Forbes’ annual franchise valuations are out

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Sticking with Forbes, we link for your pleasure its annual list of baseball franchise valuations.  You’ll be shocked to learn that the continued uncertainty at backup catcher and fifth starter has not negatively impacted the value of the New York Yankees. They’re still number one. When you combine the team’s revenues with it’s interest in the YES Network and its Legends Management arm which manages the ballpark, the Yankees — as an overall enterprise, not just the team itself — are worth an astounding $5.1 billion.  Yeah, I think they’ll be able to keep Sabathia if he opts out of his contract this fall.

But it’s not just the Yankees. Overall, the state of franchise valuation is strong:

The average MLB franchise is now worth $523 million, an all-time high and 7% more than last year. All of the league’s teams rose in value except for three: the New York Mets, San Diego Padres and Cleveland Indians. The increase in team values is the result of greater revenue for teams playing in new stadiums, like the New York Yankees (up 6% in value to $1.7 billion) and Minnesota Twins (up 21% to $491 million) as well as the Florida Marlins (up 13% to $360 million), who are scheduled to move into their new stadium in 2012.

And I would presume that the Mets valuation will slingshot back up if and when the team is sold to more solvent ownership.

People always wonder why someone would want to buy a Major League team given the big salary obligations and, for many teams anyway, the lowish annual revenues. The answer is appreciation of the asset which — in addition to being an ego-gratifying little jewel to own — happens to appreciate at a nice steady rate even during economic downturns.

Franchise appreciation and subsequent sale is where the real money is. Unless you’re in Cleveland and San Diego, anyway. And unless you have franchise crippling debt.

The Yankees attendance and revenue is down, but it makes sense

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There’s a long article in the New York Times today noting that the Yankees attendance is down and that, based on financial figures released as part of their stadium bond disclosures, ticket and suite revenues through last season have fallen by $166 million since the end of 2009.

There is a lot of talk in the article about the exciting young team the Yankees have put together and how much they’ve won so far in the early going. And there is a lot of talk about marketing and demographics — Hal Steinbrenner talks about baseball’s “millennial problem” — but the story of the Yankees’ box office issues, such as they are, is pretty straightforward.

All teams suffer attendance and revenue decline when they play poorly. While the Yankees have not been bad for a long, long time, that’s a somewhat relative thing. They Yankees have sold themselves and sold their fans on the idea that nothing short of a championship is acceptable, so missing the playoffs for three of the past four years is bad for them. Fans don’t want to go see a bad team, be it Yankees fans, Rays fans, Royals fans or whoever.

Despite the recent lack of success, the Yankees have still, perversely, continued to price their tickets, concessions, parking and everything else as though they’re the only game in town. When demand falls and prices remain super high, fewer people are buying your product. Even if you’re the New York Yankees.

The Yankees are good this year. What’s more, they’re good in that exciting way that only young promising players bursting out onto the scene can deliver. It’s a wonderful thing for marketing and stuff, but even under the best of circumstances, ticket sales tend to lag on field success, often by as much as a year. Go back and look at World Series winning teams — especially the surprise winners — and you’ll see that it’s the year after on-field success when the real attendance bumps happen. I expect, if the Yankees continue to play well, their gate will get really nice by the end of the summer, but I suspect we’ll also see a more dramatic bump next year.

Taken all together, this is a dog-bites-man story. The Yankees are not some transcendent institution, immune from market forces. They’re just one of 30 Major League Baseball teams competing against other entertainments for a finite amount of the public’s money and attention. Nothin’ to see here.

David Price had a rocky rehab start last night

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Red Sox starter David Price has been rehabbing a left elbow injury since early March. Last night he made his latest rehab outing for Triple-A Pawtucket. It didn’t go well.

Price allowed six runs — three earned — on seven hits in three and two-thirds innings, requiring 89 pitches to do it. His velocity was good, but otherwise it was a night to forget. This was supposed to be Price’s last rehab start before returning to the Sox’ big league rotation, but one wonders if he’s ready for it.

Price didn’t talk to the media after the game, but Pawtucket’s manager said he was “upbeat” and “felt good.” For his part, John Farrell, upon hearing about the outing, said this:

“There’s no announcement at this point. We’ve got to sit with him and talk about what’s best for him, best for us as we move forward.”

The Sox could really use Price back in the rotation given their injury problems, but rushing him back if he’s not ready is certainly not ideal.

Stay tuned.