Last year, Major League Baseball made a number of on-field law changes that were intended to make the game faster and more action-packed. Connoisseurs howled, but supporters embraced the techniques. The result: Admission soared, local Television ratings jumped, and the club posted report sponsorship and product sales.
Even up: MLB team principles.
The typical group is fair$ 2.64 billion, including capital in real estate and athletics- related companies, such as regional sports networks and minor league teams, according to Sportico’s calculations. The value is up 12 % from a year ago with the New York Yankees once again on top at$ 7.93 billion, followed by the Los Angeles Dodgers ($ 6.3 billion ) and Boston Red Sox ($ 5.69 billion ), based on conversations with team executives, as well as bankers, lawyers and investors familiar with team transactions.
The Yankees ‘ value only trails the Dallas Cowboys ($ 9.2 billion ) and Golden State Warriors ($ 8.2 billion ) among the world’s most valuable sports franchises.
Push for a list of all 30 team or a data visualization that shows the teams ‘ performances.
With the Oakland A’s facing a wildly challenging four years before a stadium in Las Vegas is ready in 2028, MLB is not all rainbows and butterflies. With pressure on local TV rights fees, Florida teams ‘ struggles to draw fans, and other issues, it is n’t all rainbows and butterflies. However, according to investors, MLB teams nevertheless are considered to be good value in comparison to other sports leagues, helped by the amount of information offered by a 162-game season.
The 30 MLB teams generated an estimated$ 11.8 billion in revenue last season, including non- baseball events ( i. e. concerts ) at ballparks owned or operated by the teams. It was up 9 % from the prior year with gate receipts ( + 12 % ) and sponsorships ( + 15 % ) offsetting flat local TV revenue. Central revenue increased by 8 %, thanks to double-digit increases in sales of merchandise and league sponsorships.
Fans flocked to the rough in 2023 with full presence of 70.7 million, off 10 % from the previous yr. Credit the new healthy routine and law changes. The time included a document- tying 17 groups that drew at least 2.5 million viewers, led by the Dodgers at 3.8 million. The Miami Marlins, Tampa Bay Rays, Pittsburgh Pirates, and Cleveland Guardians all accounted for more than 25 % of the team’s fans ‘ attendances. Admission for Cincinnati Reds increased by 46 %.
Financial services and technology companies saw a rise in funding revenue as a result of the introduction of the shirt piece program, which MLB introduced last year. Of the seven groups with hoodie talks to begin the 2023 season, the Red Sox had the richest pact—a 10- time deal with Mass Mutual fair$ 17 million annually on regular. As the time progressed, more teams signed contracts that will increase 2024 sponsor revenue when groups receive a full month’s worth of value in the form of a deal the Yankee reached with Starr Insurance in July that is worthwhile$ 25 million a year.
Eighteen teams now have jersey bargains, and the combined annual pay is approximately$ 200 million.
The debt processing by Diamond Sports Group did not, according to the local press, lead to the abolition of local TV right. MLB accounted for 80 % of the remaining gap caused by DSG’s termination of its agreements with the San Diego Padres and Arizona Diamondbacks midway through the year and paid 95 % of its owed right in 2023.
While clubs received almost all of their RSN funding in 2023, Sportico has once more significantly decreased the value of any collateral held by clubs in systems as part of the related business group. In January, the Seattle Mariners took 100 % possession of Root Sports Northwest, which broadcasts their activities. The RSN generated$ 64 million of cash flow in 2019 but lost$ 19 million in 2023, according to Kagan Research. We did n’t attach any value to the Mariners ‘ ownership of Root Sports. We cut the equity held by all of the Bally Sports groups last year to a total of 0.
More teams will see lower rights fees in 2024 as a result of Diamond’s renegotiating of its agreements with the Texas Rangers and Cleveland Guardians at 15 % or so haircuts under agreements that expire at the end of the year.
Warner Bros. Discovery’s return from its AT&, T RSNs results in less money than lineage talks in locations like Houston and Pittsburgh, where both took command of their native rights in branded RSNs where they are a joint owner. Those are Space City Home Network, which also includes the Houston Rockets, and SportsNet Pittsburgh with the Pittsburgh Penguins. MLB assumed control of the Colorado Rockies ‘ local media following AT&, T’s RSN withdrawal.
In contrast to the other major U.S. sports leagues, MLB continues to be the most heavily reliant on local TV revenue. RSNs ‘ expansion through the 1990s and 2000s was the ideal foundation for them as baseball proliferated. The game produced a six-month season of highly rated three-hour games, mostly in primetime, as well as shoulder programming of pre- and post-game shows.
The MLB’s increased revenue outside of TV rights fees has lessened the sport’s reliance on the revenue stream a little. Local media, including radio, represented 23 % of total MLB revenue in 2022 but fell to 21 % last season.
In 2023, the top 10 MLB teams were all on Bally Sports or AT& or T RSNs, with the exception of the Oakland A’s, who each have their own financial difficulties to contend with. Our revenue estimates are net of revenue sharing, which means that MLB’s revenue sharing system, which transferred roughly$ 500 million from the top clubs to the lower-income ones, has some impact on these teams.
The A’s pocketed 50 % of their allotted amount, or$ 27 million, per the 2022 CBA, which otherwise bans big market teams from receiving revenue sharing funds—they will get 75 % of their share in 2024.
The A’s 2023 revenue was$ 241 million, more than$ 30 million behind the Miami Marlins in 29th. After 2024, Oakland needs to find a stadium to hold its games until its new home in Las Vegas for the 2028 seasons.
