Baseball is becoming a billion dollar business. On Wednesday, Bloomberg released their valuations of MLB clubs. They estimate the average value of a major league baseball team is $1 billion. Yes, billion. According to the article, that's 35 percent higher than previous estimates.
From the article:
In calculating team value, Bloomberg News examined revenue from ticket sales, concessions, sponsorships and broadcast rights, as well as interests in TV channels, radio stations and real estate.
As you would imagine, our Royals are down toward the bottom of the list.
In fact, they're 29th out of 30 teams, worth an estimated $540 million. They're ahead only of Tampa Bay, who are estimated at worth $530 million.
Let's look at the Bloomberg breakdown:
Team Revenue: $180 million
The Royals are ahead of only Tampa and Oakland when it comes to revenue.
Gate Receipts: $37 million
The Royals drew 1,750,754 through the turnstiles this year. A gain of about 11,000 from the previous year and their best attendance since 2009.
Concessions: $11 million
The food at The K is god awful. The beer is overpriced. If you're smart, you stop at Gates on 40 Highway and brown bag it. It didn't seem like I went to many games this year, but I estimate I spent maybe a grand total of $20 in concessions.
Sponsorship: $14 million
Since the stadium doesn't carry a corporate name, this seems like an area that has been underdeveloped by the team. Surprising given the signage that circles the stadium. I know this is a hot-button topic among fans, but if the Royals can squeeze some cash out of Cerner or some other corporate citizen of Kansas City, they'd be foolish not to take the check.
Media Rights: $53 million
For comparison, the Yankees media rights are worth $105 million more. The Royals TV deal is abysmal. And long. Kind of stinks when there's a media rights bubble and you're on the outside.
Parking: $4 million
You say you want a downtown stadium? Who are you to turn down $4 million? Huh? Who are you?
Revenue Sharing: $36 million
Nobody can hold his hand out quite like David Glass. My suggestion is we collectively bookmark this post and revisit it when next season rolls around and Forbes comes out with their set of valuations. They always include profit. If the Royals are taking in a boatload of money from the wealthy teams, the honorable thing would be for them to be barely making a profit. They need to be spending all of this money.
Yet I somehow doubt this is happening.
Forbes previously estimated the Royals operating income at $16.3 million. I noted the estimated 2011 operating income of $28.7 million when I wrote the Royals needed to spend more and pocket less. And that was without knowing the amount handed to them via revenue sharing. I don't put much stock into Glass saying his payroll will stay close to the same. But there is a small window where they can commit their dollars for 2014. Glass was signing the same tune around this time last year. But we know what happened with the payroll. Things happen, situations can change, opportunities arise.
We'll see what happens.