clock menu more-arrow no yes

Filed under:

Royals valued at $1.025 billion according to Forbes

New, 5 comments

Eric Stonestreet has quite an investment.

Boston Red Sox v Kansas City Royals Photo by Ed Zurga/Getty Images

The Royals are worth an estimated $1.025 billion, according to the annual franchise valuations by Forbes magazine. An ownership group led by local businessman John Sherman agreed to purchase the club for $1 billion last summer. The valuation is unchanged from Forbes’ valuation a year ago, when David Glass still owned the team.

The valuation still puts the Royals as one of the least-valuable franchises in baseball, with only the Miami Marlins worth less at $980 million. The Yankees are the most valuable franchise in baseball, according to their estimates, with a value of $5 billion, followed by the Dodgers, Red Sox, Cubs, and Giants.

According to Forbes, the Royals had revenues of $251 million last year, and an operating income of $27 million. This came despite an 11 percent drop in attendance, with only 1.4 million fans coming through the turnstiles in 2019, the lowest attendance in club history since 2006. Forbes estimates the Royals took in $49 million in gate revenues last year.

Their operating profit was due largely to a 19 percent cut in player payroll, down to $100 million on Opening Day last year with $122 million in total player expenses, according to Forbes. The Royals are likely to have an even lower player payroll this year, with a projected payroll of just over $80 million. They will also begin a new television deal that is expected to pay them around $50 million per year, double what they were earning under their old deal.

Forbes also lists the Royals as having a 24 percent debt-to-value ratio, the third-highest among all clubs. While it doesn’t go into specifics, it can be presumed that this is due to the sale of the club last year to the Sherman-led ownership group. The Rangers, who are financing a brand new stadium, have a 43 percent debt-to-value ratio, while the Marlins, who were sold in 2018, have a 41 percent debt-to-value ratio.

MLB clubs rose in value by 4 percent last year, with the average club valued at $1.85 billion. Clubs as a whole made $10.5 billion in revenues, with $3.1 billion coming from national TV deals, $2.2 billion from local media deals, and $3.2 billion from gate revenues.

With the season on hold for the coronavirus pandemic, many of these valuations are in jeopardy. It is unclear when baseball will be able to return, although some have floated the idea of beginning in May or June with teams confined to playing their regular season from their spring training homes, isolated from the rest of the world.