Mike Ozanian is a senior editor at Forbes, and this is a guest column for Bleacher Report.

Baseball has emerged from the recession with a big bang.

The average MLB franchise is now worth $523 million, an all-time high and 7% more than last year. All of the league’s teams rose in value except for three: the New York Mets, San Diego Padres and Cleveland Indians. The increase in team values is the result of greater revenue for teams playing in new stadiums, like the New York Yankees (up 6% in value to $1.7 billion) and Minnesota Twins (up 21% to $491 million) as well as the Florida Marlins (up 13% to $360 million), who are scheduled to move into their new stadium in 2012.

Strong attendance and local television ratings boosted the values for teams like the Philadelphia Phillies (up 13% to $609 million) and Cincinnati Reds (up 13% to $375 million). The Yankees are baseball’s most valuable team for the 14th straight year (since Forbes began valuing franchises in 1998). The gap between the Yankees and No. 2 Baltimore in 1998 was 12%. Today the Yankees are 86% more valuable than No. 2 Boston.

The top 10 MLB teams:

#1 New York Yankees: $1.7 billion

#2 Boston Red Sox: $912 million

#3 Los Angeles Dodgers: $800 million

#4 Chicago Cubs: $773 million

#5 New York Mets: $747 million

#6 Philadelphia Phillies: $609 million

#7 San Francisco Giants: $563 million

#8 Texas Rangers: $561 million

#9 Los Angeles Angels of Anaheim: $554 million

#10 Chicago White Sox: $526 million


Yankee Global Enterprises is a three-engine money-making machine. The baseball team generated $325 million in revenue from regular-season tickets and luxury suites in 2010. Sponsorship revenue at the stadium is $85 million annually thanks to deals with PepsiCo, Bank of America, MasterCard, Delta Air Lines and others.

The YES Network, the team’s 34%-owned regional sports channel, is the most profitable RSN in the country and had over $400 million in revenue last year. The Yankees own a stake in Legends Hospitality Management, which manages stadiums, and generates $25 million in operating income. The enterprise value for the Yankees, YES and Legends is $5.1 billion.

Another big winner was the Texas Rangers (up 25%, to $561 million). Ray Davis and Bob Simpson bought the team, the lease to Rangers Ballpark in Arlington and some nearby real estate from Tom Hicks in a bankruptcy court auction for $593 million in July. Not only are the Rangers, which needed assistance from MLB to meet payroll last season, much better capitalized (the new owners infused the team with $225 million of equity), the team also has a new, richer cable deal. It signed a 20-year TV deal with Fox Sports Southwest that is expected to pay more than $1.5 billion over the life of the contract. The afterglow of the team’s first World Series appearance in October will also boost sponsorship and ticket revenues this year.

A year ago baseball teams were still fretting about the recession and what it might mean for attendance. Yet 73 million fans showed up at the ballpark last summer, which was the sixth highest total of all-time and down just 0.4% from 2009. Twenty teams drew at least 2 million fans, while nine teams topped the 3 million mark, led by the Yankees at 3.8 million. An overall improvement in the economy and better lending conditions boosted the average multiple of revenues that teams are valued at slightly to 2.5.

Overall, revenue for baseball’s 30 teams increased 4%, to $6.1 billion. Total operating income (earnings before interest, taxes, depreciation and amortization) fell 5%, to $494 million as rising stadium (rent and operating costs) and team (marketing and player development) expenses ate into profits.

The most profitable team was the San Diego Padres, which had an operating income of $37 million in 2010. The team’s attendance surged by 200,000 at Petco Park as the Padres finished just two games behind the San Francisco Giants in the National League West. The Padres managed to post a 90-72 record despite a payroll of just $38 million, which was the lowest in baseball. The Padres also benefited from a revenue-sharing check of more than $30 million.

Thanks to more than $400 million sent from high-revenue to low-revenue teams, several teams with low attendance were able to post operating profits of at least $10 million. Among them: the Pittsburgh Pirates ($25 million), Kansas City Royals ($10 million), Oakland Athletics ($23 million) and Marlins ($20 million).

Only three teams had a negative operating income in 2010: the Detroit Tigers (-$29 million), Mets (-$6 million) and Boston Red Sox (-$1 million), which collectively spent $475 million on players (including benefits and bonuses). Each ranked among the top six biggest spenders last year, but the Mets and Red Sox own stakes in regional sports networks, which offset any losses on the diamond.

Bad news in baseball? Two marquee franchises, the Los Angeles Dodgers and Mets, are suffocating from debt and legal issues. The Dodgers, owned by Frank McCourt and his estranged wife Jamie, have $433 million of debt, while the Mets, owned by Fred Wilpon and Saul Katz, owe creditors $450 million. Both teams are begging lenders for more money and are looking for investors.

The Dodgers and Mets problems could seep into the rest of the MLB. The Mets’ overall revenue fell 13% last year thanks to a 25% drop in gate receipts. The Dodgers’ total revenue was flat. Problems among big-market teams caused baseball’s revenue-sharing pool to shrink last season for the first time since the new sharing system was put in place in 2002. Low-revenue teams divvied up $404 million compared to $433 million in 2009, with the Yankees writing the biggest check of $119 million. The Mets’ revenue is expected to fall further in 2011, which could dent revenue-sharing even more.

Kurt Badenhausen and Christina Settimi of Forbes.com also contributed to this story.

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