A National Football League team today is a $6.5 billion business.

That is the average value of the NFL’s 32 franchises, according to CNBC’s Official 2024 NFL Team Valuations. Pro football teams have been a lucrative asset for owners in the most popular U.S. sports league: The returns they have seen on their initial investments dwarf the gains of traditional stocks over matching time periods.

Take, for example, the Houston Texans, No. 11 on CNBC’s 2024 value rankings. Back in 1999, the last time the NFL expanded, the late Robert McNair agreed to buy the rights to the franchise at a purchase price of $600 million, which takes into account payment structure and the value of a deal over time. The Texans are now worth $6.35 billion, more than 10 times McNair’s fee and three times more than the gains of the S&P 500 since that year.

That’s not bad for a team that has a record of 152-202-1 over its 22 seasons and has never made it to the Super Bowl.

And the Texans aren’t alone.

Across the past 10 NFL teams to be sold, seven of the 10 outperform the S&P 500 on a percentage-gained basis in the period since the sale. The Washington Commanders and the Denver Broncos — No. 13 and No. 14 on CNBC’s 2024 team valuations list, respectively — underperform broader market gains and, notably, were sold within the past two years. The Miami Dolphins, No. 8 on CNBC’s list, also lag the S&P, but were last sold in 2009 when the stock market was emerging from a bottom after getting pummeled during the 2007-08 financial crisis.

The escalation in football team values is largely the result of the league’s massive and growing media deals.

The NFL’s current television agreements with Comcast, Disney, Paramount and Fox, which began last season, are worth an average of $9.2 billion a year, 85% more than the previous deals.

Add in the streaming deals with YouTube for NFL Sunday Ticket and with Amazon Prime for Thursday Night Football, and the NFL is guaranteed an average of $12.4 billion a year through 2032 — almost double the $6.48 billion a year it collected during its previous media rights cycle.

On top of those bulk agreements, the league has been boosting its media revenue by selling additional streaming games.

Last season, the NFL sold exclusive streaming rights to a Wild Card playoff game to Comcast’s Peacock streaming service for $110 million, according to a person familiar with the deal.

The league sold three exclusive streaming packages for this season: two Christmas Day games on Netflix for a total of $150 million; a Wild Card game on Amazon Prime for $120 million; and an international regular-season game on Peacock for $80 million, according to the person familiar with the agreements. The league should get about $200 million for its commercial Sunday Ticket rights, which gets an array of NFL games into bars and restaurants, according to the person familiar with the matter.

All of those agreements combined bring total media rights fees to $357 million per team, up from $325 million in 2023.

CNBC sources requested anonymity to discuss the specifics of deals that aren’t publicly available.

A rising tide lifts all boats in the NFL. The 32 teams share the national media deal revenue evenly, along with money from leaguewide sponsorship and licensing deals and 34% of gate receipts. In 2023, $13.68 billion, or 67%, of the NFL’s $20.47 billion in revenue was shared equally.

When such large revenue sharing is combined with a salary cap that limits player spending to about 49% of revenue, teams in small markets such as Green Bay; Wisconsin; and Buffalo, New York, can compete with big-market teams in New York and Los Angeles. The small-market Kansas City Chiefs, No. 18 on CNBC’s 2024 valuation rankings, have won the past two Super Bowls and three of the past five.

But there is still a wide chasm in team values, largely due to stadiums. Teams do not share revenue from luxury suites, on-site restaurants, merchandise stores, sponsorships or non-NFL events at their stadiums.

Last year, that made a bigger difference than usual.

Pop star Taylor Swift performed at several NFL stadiums last year as part of her blockbuster Eras Tour, including Los Angeles’ SoFi Stadium, Tampa Bay’s Raymond James Stadium, New England’s Gillette Stadium and Philadelphia’s Lincoln Financial Field. One Eras Tour stop netted $4 million in revenue per show for the hosting stadium, according to a person familiar with the matter, who spoke on the condition of anonymity to discuss confidential information.

