Surprise! Forbes ranks Yankees as most valuable MLB franchise

By Mike Axisa | Baseball Writer

Spoiler: Derek Jeter's Yankees are MLB's most valuable franchise.
Spoiler: Derek Jeter's Yankees are MLB's most valuable franchise. (USATSI)

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For the 17th straight year, the Yankees are the most valuable Major League Baseball franchise, according to Forbes. They are worth an estimated $2.5 billion according to Mike Ozanian. The Dodgers are a distant second among MLB clubs at $2 billion, the Red Sox and even more distant third at $1.5 billion. The Rays rank 30th at $485 million.

Here's more, from Ozanian:

The New York Yankees, worth $2.5 billion, are baseball's most valuable team, as they have been each of the 17 years Forbes has compiled this scorecard. The only other U.S. sports team worth more than $2 billion is the Dallas Cowboys ($2.3 billion) of the NFL. Including the annual average of the $400 million upfront payment the team got for agreeing to sell its controlling stake in the YES Network (full disclosure: I am co-host of the RSN's Forbes SportsMoney show) to News Corp (now 21st Century Fox), the team raked in over $100 million in cable money last season, by far the most in baseball.

Even after kicking in $95 million towards the league's 34% local revenue sharing pool and their $64 million PILOT bond payments for Yankee Stadium last season, the Bronx Bombers led the league in revenue ($461 million). But there is clearly pressure on the Yankees to regain their form on their diamond: the team finished in fourth place in the AL East last season and missed the postseason for only the second time since 1994. A drop in ticket revenue last season resulted in overall revenue falling by $10 million from 2012, and in November Moody's lowered their outlook on the bonds from positive to stable while leaving its investment grade rating unchanged.

Thanks to all the new and highly lucrative television deals being handed out, franchise values are increasing at a greater rate than team revenues. Only the Mets (1 percent), Marlins (4 percent) and Astros (15 percent) saw their franchise value decline from 2013, all for pretty obvious reasons. They're bad teams and their relatively new ballparks are emptier by the year.

Revenues are at an all-time high, and when Bud Selig took over as acting commissioner in 1992, he reportedly told owners he wanted to be judged based on how franchise values increased during his tenure. How did he do? Another snippet from Ozanian:

In 1992, the average baseball team was worth $110 million, according to the Economic History of Major League Baseball, meaning team values have increased seven-fold, or at a 9.8% compound annual rate since Selig became interim boss. Since 1992, the S&P 500 stock index rose at a 7.1% (9.2% with dividends reinvested into the index) annualized rate. After adjusting for inflation, team values increased at a faster clip under Selig than any of baseball commissioner who served at least five years, save Kenesaw Mountain Landis.

What at about the other sports? Using team values published by my former employer, Financial World, the average NFL team value was $129 million in 1992 compared with $1.17 billion today. Football's 10.5% annual rate of return beats Bud. But the NBA and NHL fall short. The average basketball team has increased at an 8.8% annualized rate since 1992, to $634 million. Hockey team values have increased 9.1% annually, to an average of $413 million.

In terms of growth, both financially and popularity, Selig's tenure has been a smashing success. The game has never been healthier.

The Forbes article includes a slideshow with the franchise valuation breakdown for each team, including revenue and operating losses. Here is the list of overall franchise values:

  1. New York Yankees - $2.5 billion
  2. Los Angeles Dodgers - $2 billion
  3. Boston Red Sox - $1.5 billion
  4. Chicago Cubs - $1.2 billion
  5. San Francisco Giants - $1 billion
  6. Philadelphia Phillies - $975 million
  7. Texas Rangers - $825 million
  8. St. Louis Cardinals - $820 million
  9. New York Mets - $800 million
  10. Los Angeles Angels - $775 million
  11. Atlanta Braves - $730 million
  12. Seattle Mariners - $710 million
  13. Washington Nationals - $700 million
  14. Chicago White Sox - $695 million
  15. Detroit Tigers - $680 million
  16. Baltimore Orioles - $620 million
  17. San Diego Padres - $615 million
  18. Toronto Blue Jays - $610 million
  19. Minnesota Twins - $605 million
  20. Cincinnati Reds - $600 million
  21. Arizona Diamondbacks - $585 million
  22. Colorado Rockies - $575 million
  23. Pittsburgh Pirates - $572 million
  24. Cleveland Indians - $570 million
  25. Milwaukee Brewers - $565 million
  26. Houston Astros - $530 million
  27. Miami Marlins - $500 million
  28. Oakland Athletics - $495 million
  29. Kansas City Royals - $490 million
  30. Tampa Bay Rays - $485 million
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