Archive - October 2013
- Column: MLB Franchise Values ExplodeOctober 28, 2013
Move over, Forbes. Bloomberg has compiled a list of estimated franchise values for MLB teams that is more accurate than anything previously published by Forbes. Bloomberg News analysts spent nine months pouring over data prior to publishing their findings on October 23. The conclusion: The average MLB team is worth $1 billion, more than 35% higher than previous estimates. Ten teams are worth more than $1 billion each. Those numbers pale in comparison to NFL team values, where all 32 teams are worth at least $1 billion. But the fact that so many MLB teams are worth as much as an NFL team came as surprising news to many analysts. Not surprisingly, the Yankees topped the list at $3.3 billion. The Yankees are the sport’s most successful and most recognizable franchise, play in the largest market, had the highest team revenue in 2012 at $570 million, the fourth highest attendance in 2013 at 3.3 million, the highest average ticket price and own a significant portion of their regional sports network (RSN). The Dodgers rank second at $2.1 billion and are largely responsible for the higher overall valuations in MLB.
- Column: Buying Shares in AthletesOctober 21, 2013
“I spent half my money on gambling, alcohol and wild women. The other half I wasted.” W.C. Fields You may not spend the first half of your money like W. C. Fields did, but there’s a new way to spend the second half: Purchasing shares in athletes. Fantex Holdings, a company founded by high profile individuals from the Silicon Valley and Wall Street, has opened a trading exchange for “investors” to buy and sell shares in professional athletes. The company’s co-founder and chief executive, Buck French, has already made one fortune. The graduate of West Point and Harvard Business School sold his dot com company in 2000 for $600 million. Former Denver Broncos’ quarterback John Elway is a member of Fantex’s board.
- Column: Washington RedskinsOctober 14, 2013
What’s in a name? That depends on who you ask. In the marketing world, names are part of your brand, who and what you are and how you are perceived. Brands have “value” that can be monetized. How much a brand is worth depends on your line of business, your percentage of the market and how recognizable you are. The Washington Redskins have been so named for over 80 years. According to Forbes, the Redskins are worth $1.7 billion, the third most valuable franchise in the NFL behind only the Dallas Cowboys and the New England Patriots. The team’s brand, which includes its name, constitutes $145 million of the Redskins’ value. Forbes estimates that the team netted $104 million on revenue of $381 million last year. It should be noted that Forbes is notorious for underestimating both franchise values and team revenues.
- Column: A-Rod's LawsuitsOctober 7, 2013
If a good defense is indeed a good offense, then Alex Rodriguez and his high priced team of lawyers have the playbook memorized. On Thursday A-Rod filed a lawsuit against MLB and Commissioner Bud Selig claiming they have attempted to destroy his reputation and career. The legal basis for the lawsuit is called “tortious interference,” which in this case means the defendants interfered with A-Rod’s ability to perform his contract with the Yankees, action which may prevent him from collecting the $116 million remaining on the contract. The suit was filed on the fourth day of an arbitration hearing to determine if the 211-game suspension A-Rod received for his various roles in the Biogenesis case - alleged by MLB to include the use of performance enhancing drugs, the attempted destruction of evidence, and the recruitment of additional players as clients of the South Florida anti-aging clinic - should be reduced or overturned. Thirteen of the fourteen players who were suspended by MLB accepted their fate without an appeal.