SBD/March 24, 2011/FranchisesPrint All
The Yankees are MLB's "most valuable team for the 14th straight year," rising in value 6% to $1.7B, according to Kurt Badenhausen as part of FORBES' annual valuations. In '98, the gap between the Yankees and the No. 2 Orioles was 12%; today, the Yankees are 86% more valuable than the No. 2 Red Sox. The average MLB franchise is now worth $523M, an "all-time high and 7% more than last year." All of the league's teams "rose in value except for three:" the Mets, Padres and Indians. The increase in team values is the "result of greater revenue for teams playing in new stadiums." Overall, revenue for MLB's 30 teams increased 4% to $6.1B. Total operating income (earnings before interest, taxes, depreciation and amortization) fell 5% to $494M "as rising stadium (rent and operating costs) and team (marketing and player development) expenses ate into profits." The Padres ranked as the "most profitable team," with an operating income of $37M last year. The Padres "benefited from a revenue-sharing check of more than" $30M. Thanks to more than $400M "sent from high-revenue to low-revenue teams," several clubs with low attendance "were able to post operating profits of at least" $10M, including the Pirates ($25M), Royals ($10M), A's ($23M) and Marlins ($20M). Only three teams had a negative operating income last year: the Tigers (-$29M), Mets (-$6M) and Red Sox (-$1M) (FORBES.com, 3/23).
INCOME1Yankees$1.7B6%4%$427M$25.7M2Red Sox$912M5%26%$272M-$1.1M3Dodgers$800M10%54%$246M$32.8M4Cubs$773M6%75%$258M$23.4M5Mets$747M-13%60%$233M-$6.2M6Phillies$609M13%29%$239M$8.9M7Giants$563M16%21%$230M$29.9M8Rangers$561M25%66%$206M$22.6M9Angels$554M6%10%$222M$11.8M10White Sox$526M13%8%$210M$27.6M11Cardinals$518M6%53%$207M$19.8M12Twins$490M21%20%$213M$26.5M13Braves$482M7%0%$201M$22.2M14Astros$474M5%12%$197M$14.4M15Mariners$449M2%15%$204M$9.9M16Nationals$417M8%60%$194M$36.6M17Rockies$414M8%19%$188M$16.3M18Orioles$411M9%37%$175M$25.5M19Padres$406M0%49%$159M$37.2M20D'Backs$396M4%25%$180M$6.2M21Tigers$385M3%55%$192M-$29.1M22Brewers$376M7%32%$179M$12.4M23Reds$375M13%11%$179M$20.1M24Marlins$360M13%40%$143M$20.2M25Indians$353M-10%31%$168M$12.1M26Royals$351M3%14%$160M$10.3M27Blue Jays$337M3%0%$168M$3.6M28Rays$331M5%35%$166M$6.8M29A's$307M4%29%$161M$23.2M30Pirates$304M5%42%$160M$24.6M
BRAVES ON THE BLOCK? FORBES wrote it "appears as though Liberty Media is preparing to unload the Braves." The tax advantages to Liberty's purchase of the Braves from Time Warner Cable in '07 "expire after five years and ownership has slashed player payroll from $102 million to $84 million since 2008 despite higher revenue" (FORBES.com, 3/23). Liberty Media "has not announced any plans to unload the Atlanta team," but Liberty Chair John Malone is "famous for making use of tax advantages, and he has said Liberty Media doesn't consider the baseball team a strategic asset" (BIZJOURNALS.com, 3/23).
FOR WHAT IT'S WORTH ... In San Diego, Bill Center reports Padres President & COO Tom Garfinkel yesterday "took exception" to Forbes' contention that the Padres "had a major league-leading operating income of $37 million last season." Garfinkel: "The financial numbers in the Forbes article are inaccurate. I'm not sure where they get financial numbers for 30 private businesses without simply manufacturing them. The team lost money on a cash basis in 2010." Garfinkel added of Forbes, "Their valuation methodology is flawed and their numbers are inaccurate. Therefore, their valuation conclusions have no merit" (SAN DIEGO UNION-TRIBUNE, 3/24). Meanwhile, in N.Y., Josh Kosman cites a source following the bidding process for a stake in the Mets as saying that Forbes' $747M valuation of the club "sounds just about right." The team "attracted only 2.6 million fans last year," and the source predicted that the total "will drop to 2.25 million this year." The source added that such a slide "would mean a $60 million loss" (N.Y. POST, 3/24). Smith College sports economist Andrew Zimbalist, when asked if the Forbes report would impact efforts to sell a minority stake in the Mets, said, "These numbers have a little bit of currency in the sports world. Owners will look at them and will cite them, but after they look at them and cite them they'll make their own judgments about what a team is worth" (NEWSDAY, 3/24).
