Oct
23

Bloomberg: Yankees valued at nearly $3.3 billion

By

Via Peter Schwartz: The Yankees are currently valued at an estimated $3.28 billion, the highest of any franchise. The Dodgers are a (very) distant second at $2.1 billion. “The Yankees are as successful as you can possibly be,” said Lee Berke, a sports media consultant. “It’s the culmination of a perfect storm coming together: the nation’s number one market, professional sports’ most successful team and tremendously savvy and aggressive ownership.”

That $3.28 billion is broken down into the team itself ($2.09 billion), stakes in the YES Network ($932M) and MLB Advanced Media ($110M, same for every team), and related businesses ($148M) like Legends Hospitality. The team’s net loss in revenue sharing was $97M last year. The full breakdown, including revenue sources and whatnot, is available in this fancy infographic. The value of the Yankees has nothing but go up in recent years, from $1.6 billion in April 2010 to $1.7 billion in March 2011 to $1.8 billion in March 2012 to $2.3 billion in March 2013. What, you didn’t think the Yankees were losing money, did you?

Categories : Asides
  • Pinkie Pie

    “…tremendously savvy and aggressive ownership.”

    Meh. I’d put more emphasis on the aggressive than the savvy. While Yankees ownership has been responsible for some of the their more successful recent transactions, they’re also the ones who saddled the team with A-Rod’s egregious contract. It’s also ironic that this team’s value is peaking at the same time it’s product on the field has been it’s worst in 20 years.

    • Fin

      Yea, probably not very savy taking a $10m business and turning into a $3b business. I don’t think they were exclusively referring to what the Yankees accomplished on the field but also their foresight to create the YES network and other business decisions. This wasn’t so much of an article about baseball but business.

      • Pinkie Pie

        Obviously I was only commenting with regard to their handling of the team itself. Otherwise the Steinbrenners have done great for themselves. That goes without saying. They created by far the most successful regional sports network in the country. Nevertheless, the on-field success of the team and it’s economic status aren’t mutually exclusive. The considerable dip in both attendance and YES ratings due to the team’s increasingly gloomy performance and outlook aren’t helping the team’s profits, and the situation isn’t being helped by the Steinbrenner’s recent strides toward a tight budget.

        • Havok9120

          Dude, they still ranked 4th in overall attendance and were one of only five or six teams with substantially more than three million tickets sold. The downtick in attendance was league-wide. I can’t speak to TV ratings comparatively, because I’m unaware or any public sources for such, but it’s unfair to expect anyone to knock them for poor business decisions before those decisions actually produce bad results.

  • Fin

    Its probably worth even more than that if the Stiens ever decided to sell. Once you get a few multi billionaires bidding against eachother.

    Wondering if this talk about staying competitive taking precedence over the $189 is coming as the Stiens realize that people will not come to Yankees games or watch them if they are not competitive. I think Hal may have thought that he could run the Yankees on the cheap (cheap being in regards to what has become the Yankees norm). Then attendance and YES ratings tanked this year. LOL, that hasn’t seemed to effect the Yankees value. However, a few years of that and it certainly would.

    I keep expecting to hear that the Stien family is going to sell the team, but I am starting to think that Hal is digging being in the man in NY. Always the question though, does being in the Yankee business generate enough money to keep all the heirs happy, would only take a couple of them to want to cash in and it could be out of Hals hands.

  • Frank

    Even more pathetic that they purposefully downgraded the team this season, and will do so next year too.

    Meanwhile, they remain the most profitable by far.

    • meowmix

      yankees are not the most profitable by far. there not even the most profitable.

      yankees operating income was 1.4 million in 2013, and that’s before interest, taxes, depreciation.

      being the highest valued team doesn’t equal most profitable.
      the rays had an operating income of 10 million, and are the lowest valued team in baseball.

      • Mr. Roth

        Baseball operating income is not the only thing the Yankees make money on. In fact, baseball operations has operated at a loss in several of the past few years. Legends Hospitality and the YES network are the places where the Yankees make their money.

