MLB Franchise Values Update Based on 2017 Forbes Report
By Martin J. Greenberg & Michael R. Gavin
On February 1, 2017, the article entitled Blast Off! Why Are MLB Franchise Values Skyrocketing at an Astounding Rate? was posted on Sport$Biz with the purpose of shedding some light on how Major League Baseball (MLB) teams have increased in value over the years. With Guggenheim Baseball Management’s acquisition of the Los Angeles Dodgers for a reported $2.0 billion in 2012, the value of MLB teams increased an average of thirty-five percent (35%) between 2012 and 2013. The article assesses and analyzes several factors as to why team values have increased so dramatically, including factors such as former MLB Commissioner Bud Selig’s leadership and vision, national television deals, Major League Baseball Advanced Media (MLBAM), MLB’s Revenue Sharing Program, and the creation of state-of-the-art facilities, among others. The article ended with the prediction that MLB teams would continue to increase in value in the future. Shortly after the article was posted, on April 11, 2017, Forbes released its MLB baseball values for 2017, which absolutely bears out the prediction of the Sport$Biz post.
According to the Forbes 2017 report, the average MLB team’s value has increased by 18.5 percent (from $1.3 billion average team value in 2016, to $1.54 billion average team value in 2017). Forbes touts that the increasing value of local television deals, along with the MLB’s rising profitability and MLBAM’s continuing surge, were the primary drivers behind the MLB team valuation increase. Additionally, Forbes mentions that MLB teams, on average, “[have] increased at a compound annual rate of 11.5%[,] . . . [whereas] the [U.S.] stock market has [only] gone up 3.5% annually.”
In Forbes’ 2016 report on MLB team values, seventeen (17) of the thirty (30) MLB teams were worth at least $1 billion. In the 2017 Forbes report, there are now twenty-three (23) teams worth at least $1 billion, with the Toronto Blue Jays ($1.3 billion), Pittsburgh Pirates ($1.25 billion), Arizona Diamondbacks ($1.15 billion), San Diego Padres ($1.125 billion), Minnesota Twins ($1.025 billion), and Colorado Rockies ($1 billion) joining the $1 billion team value club. The top ten MLB team values, according to the Forbes 2017 report, are:
Top 10 2017 MLB Team Values
|Rank (Previous Rank)||Team||2017 Value||2016 Value||Increase ($)||Increase (%)|
|1 (1)||New York Yankees||$3.7 billion||$3.4 billion||$300 million||8.9%|
|2 (2)||Los Angeles Dodgers||$2.75 billion||$2.5 billion||$250 million||10.0%|
|3 (3)||Boston Red Sox||$2.7 billion||$2.3 billion||$400 million||17.4%|
|4 (5)||Chicago Cubs||$2.675 billion||$2.2 billion||$475 million||21.6%|
|5 (4)||San Francisco Giants||$2.65 billion||$2.25 billion||$400 million||17.8%|
|6 (6)||New York Mets||$2 billion||$1.65 billion||$350 million||21.2%|
|7(7)||St. Louis Cardinals||$1.8 billion||$1.6 billion||$200 million||12.5%|
|8 (8)||Los Angeles Angels of Anaheim||$1.75 billion||$1.34 billion||$410 million||30.6%|
|9 (10)||Philadelphia Phillies||$1.65 billion||$1.235 billion||$415 million||33.6%|
|10 (9)||Washington Nationals||$1.6 billion||$1.3 billion||$300 million||23.1%|
The new 2017 Forbes report states that the hometown Milwaukee Brewers received a value of $925 million, a $50 million (or 5.7 percent) increase from last year’s report. Of this $925 million valuation, $399 million is attributable to the Brewers’ Revenue Sharing Program receipts, along with a $272 million value for Milwaukee’s city and market size. Additionally, Forbes values Miller Park, the Brewers’ home ballpark, at $173 million, and the team’s brand at $80 million. This leaves a $1 million rounding adjustment to come up with the grand total of $925 million.
