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Forbes values the Royals at $1.025 billion

MLB teams had record operating income in 2018.

Chicago Cubs v Kansas City Royals Photo by Ed Zurga/Getty Images

The Royals are worth an estimated $1.025 billion, according to Forbes magazine in its annual estimates on baseball team valuations. Despite a 104-loss season, the valuation is up 1 percent from last year’s estimate of $1.015 billlion. David Glass purchased the Royals for $96 million in 2000. According to Forbes, baseball teams have had a compound annual rate of growth of 11 percent over the last 22 years.

The estimate still puts the Royals near the low end of most-valuable franchises in baseball with only the Rays and Marlins valued at less. The Yankees top the list, worth an estimated $4.6 billion, followed by the Dodgers, Red Sox, Cubs, and Giants.

According to Forbes, last year was a very profitable one for baseball with record average operating income of $40 million per team. Revenues overall went up 4.8% to $330 million per team, while player salaries remained stagnant. Forbes estimates the Royals will make $5.3 million in operating income in 2019 after two consecutive seasons of losing money. Forbes estimates the Royals made well over $60 million over 2015-2016 combined. The Royals cut payroll to $100 million this year after paying over $140 million in 2018.

With a rough year in the standings, attendance fell last year for the Royals, with just 1.66 million fans coming to Kauffman Stadium, a 25 percent drop from 2017. Still, the team made $55 million in gate receipts, according to Forbes.

MLB teams split $2.76 billion in national television money from their deals with Fox, ESPN, and TBS. Teams also made a combined $7.29 billion in local television revenues, although the Royals are considered to have one of the lowest-earning deals in baseball. That deal with Fox Sports Kansas City, which pays around $20-25 million per season, expires this year. The Royals were second in baseball in average local television ratings last year despite an awful season.

Sports franchises generally do not make their accounting numbers public, but some teams, like the Braves, are owned by publicly traded companies allowing us a glimpse at their figures. The Forbes estimates have generally come in lower than what teams have actually been sold for, highlighting just how rapid the inflation is in sports franchise valuation.