If Major League Baseball traded on a stock exchange it would be worth $36 billion. The average baseball team is now worth $1.2 billion, 48% more than a year ago, the biggest year-over-year increase since we began tracking team values in 1998. A record 15 MLB teams are now worth at least $1 billion, up from five in 2014.
The New York Yankees are worth the most, $3.2 billion, and are tied with the NFLs Dallas Cowboys as the most valuable U.S. sports teams (Spanish soccer team Real Madrid, worth $3.44 billion, is the most valuable in the world). The Yankees have been the most valuable baseball team each of the 18 years Forbes has valued MLB franchises since 1998. During the 2014 season, the Bronx Bombers generated a record $508 million of revenue after deducting PILOT bond payments of $78 million and the $90 million the team contributed to baseballs revenue-sharing system. The team raked in over $100 million in local television rights payments, and Derek Jeters last season in pinstripes goosed ticket and merchandise sales.
The Los Angeles Dodgers, worth $2.4 billion, are the second most valuable three years after Guggenheim Baseball Management bought the team and Dodger Stadium for $2 billion from Frank McCourt. The Dodgers raked in more than $120 million in television money last season, the the most in baseball, as part of the teams 25 year, $8.35 billion deal with Time Warner Cable. The team also lead MLB in attendance, with 3.78 million fans coming through the turnstiles during the regular season.
The San Francisco Giants had the biggest year-over-year gain, doubling in value, to $2 billion. The Giants three World Series titles over the past five seasons has helped the team nearly double revenue, to $387 millionwith much of the increase coming from sponsors like Adobe, Coca-Cola, Diageo, Lexus, MillerCoors, Oracle, Safeway, StubHub, State Farm and Yahoo. Since 2011, the Giants have been among the top four teams in attendance and with the launch of the Social Media Café at AT&T Park in 2013 are among the leaders in using social media to enhance the fans stadium experience.
The owners of the Giants are planning on leveraging the teams strong brand with Mission Rock, the creation of an urban community which is expected to be ready by 2020. The project includes office space for businesses,residential buildings, renovation of the historic pier, pedestrian-only alleys and green streets, recreational and cultural facilities and restaurants and retail stores.
The St. Louis Cardinals are baseballs biggest anomaly. Despite playing in one of the smallest markets, the Cardinals are MLBs sixth-most valuable team, worth $1.4 billion. During the 19 seasons Bill DeWitt has owned them, the Cardinals have posted a winning record 16 times and have been in four World Series, winning the title in 2011 and 2006. Since moving into their new stadium in 2006 the team has never finished below sixth in attendance and has placed second the past two seasons. The Cardinals also pull in baseballs highest local television ratings. And with Ballpark Village, the Cardinals have made the area near Busch Stadium a destination place for people looking for dining and entertainment.
Revenue growth and higher enterprise ratios (enterprise value divided by revenue) account for the rapid escalation in overall team values.
Television money is driving the sports top line growth. In 2014, broadcasting and cable money accounted for $2.88 billion, or 37% of baseballs $7.86 billion of revenue. Just five years earlier, television proceeds were $1.73 billion, or 29% of the sports $5.91 billion of revenue. During the past five years, mega cable deals for the Dodgers, Seattle Mariners and Los Angeles Angels of Anaheim have kicked in, and last season MLB began new national broadcasting deals with ESPN, Fox and TBS that will pay a total of $12.4 billion over eight yearsmore than double the previous contracts.
More television cash in on the way. The Texas Rangers begin their a $3 billion, 20-year cable deal this season (the team received a $100 million signing bonus in 2012). In 2016, the Philadelphia Phillies start a $5 billion, 25-year deal and the Arizona Diamondbacks begin a new cable deal that is reportedly worth $1.5 billion over 20 years. Meanwhile, the St. Louis Cardinals are in the midst of negotiating a richer cable deal.
Higher enterprise ratios are being fueled by the stock markets six-year bull run (which has inflated asset values and created a lot more buyer than seller of teams), baseballs unmatched inventory of live, DVR-proof content, real estate development around stadiums, higher profitability (which reduces the need for capital calls) and the incredible success of Major League Baseball Advanced Media, the sports digital arm that is equally-owned by the leagues 30 teams.
