Thursday, October 24, 2013

Bloomberg: Rays Worth $530 Million

The latest MLB franchise valuations are out, courtesy of Bloomberg, and they peg the Rays at $530 million - triple the value of when Stuart Sternberg assumed principal ownership in 2005.  That's a 15% increase every single year, even during the Great Recession.

And Bloomberg's estimate may not be an apples-to-apples comparison to Forbes' most recent rankings that estimate the Rays' value at $451 million, but it is another sign that MLB owners continue to get richer and richer.  Bloomberg estimates the team alone is worth $421 million, plus another $110 million from MLB's advanced media rights.

While the Rays come in 30th out of 30 teams in the overall rankings, there's clear evidence the opportunity for them to jump will come in a few years when they can re-negotiate their television contract.  The Rays are just about dead-last in the media rights rankings, despite some of the best ratings in the bigs.

The Yankees, by the way, are worth an estimated $3.3 billion, according to Bloomberg. Their revenues alone are $570 million a year.

And once again, it's worth pointing out my three theories on MLB valuations:
  1. You can profit drawing 19,000 fans per game even without a playoff appearance....just not as much as MLB and its owners may like.
  2. Stu Sternberg is likely to be an even richer man if - and when - he ever decides to sell the Rays.
  3. Tampa Bay doesn't have an attendance or a revenue problem; it has a problem with MLB not sharing enough with small-market teams.
Neil deMause, from Field of Schemes, adds one more:
  1. Franchise values are soaring all over sports because of the "sports is the only thing people will watch live on TV so advertisers love it so cable companies have to pay through the nose for it" effect.

1 comment:

  1. "but it is another sign that MLB owners continue to get richer and richer.", I sense anger toward progression from you, and shows the continued increase snowball effect in revenue for hosting cities, which is why cities are more then willing to invest in a part of trillion $ businesses! Though there value means nothing, it doesn't tell the story with "attendance or revenue", and remember that profit isn't a "4 letter word"...
    (Great analysis Noah, you should be working for ESPN! lol)