By Tony Price, AIF®
When we think about assets, we usually consider investments, retirement accounts, or real estate. But what about sports teams? Can sports teams be considered assets?
In fact, major league sports teams are huge assets for mega investors (mega, as in multi-billions). While you might not be investing your money in a Major League Baseball (MLB) team anytime soon, it's still interesting to look at some of the most valuable MLB teams.
Let's see how much the top five teams are worth. Think you can guess them all?
How to Determine Franchise Values
Most of the franchise valuation data was pulled from Forbes. Before we dive into the teams and their valuations, we should discuss what is considered in the value calculations. The listed team values are enterprise values, meaning they include equity plus net debt. Revenue and operating income were also calculation factors but excluded ownership stakes in regional sports networks.1
Top 5 Most Valuable MLB Teams
Now, let's look at the top 5 MLB teams and what makes them so valuable.
#5 - San Francisco Giants
Over the past 20 years, the San Francisco Giants' franchise value has grown almost exponentially, and they are currently valued at $3.49 billion. Their three most recent World Series wins in 2010, 2012, and 2014 helped accelerate their growth.
Even in years when they didn't win the World Series, the Giants remained a top-performing league team. In 2021, the Giants held the best record in baseball, with 107 wins—the most in franchise history—and won the National League West crown for the first time since 2012, just one game ahead of the Los Angeles Dodgers.2 Also, the Giants are one of the longest-standing MLB teams and have great legends like Barry Bonds, Willie Mays, and Willie McCovey.
#4 - Chicago Cubs
At the time of writing, the Chicago Cubs are valued at $3.67 billion. Talk about asset appreciation—The Ricketts family bought the team for $846 million in 2009, so their investment has more than quadrupled.
Some of this growth is due to the franchise's rich history, as well as the Cubs' 2016 World Series win, which broke the team's 108-year dry spell. In addition to being one of the most valuable teams, the Chicago Cubs also play at one of the country's most iconic ballparks—Wrigley Field. They've played at the field since 1916, and to this day, the ballpark includes some blasts from the past, such as a manual scoreboard, ivy-covered brick walls, and a smaller footprint than most newer stadiums.3
#3 - Boston Red Sox
Coming in at number three, the Boston Red Sox are currently valued at $3.465 billion. They have consistently performed as a top team throughout their franchise history, with 9 World Series titles, 14 American League (AL) Pennants, and 10 AL East Division titles. With the team's rich history dating back to 1901, it's no wonder that fans continue to flock to Fenway Park to watch one of the most popular MLB teams do what they do best.
#2 - Los Angeles Dodgers
There's no denying that Los Angeles (LA) itself is a megacity. In fact, with a population of about 18.7 million, LA is the second largest metro area in the country (behind New York). Add in a super-successful MLB team like the Dodgers, and you have yourself the second most valuable MLB team. Currently, the Dodgers are worth about $3.57 billion. They've also had quite the run lately, having won the World Series in 2020 and the National League in 2020, 2018, and 2017. They also won the West Division title every year from 2013–2020. With this kind of record, it's no wonder the Dodgers have seen such huge growth. Their value has more than doubled since 2012, skyrocketing from about $1.4 billion to $3.57 billion today.
#1 - New York Yankees
The New York Yankees rank first as the most valuable MLB team and are currently worth $5.25 billion. This comes as no surprise to Yankee fans, with the team's impressive record of 27 World Series titles, 40 American League championships, and 19 East Division titles. Based in the country's largest metropolitan market, the Yankees draw fans from all over the world. The list of famous Yankees is quite long and includes greats like Lou Gehrig, Babe Ruth, Derek Jeter, Mickey Mantle, Yogi Berra, and many more. Baseball doesn't exist without the Yankees.
What do you think of these valuations? Are you surprised at how much some of these MLB teams are worth? Also, are you surprised that most of them are appreciating assets in their owners' portfolios? While your financial adviser might not recommend investing in an MLB team as part of your financial strategy, it's still fun to examine the numbers behind the game.
This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.