Posted April 21, 200619 yr Baseball owners continue to slam the ball out of the park. Team values increased an average of 15 percent for the second consecutive year, to $376 million, in our 2006 survey of Major League Baseball's 30 franchises. Overall operating income increased to $360 million ($12.1 million per team) from $132 million ($4.4 million per team) the previous year, as revenue increased faster than player salaries The biggest winner was the Washington Nationals, whose value rose 42 percent. In March, Major League Baseball finally agreed to terms with the District of Columbia's local politicians that will have taxpayers foot most of the bill for a new $700 million stadium, which should open by the start of the 2009 season and add $40 million to $50 million to the team's revenue. But the biggest story is the effect revenue sharing is having on the league's economic landscape. Most of the money comes courtesy of the New York Yankees, which paid a record $77 million toward baseball's revenue sharing system. The Boston Red Sox, baseball's No. 2 revenue sharer, paid only $51 million. Such generosity by Yankees owner George Steinbrenner, required by the league's rule that teams pay 34 percent of their net local revenue to help make poorer teams more competitive, is the reason why the Oakland Athletics, Minnesota Twins and Kansas City Royals increased in value by more than 20 percent. Revenue sharing also had a profound impact on operating income. The Yankees and the Red Sox lost $50 million and $18.5 million, respectively, before interest, income taxes and depreciation. By not using their subsidies to boost player payroll (which was the intent of revenue sharing), the Pittsburgh Pirates, Royals and Twins each earned more than $20 million. But the league's reliance on Steinbrenner's Yankees goes far beyond revenue sharing. For example, a visit by the Yankees can increase a home team's ticket sales by as much as 25 percent. And the Yankees account for 27 percent of all league merchandise sales, the profits of which get shared equally throughout the league to the tune of more than $3 million per franchise. In effect, much of the league operates as subsidiaries of the Bronx Bombers. But don't feel bad for the Yankees or the Red Sox. They sit atop our rankings, worth $1 billion and $671 million, respectively, thanks to the revenue generated by their ownership stakes in regional sports networks. Steinbrenner's $62 million in cable money from the YES channel was by far the most in the league. Moreover, the Yankees will have a new cash-rich ballpark by 2009 -- perhaps adding another 20 percent to the team's valuation. The big question after this season will be about baseball's broadcasting deal with Fox, which is owned by News Corp. The current $2.5 billion, six-year deal expires after this season, and it is not certain yet whether Fox will renew its deal. The thinking here is that Fox will renew for a 5-percent annualized increase. The league's $2.37 billion deal with ESPN, which is owned by Walt Disney Co., runs through the 2013 season. That means next year should be another boom for baseball, especially those teams subsidized by the Yankees. STORY LINK FORBES LIST LINK
April 21, 200619 yr According to the Forbes list, the Marlins lost $11 million last season. Only the Mets, Yankees, and Red Sox lost more.
April 21, 200619 yr According to the Forbes list, the Marlins lost $11 million last season. Only the Mets, Yankees, and Red Sox lost more. Yeah, and only 5 teams lost money and many raked in 8 figures.
April 21, 200619 yr According to the Forbes list, the Marlins lost $11 million last season. Only the Mets, Yankees, and Red Sox lost more. Yeah, and only 5 teams lost money and many raked in 8 figures. i understand how we lose money with horrible attendence but how do the bosox and yanks lose money?
April 21, 200619 yr According to the Forbes list, the Marlins lost $11 million last season. Only the Mets, Yankees, and Red Sox lost more. Yeah, and only 5 teams lost money and many raked in 8 figures. i understand how we lose money with horrible attendence but how do the bosox and yanks lose money? The luxury tax and revenue sharing.
April 22, 200619 yr The item that keeps jumping at me is that the Dodgers, which basically is the kingpin of the #2 market of the country is worth almost 20% less than the Mets, if you go by Forbes' chart. Amazing that even a second fiddle like the Mets are worth more than the Dodgers and close behind the Red Sox, and that's with their pathetic history (save about five or six seasons). Just shows how powerful the New York market still is and why talk about a third team there will never completely die down.
April 22, 200619 yr i understand how we lose money with horrible attendence but how do the bosox and yanks lose money? In a nutshell, here's your answer... ...the biggest story is the effect revenue sharing is having on the league's economic landscape. Most of the money comes courtesy of the New York Yankees, which paid a record $77 million toward baseball's revenue sharing system... Such generosity by Yankees owner George Steinbrenner, required by the league's rule that teams pay 34 percent of their net local revenue to help make poorer teams more competitive, is the reason why the Oakland Athletics, Minnesota Twins and Kansas City Royals increased in value by more than 20 percent. Back when you guys were a little harder on the Yankees and asking if they were "bad for baseball," I made an argument similar to this one: But the league's reliance on Steinbrenner's Yankees goes far beyond revenue sharing. For example, a visit by the Yankees can increase a home team's ticket sales by as much as 25 percent. And the Yankees account for 27 percent of all league merchandise sales, the profits of which get shared equally throughout the league to the tune of more than $3 million per franchise. In effect, much of the league operates as subsidiaries of the Bronx Bombers. One other point worth investigating: Moreover, the Yankees will have a new cash-rich ballpark by 2009 -- perhaps adding another 20 percent to the team's valuation. Let's not forget who is footing the bill for this stadium. Unlike the Nats [" taxpayers foot most of the bill for a new $700 million stadium"], it isn't the tax payers of NY... it's Uncle George. So, sure. On paper, the Yanks are losing money. The truth is, they are still raking it in because of great ownership. They spend money to make money, rather than taking their profits and putting it in their pockets instead of their product [i wont name any names because you know EXACTLY who I am talking about].
April 22, 200619 yr i understand how we lose money with horrible attendence but how do the bosox and yanks lose money? In a nutshell, here's your answer... ...the biggest story is the effect revenue sharing is having on the league's economic landscape. Most of the money comes courtesy of the New York Yankees, which paid a record $77 million toward baseball's revenue sharing system... Such generosity by Yankees owner George Steinbrenner, required by the league's rule that teams pay 34 percent of their net local revenue to help make poorer teams more competitive, is the reason why the Oakland Athletics, Minnesota Twins and Kansas City Royals increased in value by more than 20 percent. Back when you guys were a little harder on the Yankees and asking if they were "bad for baseball," I made an argument similar to this one: But the league's reliance on Steinbrenner's Yankees goes far beyond revenue sharing. For example, a visit by the Yankees can increase a home team's ticket sales by as much as 25 percent. And the Yankees account for 27 percent of all league merchandise sales, the profits of which get shared equally throughout the league to the tune of more than $3 million per franchise. In effect, much of the league operates as subsidiaries of the Bronx Bombers. One other point worth investigating: Moreover, the Yankees will have a new cash-rich ballpark by 2009 -- perhaps adding another 20 percent to the team's valuation. Let's not forget who is footing the bill for this stadium. Unlike the Nats [" taxpayers foot most of the bill for a new $700 million stadium"], it isn't the tax payers of NY... it's Uncle George. So, sure. On paper, the Yanks are losing money. The truth is, they are still raking it in because of great ownership. They spend money to make money, rather than taking their profits and putting it in their pockets instead of their product [i wont name any names because you know EXACTLY who I am talking about]. Bingo. Best ownership in sports, bar none.
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