DARK CLOUD OF DEBT: FORBES.com's Burke & Vardi write there is a "dark cloud threatening" MLB. The Mets and Dodgers, "two of the most important franchises in baseball, are in financial turmoil because of the debt-fueled financial recklessness of their owners, left unchecked by the league." The Mets' mess "has already affected the value of the team ... down 13% from last year, the biggest drop of any MLB franchise." And while the value of the Dodgers is up from $727M to $800M, the team's debt load is a "whopping 54% of its overall worth." MLB Commissioner Bud Selig "now faces the possibility of becoming known as 'the Debt Commissioner' for the ballooning of franchise IOUs under his tenure and for letting teams sidestep league rules on debt limits." One MLB exec with knowledge of the Mets' and Dodgers' finances said, "This is a very serious issue. These are two of the flagship franchises in all of sports. This situation is going to infect all of baseball." But MLB Exec VP/Labor Relations & HR Rob Manfred "claims the league watches the debt of its members closely." Manfred: "Nobody outside the game knows what was done or not done with respect to any individual club" (FORBES, 4/'11 issue).
The Indians today are introducing a new suite of social media initiatives for the '11 season, including the creation of the Indians Social Suite, a Progressive Field suite catering exclusively to social media users. It replaces the previous Indians Social Deck in the stadium bleachers. The Social Suite holds 12 people per game, and admission is strictly on an invite-only basis following online applications. Fans can apply for invitations to the Indians Social Suite at indians.com/connect. The franchise also is rolling out a series of ticket discount offers for Twitter and Facebook users and is launching Twitter feeds for President Mark Shapiro (@MarkShapiro) and Exec VP & GM Chris Antonetti (@IndiansGM), joining an existing feed from manager Manny Acta (@mactriber_11). The Indians additionally are working with MLBAM to allow for further price discounts by implementing a check-in feature through the At The Ballpark section of the MLB.com At Bat 11 mobile application (Eric Fisher, SportsBusiness Journal).
MISTAKES ON THE LAKE: BASEBALL AMERICA's Tracy Ringolsby wrote the Indians' front-office mentality "has not worked" since former GM John Hart left after the '01 season, although team Owner Larry Dolan "praised for his loyalty, has not wavered in his support of the team's management." A series of "bad drafts have stripped the once-rich Indians farm system of talent," and when Shapiro "began dealing established players for payroll reasons, he wasn't able to land impact prospects in return." Dolan's "non-baseball interest is a law firm, which doesn't generate the type of revenue to provide a financial safety net for baseball losses." As a result, the "bottom line is at the forefront in decision making." Ringolsby noted "times certainly have changed" for the Indians, who sold out a then MLB-record 455 consecutive games from '95-'01. The club has produced just two winning seasons in the past nine, and "in five of the past eight years, they have failed to reach the 2 million mark in attendance." Last season, the Indians drew an MLB-worst 1.39 million fans (BASEBALLAMERICA.com, 3/22).
Manchester United has taken the "extraordinary step of suing one supporter over action he took to oppose the Glazer family’s ownership" of the EPL club, according to Jonathan Russell of the London TELEGRAPH. Attorneys acting on behalf of the Glazers have "filed a writ at the High Court accusing Thomas McKenna of damaging United’s business by posting the names and addresses of 400 of its corporate clients on the internet." The case states that McKenna "published the list in a campaign to stop companies renewing their membership in an attempt to put pressure on the unpopular Glazers, who took over at Old Trafford in 2005, to sell their stakes in the club." ManU contends that it has "not identified who supplied" McKenna with the information, and now club officials are suing McKenna "for 'losses and damages' they claim the club suffered as a result of its client information appearing on the website wewantglazerout.com, the public face of anti-Glazer group United Supporters for Change." The website "published the list of 400 United corporate clients" in April '10. ManU officials "denied the information could have come from a senior executive, but admitted they had not identified the source of the leak." There is "no value set on how much the club expects to recover if its claim is successful" (London TELEGRAPH, 3/24).
MAKING PLANS FOR THE SUMMER? MLS Fire officials "were mum Wednesday" about reports that ManU's summer tour of the U.S. would include a game against the Fire in Chicago on July 23. A Fire spokesperson said, "Our summer plans, if any, are still up in the air and still being finalized." Likewise, a ManU spokesperson "would not confirm tour details, or even if a U.S. trip is being considered" (CHICAGO TRIBUNE, 3/24).
Browns CB Joe Haden said that he and his teammates are "working out hard -- often together -- and staying ready for whenever the NFL lockout ends," according to Mary Kay Cabot of the Cleveland PLAIN DEALER. Haden is "mostly working out at home" in the DC area. But he also has "gone to California to train with fellow Browns defensive backs T.J. Ward and Eric Wright," and they have "traveled to Florida to condition with" S Abe Elam. Haden said that unlike QB Colt McCoy, who "received an offensive playbook from the Browns," the defensive players are "operating without one despite" the team shifting to a 4-3 defense (Cleveland PLAIN DEALER, 3/23). In Nashville, John Glennon noted Titans CB Cortland Finnegan, S Chris Hope and TE Craig Stevens "hit the field and weight room at Father Ryan High School" on Monday. Tennessee-based Art of Strength GM & Dir of Training Scott Reall "will be guiding the Father Ryan-based Titans through multiple weekly workouts." The players "hope to grow the list of attendees to as many as 15 to 20 in the weeks to come, as they seek to remain in peak condition despite the NFL lockout that is keeping them from using team facilities" (Nashville TENNESSEAN, 3/22).
