New York Yankees Lead MLB Franchise Worth at Impressive $8.2B
A continual analysis of the projected worth of Major League Baseball (MLB) franchises unsurprisingly predicts the forthcoming disruption in broadcasting due to the fluctuating dynamics of local television rights in the era of streaming. The New York Yankees continue their streak, marking the 28th year leading the Forbes’ yearly round-up of MLB franchise values, exceeding the impressive $8 billion benchmark, the first in baseball history. With an extraordinary value pinned at $8.2 billion, they remain superior in comparison to the second in line, the Los Angeles Dodgers, with an impressive value of $6.8 billion, marking a 25% surge during a victorious year capturing the World Series and translating the debut season of notable two-way superstar Shohei Ohtani into lucrative revenue.
The MLB franchises making the top seven list which includes the Yankees and Dodgers, trailed by the Boston Red Sox ($4.8 billion), Chicago Cubs ($4.6 billion), San Francisco Giants ($4 billion), New York Mets ($3.2 billion) and Philadelphia Phillies ($3.1 billion), all have one aspect in common. These MLB franchises are either self-operating their regional sports networks or, like Giants, Dodgers, and Phillies who are interlocked in time-resistant multi-billion dollar commitments, possess a certainty towards their television future.
Any franchise valued lesser will encounter certain unpredictability concerning their television future. This crisis turned imminent in March 2023 when Diamond Sports Group, holder for the rights of 14 MLB franchises, was declared insolvent. Further, this crisis is expected to partially set the tone for the labour dispute discussions post the expiry of the existing agreement in December 2026, aligned with the attempts of MLB commissioner Rob Manfred promoting local TV rights as a collective package.
The fragmenting conditions of Diamond Sports Group – now rebranded as Main Street Sports Group’s FanDuel Sports Network – and the considerable revenue loss due to shifting other networks to more expensive cable packages, widened the disparities between the highly ranked franchises and the rest. While franchises like the Dodgers are anchored in an $8.35 billion deal with Time Warner enduring until 2038, other franchises like Yankees, Red Sox, Cubs and Mets have either ownership, operational control or equity stake in their respective networks.
While the above situations reflect positively on the total revenue of the industry, it might pose potential difficulties for Manfred’s vision of marketing local rights as a collective group. Furthermore, highly ranked franchises, aka the ‘bluest bloods’, would resist being classified together with less profitable franchises. This is especially since they support the lower half through revenue sharing, a practice that is expected to continue.
Franchises that are left out of the high-ranked list are approaching the local TV issue in several ways. MLB is set to create local broadcasts for six teams: Cleveland Guardians, Milwaukee Brewers, Minnesota Twins, San Diego Padres, Arizona Diamondbacks and Colorado Rockies. Just like these teams, the Texas Rangers also dealt with Diamond Sports but they chose to establish Rangers Sports Network which will produce and distribute all Rangers broadcasts from this week onwards.
One silver lining from the current broadcast turmoil is the fast-tracking of direct-to-consumer options. Out of 30, twenty-six teams will provide streaming subscriptions. Many of these will not require a cable subscription. Yet, it’s vital to note that Forbes evaluations do not consider the worth of team-owned networks or the teams’ equity stakes in these networks, nor the value of other sports assets or mixed-use real estate.
Despite that, franchises that have ventured into the realm of real estate seem to have exceeded their expected league. Scoring highest among those still broadcasted by the restarted Diamond Sports Group is the Atlanta Braves, with a whopping $3 billion valuation. The Giants, who have recently started construction their Mission Rock development near Oracle Park, rank fifth, ahead of big-market teams like the Mets and Phillies.
Meanwhile, lower-revenue clubs like the Baltimore Orioles and Pittsburgh Pirates are projected to reap significant profits. The Orioles, to their credit, drew 2.28 million people to Camden Yards, the most since 2015, and reached playoffs for the second consecutive season with a young, low-cost team. The Pirates haven’t been in the playoffs since 2015 and have been missing from all major free agent pursuits and finishing in last or near last for seven consecutive years. Regardless, they have seen an attendance spike to 1.7 million, the highest since 2017. This has afforded owner Bob Nutting to glean a neat profit, as reported by Forbes.
Investment in team is equally important. The San Diego Padres reported $32 million in operating income last season, primarily due to late owner Peter Seidler’s nine-figure investments speckling the roster. Contrastingly, despite an anticipated $38 million in operating income, the Miami Marlins are last in franchise value at $1.05 billion. They lost 100 games and pulled only 1.08 million fans.
New Orioles owner David Rubenstein appeared to strike the proper chord when he purchased Baltimore’s franchise for $1.725 billion, a deal that was sealed nearly a year ago. The franchise is currently valued at $1.9 billion, making him at least break-even on his new venture. The same cannot be said for Marlins owner Bruce Sherman, who purchased the club in 2017 for $1.2 billion; it’s now estimated to be worth $1.05 billion.
On a final note, the Minnesota Twins are reportedly asking for $1.7 billion in their sale although Forbes assesses their value at only $1.5 billion. This disparity showcases the discrepancies that can sometimes exist in such valuations.