Are MLB team values and their profits positively related? Any correlation between the two? You might think that the Yanks, currently valued at $1.3 billion, would also be the most profitable, given their likewise ranking of #1 in revenue ($327 million). And since the lowly Marlins are only worth $256 million (last), one would think they suffer the greatest operating losses.
Guess again.
Yanks and RedSox ranked #1 and #2, no surprise there, in revenues but also ranked #1 and #2 in terms of least profitable. They also ranked #1 and #3 in team valuation (Mets clocked in at #2). The most profitable? The Nationals, ranked #13 in valuation but a mere #25 in revenues, posted a profit of $43.7 million. Note that the Nationals have been playing in RFK until this year, so expect that revenue ranking to spike. The Marlins, as you'd expect, rank dead last in revenues ($128m) but posted a healthy $35.6 million operating profit, good enough for #2 overall. Given how much they profit, can you now understand why the superpowers are crying for a salary floor or some sort of "rebate".
Five years ago, 16 teams lost money. In 2007 only three teams--Blue Jays ($1.8 million), Red Sox ($19.1 million), Yankees ($47.3 million)--posted an operating loss. But even those losses are misleading. For the owners of the Yankees and Red Sox, the huge dividends they get from their unconsolidated cable networks more than make up for the teams' losses.
I firmly believe that if you are just collecting the fruits of MLB's enforced socialism, you should spend it on improving your organization in some tangible way. Lower prices for the fans if you are not going to invest in the players or development. Some way, other than lining the pockets of ownership. If those lower revenue teams don't spend that money, the teams paying the luxury tax and revenue sharing should get some of that money back.
Here is the table, sorted by Revenues, courtesy of Forbes:
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2 comments:
Good stuff, though I'd take it a step further and say that revenue-sharing monies should only be available to teams looking to stave off a net loss. Sure, they can cook books, but I have a feeling that you'd at least see a reversal in this ludicrous trend.
Diesel,
the accounting games make the operating profit and loss a joke, really. when the yanks can hide profit from YES and show a loss, that's goot P&L management.
it's not the P&L that that should be the barometer for receiving funding; it should be the amount spent on the major league salaries, minor league salaries and the draft, as well as all personnel to scout, manage, develop talent. the lowest spending 5 teams don't get squat the next year.
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