Apr
17

How much is that baseball team in the window?

By

Via Maury Brown, we learn that Forbes this week released their annual Business of Baseball report. Why is this relevant to us Yankee fans? Well, because the team is worth $1.3 billion, tops in the league by nearly $500 million.

Forbes’ list of baseball franchises shows the Yanks atop a list of the usual suspects. At $1.306 billion, the Yanks’ valuation puts them ahead of the Mets ($824 million), Red Sox ($816 million), Dodgers ($694 million), Cubs ($642 million) and Angels ($500 million). The Marlins and Rays at $296 million and $250 million respectively hold up the list from the bottom.

While the Yankees’ worth increased by nine percent over 2007, no Major League team saw their value decline. The Orioles and Blue Jays saw one and two percent grown respectively, but it is safe to say that baseball as a business is booming.

On the revenue front, the Yanks have a clear advantage over their competitors. Astheir franchise breakdown shows, the team draws in $171 million worth of gate receipts alone. Factoring in unparalleled attendance numbers, brand management and concession sales, the Yanks are rolling in the dough to the tune of $327 million in 2007 revenue. The Red Sox took in $262 million. Those figures for the Yanks should only increase as the Yanks move across the street to their high-falutin’ new digs next season.

Interestingly, the Yanks — along with the Red Sox and Blue Jays — operated at a net loss. The AP tells us why:

The Yankees were listed by Forbes as having $327 million in revenue last year and a $47.3 million operating loss, up from a $25.2 million loss on revenue of $302 million the previous year. Forbes’ revenue figure is after deducting revenue sharing payments, which the Yankees estimate at about $92 million. The team also paid approximately $24 million in luxury tax, which is reflected in the operating loss.

Now, as far as I understand it, these valuations do not include YES Network estimates and revenues, all of which feed the Yankee Empire. From what we’ve heard over the last few months, the YES Network could in fact be worth more than the Yankees. Considering that George Steinbrenner and his group of investors bought the team from CBS in 1973 for a measly $10 million — approximately $48 million in 2008 — that is a pretty stellar investment all around.

Categories : News

15 Comments»

  1. barry says:

    That’s just ridiculous. The crazy part is I bet they make more people from people like me who watch YES all day long.

  2. chris says:

    remember before the strike all of the small market teams whining about a competitive disadvantage. funny how now that they are making 30 million dollars per year they don’t seem to be too bothered by it.

    its a joke to see the marlins turning such a tidy profit and still field a team of little leaguers. if these teams continue to stick revenue sharing money into their pockets instead of fielding real teams than they should be out of baseball – at least make them open their books and show how they spending revenue sharing dollars. i dont mind the yankees giving money to small market teams for the benefit of the league, but that money has to be spent on players

  3. mustang says:

    OK. Can we now not ever mention money when it comes to the Yankees getting a player. They have to watch the payroll, please spare me.

    CHRIS- I could not I agree with you more. This is something that should be looked at in the next Collective Bargaining Agreement.

    • Ben K. says:

      Considering that they are, technically, operating a loss, these numbers bolster the claim that the Yanks need to watch payroll. As long as they continue to increase payroll, they will continue to dole out more for revenue sharing and operate a greater loss. That’s bad business.

      • Steve S says:

        Revenue sharing and how much their payroll is are completely different issues. They will have to pay revenue sharing forever, the payroll is only connected to the luxury tax which is dwarfed by the amount they do give in revenue sharing. The only way they wouldn’t have to give as much in revenue sharing is if they decided to put all the games on WPIX and no one showed up at the ballpark, and they give back whatever stadium/ team sponsorships agreements they have entered into.

        Not to mention the fact that YES is included in their balance sheets. However, since YES is not a wholly owned subsidiary of the New York Yankees, they cant regard all of the profits made by the YES Network as belonging to the Yankees. The Yankees probably put in a percentage of the revenues from YES (which Mustang, is largely owned by Goldman Sachs). Its debatable whether YES and the Yankees operate in unison when it comes to these things, especially when Goldman is a publicly traded company and should offer some transparency as to the operations of YES. I really dont feel like looking so Im speculating

  4. mustang says:

    The key words in your statement is “technically, operating a loss”. We all know that not to be true. You stated that much in this thread.

    • steve (different one) says:

      you are correct.

      but right now, MLB allows the Yankees to not include the profits from YES in the revenue sharing calculation.

      what would happen if the Yankees were to start paying for an increased payroll with profits from YES? MLB could demand that the Yankees, and other teams with their own networks, open ALL their books to MLB auditors.

      NO ONE wants that to happen.

      so, for all intents and purposes, there is an (albeit artificial) limit to the Yankee payroll.

      the Yankees will always have the highest payroll. the goal is to not have $50M of bad contracts on your books every year.

      no one wants the Yankees to stop spending, just to spend smarter. that’s what they are trying to do.

  5. mustang says:

    Aren’t they also getting some kind of break on the luxury tax next year do to the new Stadium ?

  6. mustang says:

    CNN Money-Fortune:
    Of course, the Yankees are responsible for $51 million a year in debt service. Yet even that expense comes with a silver lining: It will help reduce the Yankees’ revenue-sharing obligations. Baseball’s 2002 collective-bargaining agreement permits teams to deduct stadium debt service and construction costs when calculating revenue sharing. Bottom line? Baseball’s 29 other teams will effectively bear a third of the cost of the Yankees’ new ballpark. “It’s a classic tax shelter,” one baseball insider says. “Not only do you get the benefit of added revenues, but you get a major revenue-sharing deduction as well”

    Ladies and Gentlemen of the jury I rest my case. Thank you.

    • Rob_in_CT says:

      Regardless, there is a limit somewhere.

      Anyway, if it’s Santana you’re hung up on, it wasn’t the money. It was the money PLUS the prospects, emphasis on the prospects. Hughes+IPK+? or Wang+IPK (insanity!) or whatever, depending on which account of the negotiations you believe.

      If he’d been a free agent, the Yanks would’ve been all over it.

      As for revenue sharing and the luxury tax… imperfect solutions to difficult problems. I hope they come up with a better way. My way would involve more sharing, balanced by changes to the draft… and some mechanism for booting terrible owners. That’s pretty vague, I’ll grant.

      • mustang says:

        My whole point here his that money should never be a obstacle to get a deal done for the Yanks. If they didn’t want to give up the prospects find, but to talk about Santana’s salary when they payed 42 million for AAA pitcher, that’s insanity.

  7. tommiesmithjohncarlos says:

    I think the thing most shocking in all of this is that the Marlins and Rays are both valued at more than a ham sandwich.

  8. Geno says:

    I think the Yanks being more fiscally responsible will actually result in the team being better in the long run. It seems to me that this mind-set will force us to carefully think things through. It’s like chess. We’re biding our time, getting our pieces into place for a larger plan. The old way of breaking the bank every year on free agents had us constantly off balance, out of whack, unsettled. We can still sign a top free agent from time to time, but those new players will be pieces of the larger plan, not the plan itself.

  9. Tommy says:

    Not sure which is more surprising: that the Yankees are worth almost as much as YouTube, or that YouTube is worth more than the Yankees.

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