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You need a new type of scorecard to accurately

doujl001 posted @ 2015年2月09日 13:44 in 未分类 , 11015 阅读

You need a new type of scorecard to accurately measure the wealth of Major League Baseball these days because team owners are scoring in so many different ways.

Upshot: The average baseball team is now worth $744 million, 23% more than a year ago and the largest increase since we began tracking MLB finances in 1998. During the 2012 season, revenue (net of stadium debt service) rose 7%, to an average of $227 million per team. Operating income (earnings before interest, taxes, depreciation and amortization) per team fell 9%, to $13.1 million, mainly due to higher player costs and stadium expenses (Forbes SportsMoney co host Bob Lorenz and I discuss MLB's finances in the video that appears at the end of this post).

Why did values climb sharply despite falling profitability? Because to fully capture the value of MLB's 30 teams it is necessary to keep score of the sport's full portfolio of assets rather than just the cash flow of the individual franchises. Our valuations were boosted by the escalating television rights fees that flow to each team, and the climbing values of Major League Baseball Advanced Media and the league's investment fund.

National broadcasting fees are baseball's biggest chunk of equally shared revenue. Last year, Fox, TBS and ESPN inked new, eight year broadcasting deals that will bring MLB a total of $12.4 billion over eight years an average of $52 million a season for each of the league's 30 teams through 2021. The new deals begin with the 2014 season and are worth more than twice the league's existing television contracts. Baseball has more inventory than any sport and with the national cable sports networks Fox Sports One, ESPN and NBC Sports battling it out for supremacy over couch potatoes, MLB was in a particularly strong negotiating position.

Special Report: The Business of Baseball

Another big contributor to team valuations is MLBAM, baseball's highly profitable, fast growing digital arm, which generated an estimated $650 million in revenue last year. It could be worth over $6 billion if you give it a similar enterprise value sales ratio as Facebook. MLBAM was launched 13 years ago and every team owns an equal share, making its success particularly important for low revenue teams. The At Bat app hit a grand slam last year: it was downloaded 6.7 million times (more than twice the combined downloads from 2011 and 2010) and is the top grossing sports app of all time.

A hidden gem: baseball's investment portfolio. (BELP), of which each of the 29 teams that had owned the Expos had an equal share (those assets were subsequently transferred to a new BELP, which is owned equally by all 30 teams). MLB also rolled in wholesale nfl jerseys a portion of baseball's Central Fund, which distributes the revenue from the league's equally shared national television and radio, Internet, licensing, merchandising and international deals.

The gross amount of Central Fund revenue for each team in 2012 was $50 million, but the league kept $7.5 million (the money belongs to the teams and is booked as an "account receivable" on their balance sheet). Commissioner Bud Selig oversees the fund. BELP has invested in hedge funds and the league has earned double digit returns on its investment portfolio. Each team now has Central Fund and BELP investments worth $40 million to $45 million combined.

On behalf of SD Padres' fans: Your valuation of the Padres rose dramatically after the second (final) Moores' sale and rightly so. But the team's debt/value percentage remained more or less the same (49 50%).

Why? We've been told that the new ownership group was not undercapitalized, unlike the Moorad Group. We have NOT been told that the new owners financed the sale. But that seems the only likely explanation for the high debt level. Was there something in the news about the sale that we missed? Thanks!

Thanks, but I wonder, where did you get that information? Like many obsessive compulsive baseball fans who follow their team's actions too closely for their own health, I hadn't seen that reported true also for K wholesale jerseys Van Buren, who started this comment thread.

Furthermore, this either contradicts what you replied to her, or I just can't connect the dots.

She asked why the debt was high, and had not heard that the new buyers had financed the sale.

You replied that the former owners kept the $200MM upfront payment which is why the debt ratio remained the same (which it didn't).

Sodoes that answer to her equate to debt was used to finance a portion of the purchase (apparently, $100MM of it)?

Also, what everyone else reported isn't so much that the former owners "kept" $200MM it was rolled into the price ($600MM for the club, and $200MM for the value of the TV deal). Semantic hair splitting, perhaps, but a valid difference in that some of the minority owners stayed in, thus reducing the overall sales price by their cut.

Finally, thanks for putting this together. Must be a huge effort to hunt down, compile and collate the material. It's by definition flawed, but it's the best data we have. Much appreciated.

You're comments are flawed (perhaps by definition?), so let me correct you. First, she (Kathleen) didn't ask "why debt was high". She asked why the "debt/value ratio remained more or less the same." Second, since she introduced the point that the debt ratio was "more or less the same" before and after the sale of the team, my reply to her was based on her parameters, thus no contradiction on my part. Third, purchase prices are enterprise values. In the real world, there is no such thing as "rolled into the price." The enterprise value was $800 million, which includes the grossed up value for 100% of the team, the team's ownership interest in the ballpark and the team's ownership interest in the RSN.

For the most part, baseball teams are not owned by individuals. They are owned by investment vehicles or limited partnerships. For example, Jerry Reinsdorf is the Managing Member and Chairman on the Chicago WhiteSox. These investment vehicles may have dozens of investors who are considered partners or owners. When Forbes lists the owners, they often times do not reference the fact that it is a limited partnership led by someone. In some cases, the Managing Member may not be the largest investor. Going forward, Forbes should acknowledge the existence of the limited partnership rather than just the individual.

I am working on my business statistics project for the semester. Part of the information I need is MLB teams' revenue by year. In the article you mentioned that Forbes has done this since 1998. Do you have this archived anywhere that the public can view it?

If you were interested, my project is tracking the attendance and hopefully revenue two years prior and three years after winning a World Series or making the playoffs for the first time in five years.

I was inspired by Lew Wolff's comments about paying for good players not resulting in a difference in revenue.

I like to take lots and lots of numbers and turn them into proprietary concepts and multi platform content. Three of my longstanding publishing creations: the valuations of sports teams, ranking actors and movie studios on bang for the buck (ROI) and the Forbes Fab 40 (the most valuable sports brands). My most recent idea was Names You Need To Know, which broadened my concept of list creation to include direct input from our audience. I also like to take apart corporate balance sheets to measure earnings quality and have a passion for economics (my MBA thesis at Long Island University was an empirical study on the cause of inflation in which regression analysis showed a significant correlation between the general level of prices and the money supply). Besides being an Executive Editor at Forbes I also have a gig as co host and Managing Editor of the 2 time New York Emmy award winning Forbes SportsMoney on the YES Network with my buddies, co host Bob Lorenz and producer David Alfreds, both of whom have taught me a tremendous amount. My brother in arms is Kurt Badenhausen, whom I have worked with for many years and knows more about sports numbers than anyone.

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