Major League Baseball Franchise Valuations
When the Los Angeles Dodgers sold for $2.15 billion last year, the purchase price — 54 percent more than prevailing estimates — didn't just elevate the fortunes of the team's owners. It raised the valuations of every franchise in Major League Baseball. Bloomberg News spent nine months compiling and analyzing the numbers behind the business, and determined that MLB's 30 teams are worth about 35 percent more on average. Below, a breakdown of how the teams stack up.
Published Oct. 23, 2013
The average value of a Major League Baseball team is $1 billion, according to data compiled by Bloomberg. The American League champion Boston Red Sox rank third at $2.1 billion and the National League champion St. Louis Cardinals rank 15th at $805 million. Here are the elements that compose the value of the league's 30 teams.
In calculating Major League Baseball team values, Bloomberg News examines revenue from tickets sales, concessions, sponsorships and broadcast rights, as well as interests in TV channels, radio stations and real estate.
Data for franchise valuations is provided by sports bankers, media consultants, municipalities, financial statements and people familiar with team operations. Calculations for the 2012 season are made available to each team and MLB for review and comment. Four teams didn’t return calls or e-mails. Sixteen declined to comment.
Those who responded include Bob Quinn, Molly Jolly, Lisa Pantages and Ken Stefanov, the chief financial officers of the Milwaukee Brewers, Los Angeles Angels, San Francisco Giants and Cleveland Indians, respectively. Larry Baer, the president and CEO of the Giants, and Bob Rose, the director of public relations for the Oakland Athletics, also commented, as did people with knowledge of five other teams who asked not to be identified because the team's financial information is private.
Under baseball's collective bargaining agreement between the owners and players, revenue from large-market teams is shared with smaller-region franchises. Revenue sharing calculations are based on a total pool of $360 million, according to Rob Manfred, the chief operating officer of MLB. Allocations to individual teams are based on information provided by MLB, former Toronto Blue Jays president Paul Godfrey, and Dennis Howard of the University of Oregon Warsaw Sports Marketing Center.
Baseball teams are valued based on multiples of revenue, according to Gerald Cardinale, managing partner of private equity firm RedBird Capital Partners and a co-founding investor of the YES Network. He said enterprise value, defined as market capitalization plus total debt minus cash, is the best way to quote team transactions.
Most MLB teams traded between 2.5 to 3.5 times sales in the last decade, with an average of about three, according to data compiled by Bloomberg. To determine a multiple for each team, tiers are used within this range, based on metrics identified by Max Chen, who valued sports teams at UBS AG and now manages New York-based hedge fund Crescent Capital Ventures LLC.
The Los Angeles Dodgers and New York Yankees are identified as outliers with higher multiples. Other sports bankers and lawyers who provided information or reviewed calculations include Joseph Ravitch of merchant bank Raine Group LLC, and six people who asked not to be identified because they are not authorized to speak about their knowledge of private MLB information.
Calculations for gate receipts and concessions revenue are compiled through an analysis of data made available by the Association of Luxury Suite Directors and Team Marketing Report Inc., as well as MLB attendance statistics. The Yankees' concessions totals are based on per capita spending information provided by Chris Bigelow of The Bigelow Companies Inc., a consultant to food and beverage service companies.
Gate receipt calculations include revenue from general and club seating as well as suites. For the Miami Marlins, it also includes parking sales, which the team packages with game tickets. Concession revenue is net of proceeds retained by concessionaires, such as Aramark Corp., Levi Restaurants LP and Centerplate Inc. Calculations account for in-stadium sales of food, beer and souvenirs, as well as royalties from merchandise sold in team stores within its home market.
Facility lease information for the 26 teams that do not solely own their stadium is obtained through the Marquette University National Sports Law Institute. Additional details on lease provisions for venues in Minneapolis and Phoenix are provided by the Minnesota Ballpark Authority and Select Artists Associates LLC, respectively.
Data pertaining to stadium financing is compiled by Bloomberg through an analysis of municipal, state and federal bond issuances, as well as information published by Harvard University associate professor Judith Grant Long.
The value of team-owned real estate is based on recent sales or property appraisals by city or county officials. The teams that have interests in their stadium and adjacent land are the Blue Jays, Boston Red Sox, Chicago Cubs, Los Angeles Dodgers and San Diego Padres.
Regional sports networks and radio stations are valued according to multiples of Ebitda and proportional to each team's equity stake. The multiples are based on past transactions or those of comparable companies in the same market. Calculations are based on information provided by SNL Kagan and the Canadian Radio-television and Telecommunications Commission.
The value of Sportsnet, a national cable TV channel in Canada owned by Blue Jays' parent Rogers Communications Inc., is based on the amount of programming attributable to the team, according to data compiled by Bloomberg.
Additional insight on TV markets and cable channels is provided by industry consultants Lee Berke of LHB Sports Entertainment and Media; John Mansell of John Mansell Associates Inc.; Ed Desser of Desser Sports Media Inc.; Neal Pilson of Pilson Communications Inc.; and Ted Shaker of the New York University Sports and Society Program.
The value of MLB Advanced Media LP, the league's digital operations, is based on a formula provided by Jeffrey Phillips, managing director of the valuations division of Stout Risius Ross Inc., an adviser to investment banks. Phillips said the calculation should be based on an Ebitda multiple of 17. Each team has a $110 million interest in the entity.
Since the value of MLBAM is accounted for in this manner, the business is not included as an element of the team's value elsewhere, in order to avoid double-counting in the total valuation.
No assumptions are made for one-time costs related to capital improvements or obligations to minor league farm teams.
Because calculating franchise value requires some estimation, a confidence rating also is included in each team's profile.
5 Star - The team or its parent company is publically traded, making financial information available. The team or a representative provides insight on the valuation.
4 Star - Detailed information about team finances is available from bankers or individuals with knowledge of the franchise. The team or a representative may provide insight on the valuation.
3 Stars - Detailed information about team finances is available from bankers or individuals with knowledge of the franchise. The team or representatives won't comment.
2 Star - Some information about team finances is available from individuals with knowledge of the franchise. The team or representatives won’t comment.
1 Star - Limited information about team finances is available. The team or representatives won't comment.
Bloomberg's Visual Data products are designed to run in the latest web browsers. For additional features we recommend using the current release versions of Chrome, Safari, Firefox or Internet Explorer 9+.
- Sort teams by
Regional Sports Network
MLB Advanced Media
2013 Season Results:
Value of an MLB's team's baseball-related activities, based on multiples of revenue and accounting for historical transactions and market demographics.
Regional Sports Network
Value of a team's stake in a regional cable TV network, based on multiples of earnings before interest, taxes, depreciation and amortization and historical transactions.
Value of team-owned enterprises, such as real estate, food and merchandise businesses and radio stations.
MLB Advanced Media
Value of limited partnership of MLB team owners that supplies content to Internet and mobile subscribers.
EDITORIAL: Peter Schwartz, Max Raskin, Scott Soshnick & Pamela Roux / Bloomberg News
GRAPHIC: Jeremy Diamond & David Ingold / Bloomberg Visual Data