By David Mullen
So you may have just received that whopping three-digit tax return check from the IRS. You are thinking about fulfilling a dream and becoming an owner of a major league sports franchise.
Forbes magazine just came out with a study that stated all Major League Baseball teams are now worth more than $1 billion. That means Tampa Bay, Oakland, Pittsburgh, Milwaukee and others are worth more than $1 billion. That is head-shaking at best. If you had millions collecting dust in your bank account, it might make you kick yourself, as many were available decades ago for far less.
Stuart Sternberg bought the Tampa Bay (then Devil) Rays for $200 million in 2004. The Oakland A’s were sold in 2005 for $180 million.
Tampa Bay and Oakland play in facilities that are worse than their minor league facilities. Tampa is an airplane hangar with a scoreboard, but they have a good young team, by the way. They have catwalks in the stadium that come into play and have forced modifications to baseball rules. Hit one catwalk and it is a double. Hit another catwalk and it is a home run. Catwoman could not have come up with these rules in her sinister plots to foil Batman.
The Oakland Coliseum sits in a ghetto. I know, because I grew up there. The Athletics, another good young team, must dodge overflowing toilets that seep into the dugout and locker rooms reminiscent of those in the movie “Hoosiers.” The Coliseum is the only major league facility where both professional baseball and football are played. At least the A’s play outdoors and it is typically sunny during day games. The Rays play in a dome that looks like a broken Easter egg.
Tampa’s AAA team plays in Durham, N.C., home of the Durham Bulls, in a beautiful baseball park. The Oakland A’s AAA club, the Las Vegas Aviators, play in a stadium built for more than $150 million in Summerlin, Nev. It just supports that, in some cases, assets such as stadiums do not increase the value of a franchise.
But in reality, the Miami Marlins are worth less than the Tampa Rays. And Oakland is worth more than baseball teams in Miami, Tampa, Kansas City and Cincinnati.
All of those baseball teams languish in small media markets. Television and radio revenues fill the pockets of teams from New York, Los Angeles and Chicago. Those teams theoretically have a competitive financial advantage, as media revenues are not shared with other teams. Your Texas Rangers are middle of the pack, ranking 13th at $1.65 billion in value according to Forbes.
There are 10 teams in professional sports worldwide worth more than $3 billion. The NBA’s Golden State Warriors are 10th, proving that money can be made in the flatlands of Oakland.
Merchandise sales are ridiculous, and an impending move to San Francisco only increases their value. The NFL’s New York Giants are next at $3.3 billion, primarily because they play in New York, er, New Jersey. LeBron James’ Los Angeles Lakers are eighth just above the Giants. It is amazing that you don’t have to win to make the big time, as evidenced by the New York Knicks’ seventh place slot.
The New England Patriots are worth $3.7 billion, assuming the owner Robert Kraft has not sold his assets to a South Florida massage parlor. The New York Yankees are fifth overall at $4 billion. George Steinbrenner bought them in 1973 for $8.8 million.
Then there are global soccer teams, where the next three most valued franchises are FC Barcelona at $4.06 billion, Real Madrid at $4.09 billion and Manchester United at $4.12 billion. The number one valued franchise has hosted a Super Bowl since they have appeared in one. The Dallas Cowboys are worth $4.15 billion. Jerry Jones paid $140 million for the Cowboys in 1989 (pictured above). So you can still invest that tax return in a sports franchise. It might get you two tickets to a Cowboys preseason game this season.