MLB Worth $36 Billion As Team Values Hit Record $1.2 Billion Average

Forbes ^ | MAR 25, 2015 | Mike Ozanian

[MinorityRepublican]

More television cash in on the way. The Texas Rangers begin 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.

Each of MLB’s 30 teams went up in value by at least 20%. Why? Higher enterprise ratios are being fueled by the stock market’s six-year bull run (which has inflated asset values and created a lot more potential buyers than sellers of teams), baseball’s 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 league’s 30 teams.

MLBAM most recently developed MLB.com’s Statcast, which debuted at the 2014 All-Star Game. Statcast is a transformative tracking technology measuring every play that will revolutionize live broadcasts of Major League Baseball games to every screen from the computer to the television to the tablet to the smartphone. MLBAM also has a powerful video technology that supports partners such as HBO, ESPN and WWE, a business growing so fast there are reports of MLB spinning off a separate tech arm from MLBAM at a $5 billion valuation. In 2014, MLBAM generated an estimated $800 million in revenue and around $400 million in operating income. In total, MLBAM could be worth more than $10 billion.

[Walkingfeather]

Im not sure how this an be possible as the interest in sports like snorzeville baseball as well as other sports that use a ball do not have much interest in the next generation of kids. I do not see how the audience of older and older people can generate the justification of those kind of media buy clout. There is not the affection for the game there was even 25 years ago. You dont see teenagers grabbing their balls and gloves for a “pick up” game, they jump on line and play there.

[gusty]

The canary in the coal mine for what you are stating is in Los Angeles. SportsNetLA payed way too much for the rights to the Dodger games that it cannot get on cable or satellite carriers as a premium channel. The carriers will only take it if it is on a separate sports tier. The carrier wants to charge extra to customers who want the channel to justify its cost to them. Thus the Dodgers are not on TV in LA on 75% of the market. In the future, some of these MLB TV deals are going to decrease as the rights holders lose big money with these current deals.

[11th Commandment]

Yup, these value are going to decline when these rich TV contracts expire. I noticed some of the most valuable teams have the lowest profit%. They have to spend $$ on players to justify the big TV contracts and bring in fans. What happens to these teams that only attract because of big name players when there is no TV money?

IMHO the most valuable teams are the ones with fans outside markets- St. Louis, Chicago Cubs, Braves, Dodgers. Add the Yanks but they already monetize the out of market fan base.

[Resolute Conservative]

Factor in Spanish only channels...

[RayChuang88]

Correct. This wasn't like the YES Network when it first started in the early 2000's, which everyone wanted to watch but one James Dolan refused to allow on Cablevision until threats of lawsuits finally ended that standoff. The problem with the Dodgers deal was that they got too greedy and as a result, most cable and satellite viewers in the Los Angeles area couldn't see them, which may end up costing the Dodger potentially hundreds of millions in subscriber and advertising revenue.

Indeed, the reason why the NFL thrives right now is that the gigantic money the NFL earns from NBC, CBS, Fox, and ESPN rights fees is equally split among all the NFL teams.

[dfwgator]

The Texas Rangers begin a $3 billion, 20-year cable deal this season

They obviously haven't used the money to sign anybody who can actually play.

[Hillarys Gate Cult]

My favorite sports/money story has to be the Atlanta Braves worst to first 1991 season. After finishing last in 1990, they won the 1991 World Series. At that time they had the lowest paid club in MLB. The highest paid club in 1991 was the New York Yankees who didn’t even come close to any postseason play that year as they ended up near the bottom of their division.

[nascarnation]

As my Dad (RIP) used to snark: “nothing’s too good for the taxpayers”.

Unfortunately most of these stadium gravy deals only benefit the owners.