A trio of teams ‘ value increased by more than 20 %. The Atlanta Braves ($ 3.4 billion ) and Houston Astros ($ 3.21 billion ) both jumped 24 %, with the Philadelphia Phillies ($ 3.03 billion ) gaining 23 %. They all jumped ahead of the New York Mets ($ 2.91 billion ) and are ranked six through eight among the 30 MLB teams.
In recent years, the three big-market clubs have combined success on the field with significant revenue increases off the field. The Braves are on a six-year playoff run, while the Astros have won the League Championship Series seven times in a row. The Phillies won the World Series in 2022, but they lost a game the previous year.
Atlanta, Houston, and Philadelphia are just a few of the eight teams that attracted 3 million fans last year. The Astros ranked fourth last year for ticket and sponsorship revenue behind baseball’s blue bloods, the Yankees, Dodgers and Red Sox. Stanley Middleman purchased a 16 % stake in the Philadelphia Phillies from the Buck family for$ 2.8 billion in 2023. Our valuations are based on a control sale rather than an LP sale.
When they opened Truist Park in 2017, the Braves faced criticism for moving from Atlanta’s downtown to the suburbs. With a 122 % increase in revenue, the move has been a financial success. The team currently has a 16 000-strong waiting list for season tickets.
Many teams use the blueprints of the Braves and their 60-acre development near Truist Park, The Battery, to create mixed-use development plans outside of their stadiums. It generated an adjusted operating profit of$ 39.5 % on revenue of$ 59 million in the prior year.
The Texas Rangers, St. Louis Cardinals, San Francisco Giants and Chicago Cubs have robust real estate projects, and in November, the Astros announced plans for a hotel and entertainment district next to Minute Maid Park. The Phillies and Comcast collaborated last week on a$ 2.5 billion development at the sports complex they share, along with the Philadelphia Flyers. In order to redevelop some real estate around Fenway Park, the Red Sox entered a joint venture with WS Development and” 47 Brand” in 2020.
The advantages of the developments are twofold: they allow for the business to be more profitable, and the proceeds go beyond MLB’s revenue sharing program, with the teams being the primary payors in the system.
Although the Yankees ‘ real estate plans are limited to the Bronx, the team has used its strong brand and strong balance sheet to launch and invest in related businesses. The Yankees own 26 % of the YES Network, which is by far the most profitable RSN with$ 243 million in cash flow last year, per Kagan. Other investments held by Yankee Global Enterprises include 20 % of Legends, an 8 % interest in AC Milan, 20 % in New York City FC and 10 % of A1 Padel. For YGE, those outside investments are worth more than$ 1 billion.
” We are a sports organization”, Yankees owner Hal Steinbrenner said at Sportico’s Invest in Sports event, adding that they are excited about the investments in AC Milan and Padel. He claimed that because the Yankees could run those businesses “better than anyone else could,” they were the ones who set up YES and Legends.
Since George Steinbrenner led a group that gave the Yankees an$ 8.8 million team in 1973, the value of the team has increased by 14.3 % annually. It is tops among current MLB owners, with Jim Crane second at 13.6 % for his 2011 purchase of the Astros for$ 610 million.
In January, Carlyle Group co- founder David Rubenstein agreed to buy the Baltimore Orioles at a$ 1.725 billion valuation. Rubenstein’s group, which includes Ares Management co- founder Michael Arougheti, Michael Bloomberg andGrant Hill, is purchasing 38 % of the franchise and the remaining roughly 30 % held by the Angelos family after Peter Angelos ‘ death, which occurred March 23. If the remaining limited partners want to sell, they have “tag- along” rights. Rubenstein’s purchase is expected to be approved by MLB on Wednesday, and he will be the control owner.
The deal is only the fifth time the MLB team control has been sold in the last 12 years; Steve Cohen’s previous deal to buy the New York Mets for$ 2.42 billion in 2020 was the last one. The Orioles generated around$ 310 million in revenue in 2023 after revenue sharing, putting Rubenstein’s price at 5.6 times revenue. The Rubenstein deal reinforces a tenet that investment bankers have throughout the sport: MLB teams offer good value right now in comparison to other well-established sports leagues. Last year, the NFL’s Washington Commanders sold for 11 times revenue, while the NBA’s Phoenix Suns commanded 13 times revenue.
Overall, MLB’s value to revenue multiple is 6.7 versus 11 for the NBA and 8.8 for the NFL.
The Washington Nationals own the remaining shares, which the Orioles sold, but the Orioles ‘ sale did not assign any value to its 75 % ownership of Mid-Atlantic Sports Network. In recent years, MSN’s finances have significantly deteriorated. In 2019, the network generated$ 134 million in cash flow, but that sank to$ 19 million last year, according to Kagan.
While MASN does n’t hold much value these days, the Orioles, and every MLB team, owns a 1/30th stake in MLB Advanced Media and the league’s investment arm, Baseball Endowment L. P. Those two assets are worth$ 2.5 billion, or$ 84 million per team, according to the Braves SEC filings.
Beyond the valuation gap with other sports leagues, baseball’s opportunity lies in the volume of content with 162 games each year. The 70 million fans at the ballpark generate revenue from sales of tickets, concessions, and parking, as well as customer data, which enables teams to better target their customers. And despite the controversy surrounding RSNs ‘ economics, the games still generate large TV audiences that are the most highly regarded primetime programming in most markets —ratings increased by at least 25 % for nine teams last year.
” I think MLB is cracking the code with how they are tapping into their fan base”, Henry Flynn, who manages Fitch Ratings ‘ portfolio of sports credits, said in a phone interview. ” I expect them to continue on a growth trajectory”.