        YES generates upwards of $200 million in operating income annually. Legends Hospitality makes upwards of 15-20 million in operating income annually.

        So while it is true to say that Yankee baseball operations aren’t the most profitable, it is also true to say that the Yankees are one of the most profitable franchises.

        • Need Pitching & Hitting

          Technically, the Yankees aren’t one of the most profitable franchises, but Yankees Global Enterprises, which owns most of the Yankees, is a very profitable business.

          • Fin

            Non of us know shit. They could be by far the most profitable, or the least profitable. They are all private companies with outside sources speculating on every aspect of the organization. It seems to me, that every team is very profitable. I happen to think they all operate with gigantic profit margins. Maybe a team like Detroit is not making much money, with an older owner pushing to not only win a WS but reviatalize a city. Other than that, I think all these owners are generating a lot of yearly income for themselves.

            • Havok9120

              No, none of us “know” anything. But all available data indicates that while baseball teams are a safe and profitable investment it _isn’t_ as profitable in and of itself as many on here have been claiming during the complaints about 189.

              • Chris Z.

                We know more than you think. The Yankees just won a suit in which they had to disclose financial documents to show damages. The suit was over the name “evil empire”. I believe the time frame was from 2003 until 2010ish the Yankees made roughly 100 million dollars in merch sales. JUST MERCH SALES. They make a tremendous amount of money. Basically they sold enough hats in one year to cover Rivera’s salary for a year. Think about that.

                We are arguing about profit margins here. While important the real important number is how much money rolls in before they decide to spend it. Since the books are closed we can’t know for sure but I’d bet they make more money than the bottom 10 teams combined. Reducing the payroll to get under the tax would increase their profit margin exponentially! Depending how they spend it or invest it in other businesses the team could then increase payroll to well beyond 250 million.

                I don’t fault them for wanting that extra 20+ mill over the next few years. They have smart people working to increase their profits every year and investing another 20 mill here and there could mean they have 30+ mill to put on the field in 2015.

              • ChrisS

                While owners whine about not always making a profit every year, they make their money on the franchise when they sell. And not to mention that the teams are generating revenue for ownership groups from so many different sources, it’s pointless to use basic team revenue minus payroll to establish what the annual profit is.

                Carl Pohlad always complained that he couldn’t turn a a decent yearly profit on the Twins, but the old codger certainly wasn’t interested in selling (until MLB offered to give him a huge payout to contract the team). He knew where the bread was buttered.

                Frank McCourt took a successful franchise, ran it into the ground, used it as his family’s personal ATM, and still sold it for a $1.7 billion dollar gain after just 8 years ($220m / year).

                Baseball is a monopoly and a franchise located in a major market is always going to increase in value regardless of whether it makes an annual profit.

  • Pseudoyanks

    Interesting how recently some decisions are made that enhance the value of the franchise rather than the competitiveness of the baseball team. (Ichiro 2 year deal, horrible from a baseball standpoint but probably quite profitable for the Yankees…selling lots of Ichiro jerseys, etc.)

    • kenthadley

      Welcome to Hal’s Brave New World.

    • pat

      Merchandise sales are pooled and split between all teams. Very large misconception. Teams only keep what’s sold at the stadium.

      • Hoosa

        Regular season tickets sold to those wanting to watch Ichiro are not.

        I think y’all should look at what players were brought in this year to plug holes, and come to grips with similar ‘names’ being in your future. I actually see similarities to the CBS years because, although CBS’s fault was not wanting to pay out, the bottom line with both regimes is the almighty buck. Screw the game, and winning? lol

        • Mr. Roth

          “I think y’all should look at what players were brought in this year to plug holes, and come to grips with similar ‘names’ being in your future.”

          Right, I’m sure you have some insider information that leads you to this conclusion.

          No, of course you don’t. This is just some wild allegation that you pulled from the deep orifices of your ass so that you can pretend like you’re some sort of clairvoyant.

