SBD/Issue 147/Franchises

Forbes' MLB Franchise Valuations: Yankees Top List With $1.3B

 
Revenue for MLB's 30 teams in the '07 season went up 7.7% to $5.5B, and the average team now is worth $472M, 9.5% higher than in '06 and 143% more than in '98, according to Ozanian & Badenhausen of FORBES. The Yankees again top the list of franchise valuations at $1.3B, followed by the Mets at $824M, whose new Citi Field "should push their value close to $1[B] before long." The Yankee brand alone is "worth $241[M], almost as much as" the entire Marlins franchise, and when the Yankees move into the new Yankee Stadium in '09, the team will be "worth at least $1.5[B] because of the rich bounty of sponsorship and premium seating revenue." Meanwhile, player costs during the past five seasons have "fallen to 56% of revenue from 66%," and as a result operating income "averaged over $16[M] per team for the second straight year." Only three teams "posted an operating loss" in '07, the Yankees, Red Sox  and Blue Jays. However, for the Yankees and Red Sox, the "huge dividends they get from their unconsolidated cable networks more than make up for the teams' losses." Meanwhile, Rogers Communications, which owns the Blue Jays, the Rogers Centre and Sportsnet, which televises the team's games, derives "huge benefits from owning the Blue Jays not reflected on its team's P&L statement" (FORBES.com, 4/20). The following lists MLB franchise valuations, with comparisons to '07 (THE DAILY).

RK
TEAM
VALUE* ($M)
1-YR % +/-
DEBT/
VALUE**
REVENUE ($M)
OPERATING INCOME^ ($M)
1
Yankees
$1,306
9%
77%
$327
-$47
2
Mets
$824
12%
97%
$235
$33
3
Red Sox
$816
13%
29%
$263
-$19
4
Dodgers
$694
10%
61%
$224
$20
5
Cubs
$642
8%
0%
$214
$21
6
Angels
$500
16%
7%
$200
$15
7
Braves
$497
9%
0%
$199
$28
8
Giants
$494
8%
28%
$197
$20
9
Cardinals
$484
5%
51%
$194
$22
10
Phillies
$481
5%
36%
$192
$14
11
Mariners
$466
7%
21%
$194
$10
12
Astros
$463
5%
12%
$193
$20
13
Nationals
$460
3%
54%
$153
$44
14
White Sox
$443
16%
9%
$193
$31
15
Indians
$417
14%
24%
$181
$29
16
Rangers
$412
13%
65%
$172
$17
17
Tigers
$407
14%
52%
$173
$5
18
Orioles
$398
1%
38%
$166
$8
19
Padres
$385
5%
45%
$167
$24
20
D'Backs
$379
12%
54%
$165
$6
21
Rockies
$371
17%
22%
$169
$26
22
Blue Jays
$352
2%
0%
$160
-$2
23
Reds
$337
10%
12%
$161
$19
24
Brewers
$331
15%
36%
$158
$19
25
Twins
$328
14%
27%
$149
$24
26
A's
$323
11%
28%
$154
$15
27
Royals
$301
7%
13%
$131
$7
28
Pirates
$292
7%
34%
$139
$18
29
Rays
$290
8%
14%
$138
$30
30
Marlins
$256
5%
34%
$128
$36

NOTES: Revenues and operating income are for '07 season. * = Value of team based on current stadium deal (unless new stadium is pending) without deduction for debt (Other than stadium debt). ** = Includes stadium debt. ^ = Earnings before interest, taxes, depreciation and amortization.

SOX ON THE RISE: In Boston, Tony Massarotti noted the Red Sox' value has climbed from $488M in '03 to $816M, as the Red Sox "continue to build a baseball Epcot, and Fenway itself has undergone massive changes." Massarotti: "The Sox have established their place as the [MLB] operation by which all other clubs are measured." The Red Sox owners are "making a killing [in Boston], whether they have the actual cash in hand or not," as the team is "being run aggressively and efficiently now" (BOSTON HERALD, 4/20).

Angels, Dodgers Have Seen Value
Increase Since Dropping Corporate Owners
CALIFORNIA DREAMS: In L.A., Bill Shaikin noted the Angels' value "shot up, way up," despite an offseason in which the team "did not land a lavish new television contract." The Angels also did "not unveil new luxury suites," although the team did "raise ticket prices but only modestly in comparison with other [MLB] teams in prime markets." Meanwhile, the Dodgers' value "has soared under new ownership too." Shaikin: "The Dodgers have turned double-digit losses under Fox into double-digit profits under the McCourts, and the Angels have turned consistent losses under Disney into consistent profits under [Arte] Moreno" (L.A. TIMES, 4/17).

SLOW START: CBSSPORTS.com's Ray Ratto wrote MLB owners "might be in for a hit this summer because everyone else is going to take one, at which point they will all tell you that Forbes is a bunch of lying liars and they're barely making ends meet. ... There are lots of small crowds out there in the early going, and it does make a body wonder whether this is just the standard school's-still-in, spring's-still-out market indifference that corrects itself as the weather warms up, or whether the oncoming recession is starting to show itself in the traditionally soft market of the Pirates on a Tuesday night." The new Nationals Park was "filled on Day 1, and has seen 30,000 fans just once since then, a record low for a ballpark honeymoon." Meanwhile, the Giants have gone from "40,000 a game to 30,000." And the Orioles are "barely clearing 10,000 a night." Ratto: "There are other examples as well, and they can all be explained with the traditional reasons -- it's early, it's cold, we stink." Meanwhile, NFL owners this summer will "be oddly silent because in bad times and worse, they'll still be doing great, because football is recession-proof, and has been for almost 50 years" (CBSSPORTS.com, 4/18).

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