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Home MLB News Forbes Releases ’07 MLB Franchise Valuations

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Forbes Releases ’07 MLB Franchise Valuations PDF Print E-mail
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Written by Maury Brown   
Thursday, 19 April 2007 10:50

MLBForbes Magazine has just released its annual valuation rankings for all 30 of the MLB clubs today, with the Yankees chiming in at a cool $1.2 billion. The Mets jump into second place in the rankings at $736 million, pushing the Red Sox into third with a valuation of $724 million.

The annual valuations will come with the customary reply from MLB about how the figures are off. And while this is certainly the case, this year sees two figures that jumps out as being well off the mark for this author.

Forbes valuates the Cubs (with Wrigley Field) at $592 million and the Braves at $458 million. While the value of the Braves is close (analysts predict just north of $460 million), the Cubs could easily flirt with (get this) in excess of $800 million when Wrigley Field and 25 percent of SportsNet Chicago is taken into account according to the Sports Business Journal. When you add in the supply and demand aspect of owning the storied franchise, the club could easily top the prior total sale high water mark set by the Red Sox sale in 2002.

The club with the largest valuation jump? The Twins at 33 percent more than the year prior. Chalk up the final steps to a new stadium as the reasoning for the increase.

But, who’s the biggest winner in the ownership game according to Forbes? None other than David Glass and the Kansas City Royals. Glass gets the winner for accepting the most welfare money from his ownership counterparts via revenue-sharing. As reported in A Royal Mess:

Glass has profited from rich handouts under the league's revenue-sharing program, imposed in 1997. Each year teams contributed 34% of their revenue from ticket sales, parking, concessions and local broadcast rights (minus stadium expenses) to a pot that then got redistributed to the weakest teams. In 2006, $326 million was paid out to the losers.

Thus the Royals' annual collections from this socialistic setup have doubled since 2002, to $32 million last season (of a total $123 million in team revenue that year). But the team's player costs inched up only 6% to an estimated $65 million in that same period. Thus the losing Royals have turned an annual profit of close to $10 million a year (earnings before interest, taxes, depreciation and amortization).

Not unexpectedly, Glass declined to comment to Forbes for the article.



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