It’s Big, Big Business - The Missourian: Columns

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It’s Big, Big Business

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Posted: Saturday, April 27, 2013 6:32 pm

We all know professional sports are in the category of Big Business. Some years ago we thought the pro sports bubble would burst due to high salaries and other costs. Right now we don’t feel that way. Why?

Credit the fans, who still buy the high-priced tickets because of the love affairs with football, baseball, basketball, golf and several other minor businesses, such as tennis, to name one. Of course, there is auto racing, and horse racing, both of which are popular and have rich pots that go to the winners.

Then there is the income from television and radio rights, the Internet, and the winners make bundles of money from endorsement of products and sponsorships. There seems to be no end to the money stream that flows to the winners, and even to losers.

A recent Forbes magazine issue had a story on “Baseball’s Grand Slam.” Forbes has been tracking baseball finances since 1998. The average value of a pro baseball franchise is up 25 percent the past year. The St. Louis Cardinals’ franchise is valued at $716 million. That’s up 21 percent. The Cardinals rank No. 10 in the value of the franchises. The highest value goes to the New York Yankees at $2.3 billion! Wow!

Others in the top 10, in order under the Yankees are Los Angeles Dodgers ($1.6 billion), Boston Red Sox ($1.3 billion), Chicago Cubs ($1 billion), Philadelphia Phillies ($893 million), New York Mets ($811 million), San Francisco Giants ($786 million), Texas Rangers ($764 million), Los Angeles Angels, ($718 million), and No. 10, the Cardinals, as mentioned, at $716 million.

At the bottom in value, according to Forbes, is the Tampa Bay Rays, $451 million. The average of a franchise value is $744 million. Four teams did show a drop in operating income the past year. At a nearly $13 million drop in operating income was the Angels.

We hear and read much about the high salaries for players. The 10 highest paid players this year will receive $237 million in salaries and $14 million from endorsements. Leading the pack is Alex Rodriguez of the Yankees at $29.5 million. The next top four are: Derek Jetter of the Yankees at $26 million, Johan Santana of the Mets, $25.9 million, Joe Mauer of the Twins, $25.5 million, and Felix Hernandez of the Mariners, $25.3 million.

Are they worth that much money? We’d say no, but that’s what the market price is, and what team owners are willing to fork up.

This season, the aggregate opening-day major league payroll was $3.2 billion. The Los Angeles Dodgers team was at the top with a payroll of $213 million, according to Forbes.

The take me out to the ball game spirit, like the players’ pay, has never been higher.

/opinion/columns