NOT TOO ABNORMAL: Jets LB Bart Scott is "training at TEST Sports Clubs" in Martinsville, N.J., with several teammates, and he said, "The only unfamiliar thing to me would be if we don't have OTAs. Right now, we're not missing out on anything except free agency. Everything else, I don't think it's panic time yet. Technically, if the lockout were over with after the draft, really what have we missed? Some workouts." But he added the "later it gets, then you have to start deciding what you're going to do." Scott: "When are you going to make the transition to doing football moves and stuff?" (Newark STAR-LEDGER, 3/22).
RULE BREAKERS: In Dallas, Gerry Fraley reported the Cowboys are among the "group of five teams that have been fined by commissioner Roger Goodell for having contact with players during a 'dead' period." Several Cowboys players "mentioned getting together with new defensive coordinator Rob Ryan to get a jump-start on his system," which is a "violation of NFL rules." The Dolphins, Browns and 49ers are "also believed to have violated the rule" (DALLASNEWS.com, 3/23).
ROAD TRIP: In St. Louis, Jim Thomas reported it is "looking more and more like the Rams will hold training camp outside of St. Louis this summer" if a new CBA is reached. Rams coach Steve Spagnuolo said the team is "looking at" holding training camp at the Missouri Univ. of Science & Technology in Rolla, Mo. Southern Illinois Univ.-Carbondale "is also believed to be under consideration." Spagnuolo: "We're researching it now and we've probably got to get moving on it and have something finalized here in a month or so." Thomas noted the Rams "stayed in St. Louis for Spagnuolo's first two training camps, both held at the team's Rams Park facility" (STLTODAY.com, 3/23).
ESPN.com's Pierre LeBrun wrote the "ownership uncertainty of the Phoenix Coyotes, which has dragged on for two years and resurfaced with a vengeance in the past month, hasn't slowed down the players on the ice in the final few weeks of the regular season." The Coyotes have gone 7-1-1 in their last nine games and are currently in fourth place in the Western Conference. Coyotes RW Shane Doan said of the ownership situation, "It's almost like you never see it ending at this point. It's been two years of this. But obviously it finally will end at some point, and we're looking forward to it." Coyotes GM Don Maloney added, "It's the last two to three weeks that the off-ice issues with the franchise have become front and center, at least to me, and even within the team. ... I don't think any of us would have thought this saga would have played out this long" (ESPN.com, 3/22).
PLAYOFF TRIP A MUST: In Ft. Worth, Mac Engel writes hockey in North Texas "isn't dead, but it sure feels like it." The Stars, who are currently run by the team's creditors, are in "dire need of creating a perception they are moving in the right direction and are a commodity worth buying, either from a fan's perspective or for the new owner." Engel: "The season ticket base is under 11,000. Probably a lot more than that, too. The potential buyers of the franchise thus far have underwhelmed the bank. And the bank isn't selling until it gets the price it wants." The "only way these realities begin to change is immediately." The Stars are one point out of the final playoff spot in the Western Conference, and Engel writes the team must "make the playoffs." Engel: "Failure to do so delays this entire process by another calendar year" (FT. WORTH STAR-TELEGRAM, 3/24).
FOR THE LOVE OF THE GAME: In Sacramento, Dale Kasler writes if the NBA Kings "leave Sacramento for Anaheim," Ducks Owner Henry Samueli "will be a big reason why." Samueli is "trying to wrap up negotiations with the Kings' owners, the Maloof family, on a deal to move the team to the Honda Center, which Samueli manages." He is a "scientist, businessman, philanthropist -- and basketball junkie." When he bought the Ducks in '05, he said, "I would love to lure an NBA franchise." Kings co-Owner Joe Maloof said that Anaheim "has made overtures to the Kings before." But Kasler writes Samueli's "presence makes it more likely Anaheim will succeed this time" (SACRAMENTO BEE, 3/24).
WARRIOR WILL SURVIVE: In S.F., Rusty Simmons reported "most signs point toward Larry Riley returning as the Warriors' general manager next season, because he has a good working relationship with, and the respect of, the new ownership." Riley said the "growth of the organization under" co-Owners Joe Lacob and Peter Guber "will allow me to schedule things better and give me a more reasonable time frame to approach (prospect) evaluations." Riley: "I think I'll be allowed to schedule things better next year, and I'll be able to accomplish the same things with more convenient logistics" (S.F. CHRONICLE, 3/23).