Mark Shapiro bolting to Toronto is not the most surprising thing on the planet given the competitive positions of his old employer, the Indians, and his new one, the Jays. But it likely also makes sense given the financial position of the two clubs as well.
The New York Post reports that Indians owner Paul Dolan is trying to sell a significant minority chunk of the team in order to raise money. The only problem is that he’s probably overvaluing that chunk:
Dolan believes the franchise is worth around $800 million, which is rich considering the team is just breaking even . . . Without a big TV contract, sports industry sources say, the Indians are worth about $600 million.
The value of sports teams has skyrocketed in recent years, driven by TV money for the most part. As that Post story notes, however, the Indians don’t have big TV money nor the prospect to get it in the near future. Between that, low gate and underachieving play the Indians really aren’t all that attractive as an investment. I don’t know if franchise values are the product of a bubble poised to burst, but I will say that the Indians are among the teams most likely to challenge the notion that franchise values shall climb precipitously and in perpetuity.
Besides, as we’ve discussed here before, owning a minority stake in a closely-held family company like a baseball team is nothing but a vanity play, at least until the team is ultimately sold and you cash out. You have no power to make decisions and you are far more restricted from liquidating your investment than you would be in almost any other conceivable setting. You’re basically giving a guy like Paul Dolan $100 million or whatever for nice seats in a luxury box.
I can think of way cooler things to do with $100 million than buy Indians season tickets with it. Can’t you?