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2005 Forbes MLB Franchise Valuations Released

Tuesday, April 12, 2005

Forbes Magazine has released its 2005 Major League Baseball Team Valuations.

The 2005 Forbes estimate of MLB Franchise Values.

The Cubs come in at number 6 this year, valued at $398 million. This represents a 14% increase from last year.

The Yankees are estimated to have the highest value at $950 million. The Red Sox are next at $563 million. The Mets, Dodgers, and Mariners round out the top 5.

The largest increase in value belongs to the Washington Nationals. Their move to Washington from Montreal resulted in a 114% increase in franchise value. The Phillies had the next largest increase, 39%, and are now ranked as the seventh most valuable franchise.

Of the top ten franchises by value, the National League ranks seven teams while the AL only has three. The ten franchises valued lowest includes six AL teams and four NL teams. The AL secured the bottom four spots in Kansas City ($187 M), Oakland ($185 M), Minnesota ($178 M), and Tampa Bay ($176 M).

Across the boards, franchise values are up. The only team that Forbes estimates lost value is the Oakland Athletics (-1%). This is probably due in part to tax depreciation changes over the offseason.

In addition to valuing the franchises, Forbes also assigns debt/value ratios. The Diamondbacks supposedly have 103% of their value in debt, and the Dodgers are almost as highly leveraged at 99%. Forbes reports that the Blue Jays have no debt, which makes me wonder what Forbes considers debt? Other teams with low levels of debt include the Braves (8%), Cubs (10%), Los Angeles Angels of Anaheim (10%), and the White Sox (11%). It is interesting to me that the three teams with the least debt are the three teams with corporate ownership (Jays, Braves, and Cubs).

The revenue numbers Forbes reports range from $80 M (Montreal/Washington) to $264 M (Yankees). The Yankees had $53 M more in revenues than the next closest team, the Red Sox. The Cubs came in sixth by extracting $170 million from their fan base.

Finally, the most controversial numbers are the profit figures. According to Forbes, 20 teams turned operating profits last year, led by the Orioles who supposedly earned $34 M. Additionally, The Indians, Devil Rays, Brewers, and Reds are all said to have earned over $20 M.

The Cubs are estimated to have earned $11.4 million in operating profit during 2004.

Ten teams lost money due to operations. This group was led by the Yankees who lost $37.1 M. The Angels also are estimated to have lost $30 M in Arte Moreno's first year as owner.

Of the ten teams who reportedly lost money, 6 of those teams made the playoffs in 2004. Only the Astros ($9.6 M) and Braves (15.4 M) made both the playoffs and a profit.

In contrast, four of the six last placed teams turned a profit, although the Diamondbacks sustained heavy losses (-$18.7 M).

These numbers are all estimates by Forbes. As best I know, they have not seen the teams' books or attempted to uncover accounting shenanigans, which I guarantee are being played. In essence, these numbers are meaningfully meaningless.

Posted by Byron at April 12, 2005 1:03 AM | Bookmark and Share | BallHype: hype it up!
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