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New York Yankees top MLB valuations list again

By Derek Helling

Mar 23, 2016; Melbourne, FL, USA; New York Yankees starting pitcher Masahiro Tanaka (19) throws a pitch in the first inning against the Washington Nationals at Space Coast Stadium. Mandatory Credit: Logan Bowles-USA TODAY Sports
Mar 23, 2016; Melbourne, FL, USA; New York Yankees starting pitcher Masahiro Tanaka (19) throws a pitch in the first inning against the Washington Nationals at Space Coast Stadium. Mandatory Credit: Logan Bowles-USA TODAY Sports /
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With Major League Baseball’s regular season quickly approaching, Forbes released its MLB valuations list. Once again, the New York Yankees top the list at $3.4 billion.

There is good news for more than just the Bronx Bombers, however. The average MLB team is now worth $1.3 billion, a seven percent increase from 2015 and 59 percent increase from 2014 according to Mike Ozanian. Total league revenue is up the same seven percent, to $8.4 billion.

Ozanian lays out three reasons for the continued financial growth of MLB: asset monetization and investment diversification, broadcast revenue and MLB Advanced Media.

The most valuable teams on Forbes’ list are those who have been able to monetize their facilities and resources to the utmost extent. Ozanian explains how the Yankees have diversified their assets into the YES Network, Major League Soccer and college football. The Los Angeles Dodgers, this year’s most valuable National League team at $2.5 billion, are the beneficiaries of their involvement with Time Warner Cable. It’s all about making your resources profitable in ways other than baseball games.

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Broadcast revenue is the obvious component here. It’s the major reason why the average team value is up 146 percent from 2006, as the value of these deals have skyrocketed over the past 10 years.

MLBAM is sort of the variable in this equation. The content machine has exploded in productivity due to the introduction of Statcast and the potential to monetize such content is seemingly endless. MLB will continue to push the program, because its 30 member clubs alone own MLBAM. Futher technological developments, ways to involve advertising space and methods to deliver content to consumers will only mean more revenue.

For individual clubs, the news is mostly good. All but five teams (the Baltimore Orioles, San Diego Padres, Milwaukee Brewers, Cleveland Indians and Oakland Athletics) increased their valuations from 2015, and four of those five didn’t lose any value. The only team to drop in value from 2015 was Cleveland, and the difference was a mere three percent.

The biggest movement in the rankings from 2015 belongs to the Houston Astros, who jumped from 26th last year to 15th this year, thanks to an increase of valuation from $800 million in 2015 to $1.1 billion this time around. Because they stood pat in valuation, San Diego was the furthest to fall, moving down four slots to 23rd.

In what should be considered good news for the more valuable teams and daunting for the teams on the bottom rungs of this ladder, the top 10 teams on this list are the same top 10 from 2015. To further demonstrate the consistency of these teams’ financial performance, eight of those 10 teams are in the exact same slot as they were last year. The only small change is that the New York Mets and St. Louis Cardinals swapped the sixth and seventh spots from 2015, with New York moving up to sixth and St. Louis falling to seventh.

Of the 30 teams, 17 are now valued at least a billion dollars, meaning that more than half of MLB’s teams have now crossed that benchmark. The Arizona Diamondbacks and Pittsburgh Pirates are on the verge, and if they replicate last year’s growth, they will be valued at over a billion in next year’s list. It will be quite a while before every MLB team will be worth at least a billion, as the Tampa Bay Rays bring up the rear at $650 million, but even they are headed in that direction.

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The bottom line, which is what this is all about, is that MLB is financially sound and its fiscal power is expanding. With several teams looking to grow their reach and build the community around their ballparks up into all-inclusive destinations for not just baseball fans but the general public, we might be looking at a total revenue figure over $9 billion very soon.

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