Thursday, April 17, 2008

Forbes Magazine Lists Values of Franchises; The Orioles 18th

The newest edition of Forbes magazine has it's annual estimates of the worth of each baseball franchise listed, and again -- the Evil Empire is on top with 1.3 billion, and second are the Mets and then Red Sox.

Well, the Orioles are ranked 18th with a value of 398 million. Now, I am not an economist or much less know finance aside from going online and checking my back account, but yes folks, the Orioles are making money.

From Forbes: "Despite his franchise's stumbling badly on the diamond for years, Baltimore Orioles owner Peter Angelos is guaranteed a minimum yearly gross of $130 million and a price of at least $360 million should he sell his franchise, thanks to a deal he brokered with Major League Baseball to let the Montreal Expos move to Washington, D.C. three years ago. Even better, the guaranteed selling price increases through an escalator clause in the deal as baseball team values increase. The deal also granted Angelos a controlling share (though profits are split evenly) in a regional sports network that broadcasts Orioles and Washington Nationals games."

The Orioles' operating income (basically, earnings before taxes, etc.) is 7.7 million, although not lofty and they're near the bottom -- they are still making money.

Despite the lack of butts in the seats, and whatever else -- the team has made a profit, which is the point in all of business.

Granted, the numbers may be off by a million or so, the fact of the matter is in light of the state of the team and although the operating income has dropped quite a bit from previous years - let's not cry poverty for the Baltimore ownership.

In fact, don't cry for any owner.

The sport is making more money than ever before and being a baseball owner is a great way to make income.

Although some owners may be crying about the lack of money they make, don't feel sorry for them. The value of franchises keep going up year by year, thus, everyone is winning.

Two things I noticed -- it looks like the Yankees and Red Sox are losing money -- however, look at the value of their franchise and how much it has gone up over the years. Yes, the teams are not making revenue, but look at how much attention, and free advertising they get from Fox Sports and ESPN because of their talent level. Nothing can buy that.

The other thing: The Florida Marlins, Washington Nationals, Minnesota Twins, Tampa Bay Rays and Pittsburgh Pirates (to a lesser extent) all made money despite finishing in the second division last year. You've got to wonder if some owners really care about winning -- or the greenbacks?

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