MLB Franchise Values, according to Forbes
As you know, I follow a baseball discussion group that usually has some interesting stuff posted. What follows is a post by William Juliano, a Yankee fan by trade, and frequent contributor to that discussion group. Thought it might be of interest to you guys here:
“The latest Forbes Business of Baseball survey has been published
(http://tinyurl.com/2e5fpf). Not surprisingly, the Yankees still top the
list at $1.2bn, but the Mets have slipped by the Red Sox for the
number two slot. Here are a few more observations:
1)The Red Sox earned a profit of $19.5mn, versus a 2005 loss of
$18.5mn. Interestingly, the level of profit would have more than
covered the price tag of say Bobby Abreu, lending credence to my
assertion at the deadline that the Red Sox inactivity was more the
result of protecting the bottom line at the expense of the bottom of
the lineup.
2)The Florida Marlins earned a profit of $43mn thanks to a robust
margin of about 33%. The Devil Rays, Pirates, Brewers and Reds all
earned over $20mn in profit. It’s good to be a small market team.
3)Apparently thanks to a pending new ballpark, the Twins franchise
value jumped 33%, which was tops in the game (retraction anyone?).
The Cubs, Dodgers and Devil Rays followed closely behind.
4)According to Forbes, MLB teams collectively lost $57mn in 2003. In
2006, the industry earned a $496mn profit.
5)Local TV revenues accounted for 41% of total media revenue and
was one of the fast growing revenue segments. Considering that local
revenue is baseball’s biggest advantage over the NFL, maybe baseball
will pass football as the largest revenue generating sport in the U.S.?”
Thoughts? Rebuttals?
April 22nd, 2007 at 7:46 am
In today’s Springfield paper, they printed an Associated Press story discussing the Forbes findings. The author reported the Forbes figure that the Yankees showed a loss of $25.2 million in 2006 - and concluded that if they didn’t have to pay ARod, they would’ve made money. Moron. Where are the AP editors? As has been discussed ad nauseum, (a) ARod’s average salary is indeed $25.2 million over the ten-year deal, but (b) he’s “only” getting about $22 million this year, due to the structure of the contract, and most importantly (c) the Rangers are paying over $6 million of that, meaning (d) the Yankees are actually only paying ARod about $16 million, give or take a couple hundred thousand.
Also, I don’t believe the profit/loss numbers from the YES network are included in the Yankee “loss” figures - and I’m reasonably confident that the YES network manages to turn a profit. I’m not sure where to check, or if we can even confirm, but I suspect either (a) the “Yankees” charge the “YES network” like $1 for the rights to broadcast the games, or more to the point, some figure far less than could be had on the open market, or (b) there’s some other creative accounting which shows the Yankees losing money, and the YES network showing a 98% operating profit, or something like that.
And yes, I’m confident the Sox do similar things with NESN - cuz if they don’t, they’re morons. And they don’t strike me as morons.