This week Forbes magazine published its annual estimates of the value of each major league baseball franchise. The Yankees were in first place with a staggering estimated value of $1.2 billion, which represented a 17 percent increase over last year’s estimate.
In fact, all 30 teams increased in value over the past year, as baseball continues to rake in money at a tremendous rate thanks to new television deals, higher ticket prices, and increased ad revenue. Wheras as recently as three seasons ago the 30 teams combined to have an operating loss of $57 million, even before taxes, amortization, and depreciation were factored in, in 2006 the teams combined to have an alltime high operating revenue of $496 million.
Not surprisingly, at the very bottom of the list of teams in terms of estimated value of the franchise were the Florida Marlins at a mere $244 million. But amazingly, the Marlins led all 30 teams with an operating revenue of $43.3 million, whereas the Yankees were dead last with an operating loss of $25.2 million.
The reason for this of course is that the Yankees paid an estimated $70 million in luxury taxes for the 2006 season, and the Marlins received a good portion of that money. While I’m sure the Yankees don’t mind the loss so much, given that the value of their franchise as just increased by about $200 million in a single year (at least according to Forbes), how happy must the Marlins be? Given that their payroll last year was only $15 million – easily the lowest in baseball – that means that nearly about $30 million dollars is going directly into owner Jeffrey Loria’s pockets.
Now it would be one thing if the Marlins were just purposely fielding an uncompetitive team just to turn a profit, but this is not the case. Not only did the Marlins field an extremely talented squad last year that made a legitimate run at the playoffs, but their refusal to trade Dontrelle Willis and Miguel Cabrerra – the only two players on the team who actually make any money – shows that the Marlins actually do plan to try to win when the time is right.
And given that the Marlins have an ridiculous amount of talent, with a quality young player (or in some cases, two) at every position on the diamond, all of whom can reasonably be expected to improve over the next few years, as well as a talented young pitching staff, the time for the Marlins to go deep in the playoffs could come very, very soon. And given that the Marlins increasingly appear to be on track to get a new $500 million retractable-roof stadium in South Florida by 2009 or 2010, the Marlins will soon have a massive new revenue stream to sign some free agents to bolster any holes in their team.
So basically we have baseball’s most profitable team in possession of its most dazzling collection of young talent and about to get a new stadium. Looks to me like the Marlins are going places, and fast. As I’ve written in this space before, everyone criticized the Marlins for the two fire sales they’ve had after their two World Series championships, but given that the young players acquired in the first fire sale led directly to the second World Series crown, and this new crop of players seems likely to contend for another World Series title in the very near future, who’s to say that the Marlin Way isn’t the best way to go?