Forbes has published it’s annual list of major league franchise values for 2021, and the numbers show that the sport is still thriving, financially. The Detroit Tigers franchise value increased from $1.25 billion to $1.4 billion, an 11 percent jump over the previous estimate. The club made a record $31 million in operating revenue, according to the report.
In fact, every MLB franchise increased in value, with the exception of the Miami Marlins, who remained flat, and the Baltimore Orioles, who managed an operating profit of $83 million despite a four percent drop in value. The Marlins are the only franchise worth under $1 billion, coming in at “only” $990 million for the second straight year.
The average franchise value is now $2.07 billion, which is up nine percent over the past year. Several teams still report a loss for 2021. Despite playing a full schedule, the season began with many teams subject to capacity limitations, often lasting into July or August. That doesn’t figure to be a problem in 2022, although there could be some negative reaction to MLB owners’ lockout and decision to cancel the first two weeks of the season, only to reschedule the games later in the year, often as part of double headers.
Detroit Tigers
The Tigers rank 18th in franchise value among all MLB teams at $1.4 billion. The club has recently inked a new 10 year agreement with Bally Sports that includes both broadcast and digital media rights, which could be worth as much as double the annual revenue of their old contract that paid them $50 million per season. Details of that deal have not been publicly reported.
Forbes estimated that the Tigers had revenue of $268 million, which also ranks 18th in MLB, and is within $5 million of several other clubs, including division rivals in Minnesota, Cleveland, and Kansas City, and $10 million more than the Chicago White Sox. Detroit had steady annual revenue of $275-$276 million from 2016-2019.
New National TV Revenue
MLB has new seven year contracts starting in 2022 with Fox, Turner broadcasting, and ESPN, as well as new streaming deals with Apple and NBC’s Peacock that will increase national media by over 30 percent, bringing in $2 billion annually. This revenue is shared equally among the 30 MLB clubs.
MLB’s National Media Revenue
| Network | 2014- 2021 | 2022 – 2028 | Total Contract | Difference |
|---|---|---|---|---|
| Network | 2014- 2021 | 2022 – 2028 | Total Contract | Difference |
| TBS | $ 325 M | $ 535 M | $3.75 Billion | 210 M |
| Fox | $ 525 M | $ 729 M | $5.1 Billion | 204 M |
| ESPN | $ 700 M | $535M* | $3.75 Billion | -165 M |
| Apple | n/a | $85M | $595 Million | 85 M |
| NBC/ Peacock | n/a | $30M (2 yrs) | $60 Million | 30 M |
| Total | $ 1.55 B | $1.914 B | $13.25 Billion | $379 M |
| *ESPN includes expanded playoffs | ||||
| NBC is a 2 year contract |
The expanded 12 team playoff format will bring in an estimated $85 million from ESPN, plus a share of the gate receipts, but that’s baked into the 30 percent increase. ESPN is dropping from 90 regular season games per season to 30 games, mainly on Sunday nights, while Apple will stream two games each Friday night, and Peacock will pick up mid-week games.
Starting in 2022, teams can sell the right to put patches on uniforms and helmets, which Forbes reports could bring in $400 million per year, or over $13 million per team. Other estimates are in the $8 million range per club, in line with the NBA’s deal that pays them $250 million per season overall.
To put this in perspective, the total cost of increasing minimum salaries from $570,500 to $700,000 for half a roster of players is (13 x 129.500=) $1,683,500. Each team’s share of the new performance bonus pool is $1.67 million, bringing the total of the two to $3.35 million in additional payroll cost per team. Uniform patches would cover that cost with plenty to spare. So, unless teams reverse a five year trend and increase payrolls, clubs can pocket all of the new revenue from national and local media contracts.
A dozen MLB franchises are valued at over $2 billion with the New York Yankees topping the list at $6 billion and the Los Angeles Dodgers at over $4 billion.