Thursday, March 27, 2014

Forbes: Reds 20th-most valuable franchise in baseball

The premier business magazine in America has spoken and it declares the Cincinnati Reds as the 20th-most valuable franchise in Major League Baseball.

So, how much is baseball's oldest professional franchise worth? According to Forbes, the Reds boast an estimated value of $600 million, which believe it or not is actually well below the MLB average of $811 million.

Here's how Forbes justified their calculations:

Forbes team values are enterprise values (debt plus equity) and include completed television deals that begin in the future, but exclude the equity interests in other assets the team may own, such as regional sports networks or concession businesses. Revenues and operating income figures include all revenue and expenses for each team and its stadium where applicable.  

In 2013, the franchise posted total revenues of $209 million. By comparison, the San Diego Padres, ranked as the 17th-most valuable team by Forbes, notched 2013 revenues of $209 million.

Under Bob Castellini's reign as majority owner, the Reds have seen significant increases in both sponsorship and ticket/concession sales, which has undoubtedly been aided by the team's recent on-field success. The future looks good for further financial growth as well. Among other factors, the Reds are in line to receive a considerable boost in revenue when their current television deal runs out.

Overall, the value of MLB franchises continue to trend upwards. The average value of a franchise rose more than 9 percent from 2013. This year also marked the first time five franchises have earned values of $1 billion or more. They include the New York Yankees, Los Angeles Dodgers, Boston Red Sox, Chicago Cubs, and San Francisco Giants. On the flip side, the Tampa Bay Rays earned the distinction of being the MLB franchise with the least value at $485 million. The Kansas City Royals and Oakland Athletics weren't too far behind.

No comments: