Despite pandemic, MLB franchises gained value in 2020

Major League Baseball teams generally survived the 2020 pandemic with minor gains in franchise value. They did so despite sustaining predictably heavy losses in both operating revenues and operating income.

Forbes released its annual assessment of the financial status of all 30 MLB teams this week.

MLB franchises gaining value

The data showed average 2 percent gains in franchise value, from about $1.87 billion last year to about $1.91 billion today. Forbes found that the value of 10 of the 30 teams increased during 2020, none actually declining.

The 10 teams that gained value during 2020 were:

• New York Yankees, from $5 billion to $5.3 billion.
• Los Angeles Dodgers, from $3.4 billion to $3.6 billion.
• Boston Red Sox, from $3.3 billion to $3.5 billion.
• Chicago Cubs, from $3.2 billion to $3.4 billion.
• San Francisco Giants, from $3.1 billion to $3.2 billion.
• New York Mets, from $2.4 billion to $2.5 billion.
• Philadelphia Phillies, from $2 billion to $2.1 billion.
• Atlanta Braves, from $1.8 billion to $1.9 billion.
• Toronto Blue Jays, from $1.6 billion to $1.7 billion.
• Kansas City Royals, from $1 billion to $1.1 billion.

The top 10 most valuable franchises remained unchanged from 2020. In order, they are the Yankees, Dodgers, Red Sox, Cubs, Giants, Mets, Cardinals, Phillies, Angels, and Nationals. The Atlanta Braves moved into 11th spot, replacing the Houston Astros, which fell to 12th.

Financially, the franchise values represent an estimate of the potential sale price of the franchise if available on the open market. It considers, but does not necessarily represent, either year-to-year revenues and/or income. Both of those figures obviously took substantial hits during the Covid-shortened 2020 season.

Forbes found that on average, MLB teams had $122 million in operating revenues in 2020. Generally, those revenues derive from four sources: shared revenues from the sport as a whole, market-based revenues, stadium revenues and brand-related revenues.

That represented an average $224 million decline from previous-season revenues, leaving most teams operating at about a 33 percent level. In raw dollars, the amounts ranged from $96 million for the Miami Marlins at the low end up to $185 million for the Los Angeles Dodgers.

Deducting expenses, all 30 teams operated at a substantial raw-dollar loss in 2020. The average net loss in operating income was about $60 million, ranging from a low of $20 million for the Cleveland Indians to about $190 million for the Yankees.

During the previous season, teams averaged about $49.8 million in net operating income, about $110 million more than in 2020.

In a normal season, teams derive about 37 percent of their values from sport-wide sources, another 36 percent from their home market, about 16 percent from stadium operations, and a final 11 percent from brand-related sales. In 2020, sport-wide revenues – largely network media contracts — accounted for more than two-thirds of team revenues on average, with market revenues – generally local media contracts — accounting for most of the rest.