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Walmart heir Rob Walton officially buys Denver Broncos football team for $4.65 billion

Yahoo Finance reporter Josh Schafer breaks down the $4.65 billion purchase Rob Walton made for the Denver Broncos.

Video Transcript

RACHELLE AKUFFO: Well, the Denver Broncos are finalizing the sale of their franchise to Walmart heir Rob Walton for a record setting $4.65 billion. Well, our very own Josh Schafer has been following this story. So, Josh, what have you learned about the sale and the price point specifically? Was it worth it?

JOSH SCHAFER: Yeah, Rachelle. So $4.65 billion, that's the biggest sale in NFL history. That's the biggest sale in North American sports history. And it's more than double what the Carolina Panthers were bought for in 2018. And it's a billion dollars more than what we thought the Broncos were worth, according to Forbes last year. So it sort of begs the question, well, did Rob Walton overpay for the Denver Broncos?

So I spoke to a few sources today. They all say, no, it's probably worth it. So one source, Sports Value Consulting founder and CEO, Michael Rapkoch, he helps investors sort of value these teams. He's worked with David Blitzer and Josh Harris, when they bought the Devils and the Philadelphia 76ers. And they value what the team's worth and if it's going to be worth that investment.

He says this is a good buy for Walton, and because, in his opinion, it's a buy and hold play. You're going to hold the team for several decades. And it's a diversification play in your investment portfolio. And that's so important for these rich investors because as we know, the stock market doesn't always go up, and it does have these downturns.

So his example was the Lerner family, which owned the Cleveland Browns. And if you see here, the Lerner family owned the Cleveland Browns from 1998 to 2012. That wasn't a great time period for the stock market during-- you had the dot com bubble that went down. You had the Great Recession that went down.

But look at this chart that we have now. NFL valuations didn't go down, really, during the Great Recession. They stayed stagnant, sure, but they didn't go down, so you wouldn't have lost money. The Lerners actually earned 14% return per year by owning the Browns through that time period. The S&P 500 guys returned just 2.3% during that time period. So it's a little bit of a diversification play. It's not saying, well, you're better off owning a team than investing in the stock market. But why not do both when you have enough money?