The Dolphins’ Hard Rock Stadium, also an Eras Tour stop, raked in more than $30 million last year from college football games, soccer matches, concerts, festivals and tennis matches — and it could double that this year, according to a person familiar with the matter.

The revenue sharing and salary-cap agreements also make the league very profitable.

During the 2023 season, the NFL’s 32 teams generated average revenue of $640 million and average operating income — earnings before interest, taxes, depreciation and amortization — of $127 million. The typical NFL team has an EBITDA margin of 19%.

Financial success for the NFL has meant higher premiums for team sales.

Two years ago, Walmart heir Rob Walton bought the Denver Broncos for $4.65 billion, or 8.8-times the team’s revenue. But these days, a prospective owner would be hard-pressed to pay less than 10-times revenue for a team. The average value-to-revenue multiple in CNBC’s 2024 ranking of all 32 teams is 10.2.

Last year, private equity billionaire Josh Harris purchased the Washington Commanders for $6.05 billion, or 11-times revenue. Earlier this year, a prospective owner looked into buying the Tampa Bay Buccaneers for about $6 billion, which would have valued the team at 9.4-times revenue, according to two people familiar with the matter.

Griffin also earlier this year offered $7.5 billion for the Miami Dolphins, or 11-times revenue, according to various media reports.

When teams do change hands, they have proven to be a smart investment.

The league’s most valuable team, the Dallas Cowboys, is worth $11 billion — 73 times what owner Jerry Jones paid for the team in 1989. The S&P 500 is up just 18-fold since Jones bought the Cowboys.

The Cowboys posted by far the most revenue of any team in the league last year, at $1.22 billion, and the most operating income, at $550 million, in large part because of sponsorship revenue. Dallas is approaching an NFL-leading $250 million in revenue from sponsors, according to CNBC sources.

The Los Angeles Rams, No. 2 on CNBC’s 2024 valuations list, were also No. 2 in revenue, with $825 million. The Rams were also second in the league in sponsorship revenue and brought in some serious money by hosting more than 25 nonfootball events at SoFi Stadium, including six sold-out nights of Swift’s Eras Tour and three of Beyoncé’s Renaissance Tour, as well as concerts for Ed Sheeran, Metallica and Pink.

The Rams, who were in St. Louis when sports and entertainment mogul Stanley Kroenke bought the team for $750 million in 2010, are now worth $8 billion. Even factoring in the $550 million relocation fee Kroenke had to pay the league to move the team to Los Angeles, as well as a $571 million settlement fee related to legal challenges for relocating, his investment is up more than four-fold.

The rise in NFL team values explains why private equity firms are chomping at the bit to invest in the league.

For several years now, Major League Baseball, the National Basketball Association, the National Hockey League and Major League Soccer have all permitted institutional investors to buy limited partner stakes in teams. European soccer leagues such as the English Premier League have also.

The NFL followed suit just last week. The league owners voted to allow a select group of private equity firms — Ares Management, Sixth Street Partners, Arctos Partners and an investing consortium made up of Dynasty Equity, Blackstone, Carlyle Group, CVC Capital Partners and Ludis — to take up to 10% stakes in NFL franchises. The firms committed $12 billion in capital over time, people familiar with the matter told CNBC.

Allowing private equity firms to invest in the league should make it easier to finance the purchase of a team.

Even the lowest-valued team on CNBC’s list, the Cincinnati Bengals, is worth $5.25 billion.

Factoring in the league’s maximum allowable debt of $1.4 billion, that leaves an equity burden of $3.8 billion. Assuming a general partner would hold the minimum required 30%, limited partners need to put in a combined $2.7 billion to get in the game.

Disclosure: Peacock is the streaming service of NBCUniversal, the parent company of CNBC.

Correction: This story has been updated to correct that a prospective owner looked into buying the Tampa Bay Buccaneers earlier this year for about $6 billion, according to two people familiar. An earlier version misidentified the interested party.