        • umbrelladoc

          Ichiro is not going to justify his contract with T-shirts or ticket sales. To some extent, it’s also about the in-stadium advertising. But, I think the real value is maintaining the Yankees brand in Japan. Keeping the Japanese media following the Yankees, protecting the position as the premier franchise in people’s mind.
          http://online.wsj.com/news/art.....3166163308

          • Chris Z.

            Bingo.

            The team could care less probably about his overall performance because they could plug the hole in other ways. We saw it this year! If Ichiro was hitting .290 and had an OBS of 333+ then Soriano would probably not be here.

            They LOVE the idea of being the world’s baseball team.

  • Kvothe

    Well, value of the franchise doesn’t necessarily translate into cash flow, so depending on what the actual revenue/net income of the team is and what kinda cash reserves the Steinbrenners have, that may be a reason for the “austerity.”

    • Fin

      Certainly its just my opinion. I’ve felt that the $189 was at least related to more people getting money from the Yankees now. Before, George got the money and shared with his kids as he saw fit. Now you have multiple, what 3 or 4 people at least taking their cut in the Stien family. Part of why I thought the team would be sold. None of us have the foggiest of ideas on how much the Yankees actually produce in profit each year for the family to share in. It would seem plenty to all of us normal people looking in from the outside. However, maybe the profits aren’t big enough to make the entire family happy, so they each wanted a few million more a year. Especially, when they can cash out and take hundreds of millions each.

      • Havok9120

        All evidence is that you are incorrect about the change in who’s collecting what. Hank, Hal, the sisters, and George’s wife have all had positions in the company since at least the 90s from the articles I have found through Wikipedia. It doesn’t appear that that saw a significant change.

        • Fin

          Havok, I cant trust Wiki on any of this. No one knows what the Stienbrenners do. Its the great thing of owning a private company.

          To be honest, it would be shocking if they don’t have stock in their company, with the family gaining a larger portion as George’s health failed.

          That being said, when you’re a private institution its easy to give stock, especially into a trust. I’m sure they have held large positions in the family business. I’m sure they are listed as officers in all the Yankees filings. They are very wealthy.

          I also have no idea what kind of cash George had. I have no idea what owning the Yankees pays the family. The only thing I (we as Yankee fans) know is the Yankees if sold, could provide each family member with close to a billion dollars.

          Again, I hope they are like the Rooney’s and love their family history and competing year in and year out. I would much rather have the Stienbrenners own the team, than sell to a guy like Murdoch.

          • Havok9120

            It’s news reports more than Wiki, but I completely understand what you’re saying. We’ve just seen nothing to indicate any kind of shift in how the company is handled and who calls the shots (the managing partner).

            • Fin

              We do…Until George died there was never a thought of reducing payroll. Now the family is incharge and reducing payroll is a priority.

            • Fin

              For the first time in most of our lives, they intentionally downgraded the team last year. Stewie/Cirvelli instead of Martin. Ichiro instead of Swisher. It was pathetic, and clear path to making more money for the family.

    • Electric Nunez ll

      C’mon now, don’t ruin the narrative.

      Fans on message boards know all about the financial workings of a multi-billion dollar franchise, and know how best to run that franchise, and have had plenty of success in doing so.

      I’m just saying all this ‘cuz I’m jealous of those fans.

      • Fin

        I don’t think its a narrative necessarily… I think its just something people don’t think about when assessing whats going on in an organization. Mostly likely non of us on here are billionaires. The stienbrenner family is. How much of decision making goes on to keep x-amount of family members happy with yearly income, we have no idea. I do know this, the potential to just separate each persons finances by taking a one time payout, has to be constantly on the Stienbrenners minds and discussions.

        I would have to assume that if you’re a Stienbrenner not involved in baseball, you want a specific dollar amount a year provided to you by owning part of the team. If that dollar amount isn’t meant, mostly likely calculated by what the Yankees are providing you, compared to what you could get from selling the team, then you aren’t happy.

        • http://www.bomberbanter.com jamie

          I tend to think that putting a winning team on the field is the path to continuing riches in baseball – at least in this market.