Which Way Will Forbes’ Franchise Valuations Go?
23rd March 2006
One of the rites of Spring for many watching the business aspect of baseball, is when Forbes magazine releases its report of franchise valuations in early April. My apologies to any of the MLB owners and brass reading if they see this as a waste of time, but hey… you guys decided long ago not to open your books, so this is the best the public has got.
Since there’s always a ranking of how teams will finish in terms of Wins and Losses every year, I thought I’d do the same for franchise valuations.
Disclaimer: We all know how most of those rankings land, right? Just ask yourself how many had the White Sox winning the World Series. Don’t lynch me if Forbes sees things different than I…
According to last year’s report, the average value of the MLB franchises rose 13.46%. With Busch III coming online, the new Nationals stadium funding approved and sale just over the hill, the continuing improvements to facilities such as Wrigley, Fenway, Dodger Stadium, Rogers Centre and Tropicana Field, and new stadium development on the horizon for the Yankees, Mets, and Nationals, this trend should continue. Is it possible to see numbers close, if not over the 20% range? Yes.
Of the 30 clubs, only 2 had drops in value from the year prior:
- Yankees: -14%
- Athletics: -1%
The biggest gainers?
- Nationals/Expos: +114%
- Phillies: +39%
- Blue Jays: +27%
- Padres: 24%
On the Yankees… Forbes had them valued at $950 million last year. Mark this down… We could see the first franchise valued at over $1 billion.
Who might be the biggest gainers this year?
Here’s mine selections based on factors over the past year, and some guess work (in no particular order):
- Yankees
- Mets
- Brewers
- Nationals
- Cardinals
- Devil Rays
- Dodgers
- Red Sox
- Pirates
- Blue Jays
- Indians
- Angels
Here’s why…
As mentioned new facilities, or upgrades to facilities will always raise values. Media deals well, as well. The Mets get a double dose of this with plans for a new facility, and a new RSN. The Indians have an RSN now, as well. Both have recently signed carrier deals.
In the case of the Brewers and DRays, new owners working to turn around a morbid past. The Pirates have the All-Star game, which has increased ticket sales. The Angels should be getting out from under the “Name Game” case, and finalize their deal with FSN.
Who could post marginal increases, or drops in value from last year?
- Marlins
- Twins
- Mariners
- Tigers
- Giants
- Rockies
Here’s why…
The Marlins and Twins continue to struggle with attempts at building new facilities. The Mariners defied the odds last year in terms of attendance against their W-L record, and that’s already being reflected in sales this off-season. The Giants have Barry Bonds, which in the past was an asset, but now may be a liability, the Rockies continue to languish, as do the Tigers.
Who’s on the bubble?
- Royals
- A’s
- Diamondbacks
- Braves
Here’s why…
The Royals will be looking to two referendums on April 4th that could allow for either upgrades to Kauffman, and/or a rolling roof to cover the Truman Complex.
The A’s are working on increasing long range ticket packages by tarping off the upper deck of McAfee Coliseum, and the possibility of a new facility in Fremont.
The Diamondbacks have been claiming that they are aggressively looking to increase corporate interest, and regain some of their lost fan base over the past couple of years.
The Braves are up for sale, with media holding questions.
Here’s something to close with…
After last year’s Yankees valuation of $950 million, here’s where the upper echilon ranked:
- Red Sox: $563 million
- Mets: $505 million
- Dodgers: $424 million
- Mariners: $415 million
Think of that… the Yankees were valued at nearly double their nearest competitor.