It’s a good time to be David Glass or Jim Crane, the owners of the Royals and Astros, respectively.
Mike Ozanian of Forbes reports the World Series winning Royals are now worth $865 million, a rise of 24% from last year, thanks to their smart investments in revenue-sharing proceeds. The Astros, thanks to a much-improved on-field product also jumped significantly, going from the 26th ranked team at $800 million to the 15th spot with a $1.1 billion estimation. The Cleveland Indians fell $25 million in team value while the Padres dropped from 19th to 23rd with no reported gain with $890 million.
The New York Yankees remain the most valuable team in baseball at an estimated worth of $3.4 billion, up from 2015’s $3.2 billion estimate, thanks to their association with the YES Network, MLS, and college football. The Dodgers check in at number two, with a $2.5 billion estimation, up from their $2.4 billion, largely thanks to their massive deal with Time Warner Cable SportsNet LA, which brought in $152 million in rights fees (though the viewership for the network remain disappointing due to ongoing carriage disputes).
The Boston Red Sox are also on the rise, going from $2.1 billion in 2014 to $2.3 billion in 2015 and ranking as baseball’s third-most valuable team. The San Francisco Giants ($2.25 billion) and the Chicago Cubs ($2.2 billion) round out the top five, while the Tampa Bay Rays remain the least valuable franchise at $650 million.
Ozanian writes teams are generating more non-baseball revenue, including land developments near parks. He said teams are more inclined to generate non-baseball revenue since the league pools 48% of its total net local revenue, while money earned by non-MLB projects isn’t taxed. The more clubs invest into non-MLB projects, the more money they make.
He does predict the upcoming expiration of the CBA will lead to changes which will be more specific about revenue sharing and how teams allocate funds because of teams such as the Padres and Marlins pocketing the money from the revenue pool instead of investing in payroll. He reports smaller market teams are relying more on MLBAM as a tool for revenue, as it’s become “very profitable” for teams.
League-wide, the average team is worth $1.3 billion, up 7% from a year ago, and a staggering 59% from 2014. Baseball continues to be a massive money making enterprise and it is only increasing, which is great news for owners.
[Forbes]
