Weekend reads: Baseball’s Business


from Kevin Schofield

In celebration of Major League Baseball‘s Opening Day, read an article in Forbes magazine this weekend about how much each of MLB’s 30 teams is worth. Unsurprisingly, the New York Yankees top the list with $6 billion; at the bottom are the Miami Marlins with $990 million. Our home team, the Seattle Mariners, sits in the middle at $1.7 billion.

Most of a team’s value doesn’t come from the strength of the team or the win-loss record; Rather, it depends on how much money the team makes. After all, baseball is a business — one that’s controversially exempt from antitrust laws by the federal government.

Part of this revenue is ticket sales, which have been hit hard in 2020 and 2021 under the COVID-19 restrictions and with the shortened 2020 season. But today, an MLB team has a variety of revenue streams to keep it afloat beyond traditional ticket sales, merchandise and local broadcast rights. Cable broadcasting rights (and satellite systems like DirecTV) have replaced local television stations, further expanding regional and national distribution with a corresponding increase in revenue: Last year, the Los Angeles Dodgers raked in $189 million in local cable broadcasting rights, while ESPN is likely to do at least 65 Paying millions of dollars annually to televise a portion of MLB games nationally (ESPN contract revenue is shared between all 30 teams, giving “small market” teams struggling to earn salaries provide a much-appreciated financial boost (‘wholesale’ teams pay top players). Additionally, Apple and Peacock recently signed agreements to stream games over the Internet, creating additional new revenue streams for MLB clubs.

Sponsorships and advertising are also increasing, for better or for worse. New sponsorship deals for “shirt patches” and “helmet stickers” were created in the new collective bargaining agreement signed between teams and players last month. From the proceeds from these streams, $50 million will go into a new pool to pay bonuses to players not yet eligible for salary arbitration.

One of the interesting things to note when scrolling through the list of teams is that, at least during COVID-19, there is little correlation between a team’s value and its profitability. Last year the Yankees lost $40 million while the Marlins raked in $25 million. The Mariners had a relatively good year with $71 million in revenue (the Mariners have maintained a loyal fan base in Japan for many years, which has generated additional income from international broadcast rights that many other teams do not receive, which is reflected in their bottom line despite setting an improved MLB record for most consecutive years not appearing in the postseason). Certainly a significant part of the revenue gap between teams can be attributed to the expenditure side, particularly including salary commitments that teams have to pay regardless of how many fans are in the stands. In 2019, the median earnings of a major league team was $50 million; in 2020 the average loss was $60 million and last year it rebounded to $22 million in revenue – with 19 teams making money, 10 losing money and one breaking even. According to the article, over the past two years, MLB teams have added $2 billion in debt and $1.5 billion in new equity investments to help them weather the COVID-19 pandemic to stay water. But with the coronavirus appearing to be on the wane (at least for now) and people desperate to get out of the house, Major League Baseball looks set to be a very profitable endeavor in 2022.

Baseball’s Most Valuable Teams 2022: Yankees hit $6 billion as new CBA creates new revenue streams

Kevin Schofield is a freelance writer and founder of Inside the Seattle City Council, a website providing independent news and analysis from Seattle City Council and City Hall. He also co-hosts the Seattle News, Views and Brews podcast with Brian Callanan and appears on Converge Media and KUOW’s Week in Review from time to time.

📸 Featured Image: Photo by MicroStockFactory/Shutterstock.com. Edited by Emerald Staff.

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