The most basic yet powerful tool for advising any kind of business is the process of stepping back to assess the multi-tiered advantages that a deal can bring to a client.

The best investments are always those that create a ripple effect, providing benefit to not just the client, but to an entire socio-economic ecosystem. From my experience, I have seen firsthand that different investments yield very different returns.

While the layman generally looks first to the short-term and direct profit, a solid investment is assessed from every angle, including advantages in long-term financial goals, economic diversification, cultural growth, networking, and legacy building.

Considering how the pandemic has affected nearly every sector in one way or the other, with those centralized around public gatherings being hit the hardest, one might be surprised to learn that the value of sports team franchises, as a whole, have continued to climb throughout. 

Woven into the fabric of today’s culture, not even a pandemic shutdown of public gatherings can waiver long-term faith in the sports entertainment industry or the steadily increasing value of a team as an asset.

While short-term profits are definitely possible for a smart, strategic owner, particularly when it comes to TV and media rights deals, which create lucrative revenue on their own, with the right investments

implemented along the way, long-term advantages almost always outweigh short-term profit margins.

Investment-wise, appreciation is a clear motive. While there are several factors that play into appreciation, the limited number of sports teams in the world — in other words, the scarcity factor — provides an optimistic outlook on capital gains. 

Manchester City, for example, had a value of around £210 million ($293.2 million at current exchange rates) in 2010, but in 2019 was valued at a little more than £2 billion. However, that is not to say that just buying a team and holding would alone yield favorable capital gains. There is significant work in building up a team’s value along the way.

Additionally, the introduction of a sports franchise to a community is an intrinsic socioeconomic investment in the local community itself. It stimulates job creation, ranging from general to niche, diversifies the economy, and lends strong support to tourism efforts and the additional benefits that tourism can bring to a region. While a quick glance at net job creation (as well as additional tax revenue brought in by the franchise) can be a good way to measure the added value of a sports team to a community, there are several other advantages that are not as quantifiable yet arguably are even more beneficial. This is where the ripple effect comes into play.

Fiscally speaking, one of the least measurable factors is the creation of local multiplier jobs — in other words, jobs created indirectly due to changes in local spending habits, often centralized around, but not limited to, local goods and services. Local multiplier jobs also often intersect with supporting industries. A great example of this is how sports sectors can benefit tourism and vice versa.

In reference to tourism, it is also notable that sports teams encourage travel and create a global presence. The better known a sports team is, the bigger the spotlight for its host. In marketing and media attention alone, this can serve as a huge advantage to a region. It places the region’s culture and people on a global stage and in an aspirational light, creating a legacy while opening the door to even more opportunity.

Culturally speaking however, the greatest benefits of owning sports teams and hosting sports events happen right at home. To start, nothing brings a community together more than rooting for the same team. It strengthens an individual’s sense of belonging to a community, building cohesiveness and a communal bond.

This, in turn, contributes to a tangible and prideful local identity, empowering individuals and businesses while boosting morale. While not as easily tracked, morale should be considered another form of currency when considering local multiplier effects as its momentum is exponential. Give a country a collective sense of hope and the possibilities are endless.

• Carla DiBello is a documentarian and founder and CEO of CDB Advisory, a bespoke consulting firm that bridges connections across private sectors throughout the Middle East and North America. 

Twitter: @CarlaDiBello