Despite being in a rebuilding mode for at least another few years, coupled with losing 183 games between the 2015 and 2016 seasons, the Brewers’ are still increasing in value. Although both attendance and television ratings were down nine percent (9%) and twenty-five percent (25%) respectively in 2016, the Brewers are tapping into additional revenue streams to help mitigate any lost revenue in these two areas. For example, the Brewers are focusing on their concert offerings at Miller Park, where they brought in country music superstar Kenny Chesney for a concert last season that earned $4.8 million in gross sales. The Brewers also have an agreement with Ballpark Music to bring several more concerts to Miller Park for the 2018 season. This agreement with Ballpark Music will provide a significant financial boost to the Brewers, in which all revenues from concerts are kept entirely by the Brewers, along with all revenues generated from parking, food, and merchandise.
Overall, MLB teams still continue to be a great investment that provide annual returns to their owners. The lowest valued team according to the 2017 Forbes report is the Tampa Bay Rays at $825 million, who experienced a twenty-seven percent (27%) increase in value from 2016. Soon enough, all thirty MLB teams will be worth at least $1 billion. With MLB revenues expected to reach $12.5 billion this year (up about $2.5 billion from 2016) and expected to increase each year, MLB team values should continue to skyrocket into the foreseeable future.
The original article was posted here on February 1, 2017: http://www.greenberglawoffice.com/mlb-franchise-values-skyrocketing/
 Martin J. Greenberg & Michael R. Gavin, Blast Off! Why Are MLB Franchise Values Skyrocketing at an Astounding Rate?, Greenberg L. Off.: Sport$Biz (Feb. 1, 2017), http://www.greenberglawoffice.com/mlb-franchise-values-skyrocketing/.
 Mike Ozanian, Baseball Team Values 2017, Forbes (Apr. 11, 2017), https://www.forbes.com/sites/mikeozanian/2017/04/11/baseball-team-values-2017/#3155eee82451.
 Id.; Greenberg & Gavin, supra note 1.
 Ozanian, supra note 2.
 Mike Ozanian, Baseball’s Most Valuable Teams, Forbes (Mar. 23, 2016), https://www.forbes.com/sites/mikeozanian/2016/03/23/baseballs-most-valuable-teams/#77b1975d1e02.
 Id.; The Business of Baseball, Forbes, https://www.forbes.com/mlb-valuations/list/ (last visited Apr. 25, 2017).
 Milwaukee Brewers on the Forbes MLB Team Valuations List, Forbes, https://www.forbes.com/teams/milwaukee-brewers/ (last visited Apr. 25, 2017).
 Regular Season Standings: 2015, MLB, http://mlb.mlb.com/mlb/standings/#20151004 (last visited Apr. 25, 2017); Regular Season Standings: 2016, MLB, http://mlb.mlb.com/mlb/standings/#20161002 (last visited Apr. 25, 2017).
 Greenberg & Gavin, supra note 1.
 Bruce Murphy, Murphy’s Law: The Failed Promise of Miller Park, Urban Milwaukee (Apr. 20, 2017), http://urbanmilwaukee.com/2017/04/20/murphys-law-the-failed-promise-of-miller-park/.
 Tampa Bay Rays on the Forbes MLB Team Valuations List, Forbes, https://www.forbes.com/teams/tampa-bay-rays/ (last visited Apr. 25, 2017).
 Interview by Mike Gousha, Distinguished Fellow in Law and Public Policy, Marq. U. L. Sch., with Bud Selig, Commissioner Emeritus, MLB, at Marq. U. L. Sch. in Milwaukee, Wis. (Apr. 12, 2017), at 15:18, https://law-media.marquette.edu/Mediasite/Play/b68a2b14b9504883a4afe72c9cb274291d; Maury Brown, MLB Sees Record Revenues Approaching $10 Billion for 2016, Forbes (Dec. 5, 2016), https://www.forbes.com/sites/maurybrown/2016/12/05/mlb-sees-record-revenues-approaching-10-billion-for-2016/#7be619177088.