to use the same rules as us lot
NotAWin
2nd August 2022, 23:06
> If the deal looses money, huge tax write off, win
You can only write off a loss against your taxable income; it’s not a dollar-for-dollar tax credit. So if you participate in an activity that is taxed at 40% of profits and you lose, say, $10 million, then you’d reduce your tax bill by up to $4 million on other income but you’d still be out $6 million. It’s definitely not a “win” to write off an investment.
AlanD
2nd August 2022, 23:35
falken (@falken) “If the deal looses money, huge tax write off, win”
It doesn’t quite work like that, at least not for UK tax payers. If you lose money in a business venture, the tax man doesn’t bail you out. Before someone chimes in with the claim that Hamilton doesn’t pay UK tax, yes he does. He actually pays tax in several countries, depending on where the money is being earned, and in the UK he is one of the top 5,000 tax payers in the country. Yes, his accountants will claim whatever allowances they can, and that is quite legal. If there is anyone here who willingly pays more tax than they are required to, please put your hands up now.
Posaunist
3rd August 2022, 5:39
If the team loses money, the apocalypse is near. The NFL has an almost foolproof system to guarantee profits. Salary caps (the same for all teams) , TV revenue shared equally by the teams, a rulebook that has TV time-outs built in for advertisers. The NFL is a pure money making machine. I live in Denver, btw, but am not an NFL fan. The damage the NFL allows to the players, particularly brain damage, is unconscionable. The NFL could buy F1, but wouldn’t. By comparison, F1 is a poor investment.
AlanD
4th August 2022, 13:22
“The damage the NFL allows to the players, particularly brain damage, is unconscionable.”
That’s a really good point, and I have a friend who is wheelchair-bound because of a hit in an amateur game. However, I also have to respect that NFL has acted sooner than many sports to protect players, so it introduced the requirement for helmets, it outlawed certain plays because they were associated with more injuries, and they wear superb padding and protection. However, good intentions can have unexpected consequences. Because the players wear such good helmets and gear, they think they are bullet proof, and now they smash into each other at speeds which would be unthinkable and immediately fatal if they wore no head protection.
That parallels what happens in F1. The F1 car is so much safer these days, and we’ve seen some horrific accidents in which the driver simply walks away. Of course, that is a good thing, but now we see drivers much more inclined to push each other off track, or dive up the inside when a collision is almost inevitable, because the consequences for getting it wrong are a trivial five second race penalty, or at worst, a broken suspension and a hissy fit about who was at fault. If the consequences of misjudging your braking were more severe, more likely to put you in hospital, drivers would be less likely to make those moves, and you would see more difference between the drivers, favouring those with better skills.
Don’t get me wrong, I don’t want to see any rollback of safety features, but they do change drivers attitude to risk.
timdoug (@timdoug)
4th August 2022, 20:46
“The damage the NFL allows to the players, particularly brain damage, is unconscionable.”
I find this comment a bit rich on an F1 fan site. No denying in the past the NFL has treated player beyond poorly. However, going forward, these dudes know exactly what they are in for.
AlanD
3rd August 2022, 0:08
Moi, good question. It differs from the oligarchs and soccer. Many of the successful soccer clubs owe that success due to oligarchs pouring in millions of pounds or euros, (but it’s small change to them) to buy success to massage their own ego. Some clubs rely on owners to run it at a loss, even though this method of subsidy is supposed to be against FA rules. The structure of American football makes it much more difficult to buy success, and franchises have to be run on a sound financial footing with collective bargaining for TV rights etc. However, it is clear many of the owners feel passionately about their teams and it is interesting to see that at the end of the superbowl, when the winning team is on the podium and the Vince Lombardi trophy is handed over to the winners, it is the owner who is awarded the trophy rather than one of the players.
Alex
3rd August 2022, 11:12
“Best fans in the world”
timdoug (@timdoug)
4th August 2022, 20:53
For those of you outside the US, this shows how big football is here:
https://www.sportsmediawatch.com/2022/07/best-sports-ratings-2022-nfl-college-football-basketball-nba-olympics/