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.

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.

The Rams, owned by developer Stan Kroenke, saw a 34% value increase from a year ago, tying them with the New York Giants for the biggest year-over-year jump.

“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.

Cowboys chief operating officer Stephen Jones, Cowboys owner Jerry Jones and Rams owner Stan Kroenke talk before a preseason game at SoFi Stadium Saturday. The Cowboys and Rams are the two most valuable NFL franchises, according to a new Sportico report.

(Allen J. Schaben/Los Angeles Times)

“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.”

The Rams join the Lakers as the city’s second sports franchise with a valuation of at least $10 billion.

The Chargers, who are tenants at the Kroenke-owned SoFi Stadium, are 21st on the 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. 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.”

Check back soon for updates on this developing news story.