MLB Teams Valued at Over $1 Billion on Forbes List
As someone who is pursuing a sport management degree online, you are interested in the business of sports. As one of the Big Three Sports in the United States, professional baseball has a prominent presence on the national sports scene. By engendering fan loyalty and adopting effective marketing processes, many MLB teams have amassed significant wealth.
Which are the most valuable teams in the MLB, and what strategies have enabled them to attain such success?
The Most Valuable Major League Baseball Teams
On the Forbes 2017 list of the most valuable baseball teams, the New York Yankees takes the top spot; the team is valued at $3.7 billion. The following teams round out the top 10:
- Los Angeles Dodgers — $2.75 billion
- Boston Red Sox — $2.7 billion
- Chicago Cubs — $2.675 billion
- San Francisco Giants — $2.65 billion
- New York Mets — $2 billion
- St. Louis Cardinals — $1.8 billion
- Los Angeles Angels of Anaheim — $1.75 billion
- Philadelphia Phillies — $1.65 billion
- Washington Nationals — $1.6 billion
According to Forbes, the average Major League Baseball team is worth $1.59 billion, a 19 percent increase over 2016. One Forbes writer noted that this increase in average value proves that, contrary to polls in recent years that have said baseball is declining in popularity, the sport is still a major business and an important pastime for fans. In fact, Forbes further compared the average team value between major sports in the United States and found that baseball is second only to football; the average NFL team is worth $2.388 billion.
It is worth noting that Forbes’ list of the most valuable baseball teams does not take all factors into account. According to The News Tribune, a newspaper in Tacoma, Washington, “the calculations do not include the value of any regional television network a club might own, but they do include any rights fees…Major League Baseball does not release it[s] financial reports and has long disputed Forbes’ annual findings.” The newspaper cited the Seattle Mariners as an example; the team owns 71 percent of a regional sports network, and if that had been taken into account, it may have affected the Mariners’ rank on the Forbes list.
How MLB Teams Make Money
Baseball teams have several methods through which they make money, one of the most prominent of which is via TV deals. The Philadelphia Phillies stands out as an example of this. Although it ranks as the ninth-most valuable team overall, it is the most profitable team in baseball, according to Forbes’ list. The team had an operating profit of $87.7 million, which was more $3 million more than the second most profitable team, the Chicago Cubs.
As of July 1, 2017, the Philadelphia Phillies was the baseball team with the worst win-loss record in Major League Baseball. Therefore, its profitableness may come as a surprise to anyone who is unaware of a TV deal that went into effect for the team last year. The deal with Comcast SportsNet is worth $5 billion, noted an article from The Good Phight, an online community that focuses on the Phillies team.
According to Forbes, a team’s value stems from four main factors:
- Sport — The portion of team’s revenue that comes from overall interest in the sport.
- Market — The money that comes from a team’s city and market size.
- Stadium — Income that results from the team’s stadium, including ticket sales for home games and the money that comes in from non-baseball events.
- Brand — Income from the team’s brand.
Different teams have strengths that vary across the four above-mentioned factors. For example, the Los Angeles Angels of Anaheim had an average home game attendance of just under 37,000 as of July 2017, according to ESPN. However, according to CBS, Angel Stadium of Anaheim was the most affordable MLB stadium for fans to watch a game at in 2016, with an average ticket price of under $10. The same sources state that the Boston Red Sox had an average attendance of just under 36,000, but that an average ticket cost $48 — the highest average ticket price in the league.
The New York Yankees may be the team with the greatest income from ticket sales. Although the average ticket for a baseball game did not cost as much as a ticket to see the Red Sox in 2016, the Yankees make a significant amount from premium seating. According to Forbes, the Yankees took in $130 million from premium seating in 2015, which was $45 million more than any other baseball team.
Some teams benefit greatly from the sale of branded merchandise. According to Slice Intelligence, the Chicago Cubs sold more than five times as much merchandise online as the average baseball team in 2016. The Boston Red Sox sold about 2.4 times as much as the average team, and the New York Yankees sold 1.7 times as much. Such numbers may be different for 2017. Slice Intelligence noted that there was a correlation between a team’s win-loss record and the amount of merchandise it sold. The teams with the better win-loss records tended to sell more.
Increasing a Team’s Value
Some baseball teams, such as the New York Yankees, the Boston Red Sox, and the Chicago Cubs, have been big earners for decades and may continue to be such because of their large fan bases. However, other teams may have the opportunity to climb the ranks if they manage their finances well and implement smart marketing strategies.
Sport Marketing is one specialization that you might choose to pursue when you are earning your Adelphi University Online Master of Science in Sport Management. The flexible online program will familiarize you with the unique aspects of sport marketing that do not apply to other industries. When you graduate, you may have the knowledge necessary to help a team increase its value significantly.