The key numbers show that the national pastime is more popular than ever. In 2007, baseball broke its attendance record for the fourth consecutive season when 79.5 million fans hit the turnstiles. A big plus: Interleague games, where teams in the American and National leagues square off against each other, averaged 34,900 fans per game, 15% more than intraleague contests.
The New York Yankees led the majors in attendance for a fifth straight year with a record 4.3 million. But the Chicago Cubs, Detroit Tigers, Houston Astros, Los Angeles Angels of Anaheim, Los Angeles Dodgers, New York Mets, Philadelphia Phillies, San Francisco Giants and St. Louis Cardinals each drew at least 3 million fans. Turns out all the media hype about how fans were stressing over steroids ruining baseball was pure fiction.
Upshot: Team owners are getting rich like never before. During 2007, revenue for MLB's 30 teams went up 7.7%, to $5.5 billion. The average team is now worth $472 million, 9.5% higher than last year and 143% more than when Forbes first calculated team values in 1998. Again the Bronx Bombers sit atop baseball with a value of $1.3 billion. George Steinbrenner, who paid $10 million for the team in 1973, could probably teach Warren Buffett a thing or two about investing.
Consider this: The Yankee brand (the portion of the team's value attributable to its name) alone is worth $241 million, almost as much as the entire Florida Marlins franchise. When the Yankees move into their new stadium in 2009 the team will be worth at least $1.5 billion because of the rich bounty of sponsorship and premium seating revenue.
The Mets, currently ranked second with a value of $824 million, will also get a new stadium that should push their value close to $1 billion before long. Citigroup (nyse: C - news - people ), beleaguered by the housing market meltdown, is still planning to pay the Amazins $400 million over 20 years for the stadium's naming rights.
By The Numbers: How Much Is Your Favorite Baseball Team Worth?
By The Numbers: Best Pitchers For The Buck
In Pictures: MLB Stadium Guide
When it comes to players, owners are becoming more tight-fisted. During the past five seasons, player costs (salaries, bonuses and benefits) have fallen to 56% of revenue from 66%. As a result, operating income (in the sense of earnings before interest, taxes, depreciation and amortization) averaged over $16 million per team for the second straight year.
Five years ago, 16 teams lost money. In 2007 only three teams--Blue Jays ($1.8 million), Red Sox ($19.1 million), Yankees ($47.3 million)--posted an operating loss. But even those losses are misleading. For the owners of the Yankees and Red Sox, the huge dividends they get from their unconsolidated cable networks more than make up for the teams' losses. Meanwhile Rogers Communications (nyse: RCI - news - people ), which owns the Blue Jays, their stadium and the cable channel that televises its games, derives huge benefits from owning the Blue Jays not reflected on its team's P&L statement.
On the field, the Arizona Diamondbacks and Colorado Rockies were the Cinderella stories last season. But the blueprint for how to operate a franchise in a small market is the Cleveland Indians, who have shown that a team can win on and off the field if they invest wisely in player development and have good chemistry on the diamond. In 2006, the Indians won only 78 games. Last season, not only did the Tribe eliminate the Yankees in the playoffs but they generated $29 million in operating income, third-most in the American League.
No comments:
Post a Comment