The Royals are valued at $950 million, according to Forbes Magazine’s annual valuation estimates of MLB franchises. That is a 10% increase over the $865 million the publication valued the Royals at last year, fresh off their World Series victory. Despite missing the playoffs, attendance remained strong for the club, with 2.5 million fans visiting the K, sixth-most in the American League and the second-most in franchise history. Forbes does note that the Royals had a $900,000 operating loss last year, likely due to the franchise-record $144 million payroll, but that the team made over $65 million in 2014-15 combined.
According to Forbes estimates, the Royals will bring in $246 million in revenues while paying out $156 million in player expenses. They break down the valuation as $394 million attributable to revenue shared among all teams, $280 attributable to its regional market, $193 million to Kauffman Stadium, and $84 million to its brand. David Glass purchased the Royals for $96 million back in 2000.
Overall, the average MLB franchise is now valued at $1.5 billion, up 19% from last year. The Yankees top the valuation list, with an estimated worth of $3.4 billion. They are followed by the Dodgers, Red Sox, Cubs, and Giants, all worth over $2 billion. The Royals rank 24th in franchise value among all teams, with only the Marlins, Brewers, Indians, Reds, Athletics, and Rays valued at less.
According to Forbes, teams are reaping much bigger incomes this year, with players costs increasing at a slower pace than league revenues. MLB has signed very lucrative national TV deals in the past few years, is enjoying strong attendance figures, and has also developed a very lucrative business owned by all 30 teams called MLBAM, an advanced media company worth around $3.5 billion.
The average team value has increased at a compound annual rate of 11.5% since our first valuations in 1998. In contrast, the stock market has gone up 3.5% annually.
The Royals began the 2017 season with the highest Opening Day payroll in franchise history, at $145 million. The value of the Royals could go up significantly if they sign a lucrative new television deal. Their current deal with Fox Sports Kansas City is worth only $20 million per season, one of the lowest in baseball. That deal is set to expire after the 2019 season. The Royals also do not own an equity stake in FSKC, unlike most other clubs, which own a piece or all of their regional sports network. Forbes also notes some larger clubs like the Giants and Cubs have begun to make investments in real estate, generating even more revenues.