You’ve got to lose money to make money, at least if you own an MLB team.
On Monday, Forbes released its annual list of MLB’s most valuable franchises, and it revealed something amazing: even though MLB spilled record red ink last year, team valuations increased to all-time highs.
That includes the Red Sox, who saw their value rise to more than $3.4 billion, despite posting an operating loss of $70 million in 2020, and suffering through their worst season since 1965. Forbes ranks them as the third-most valuable franchise in MLB, behind the Yankees ($5.2 billion) and Dodgers ($3.5 billion).
Overall, MLB lost around $3.1 billion last season. Owners caterwauled about the prospect of losing $4 billion prior to the campaign.
But thanks to massive media rights deals worth $1.55 billion annually and surging stock market, team valuations weren’t negatively impacted. Out of 30 teams, 29 saw their values increase last season.
For example, the Mets sold last year for $2.42 billion, even though they suffered an operating loss of $125 million.
In addition to a favorable financial landscape for billionaires, the Red Sox can point to the infusion of $750 million its parent company, Fenway Sports Group, recently received from a private investment firm. LeBron James and Maverick Carter have also purchased small shares in FSG, in case you haven't heard.
With a new media rights deal set for next year, the landscape for MLB owners only looks more favorable. So keep that in mind next time owners of any big market club talk about the need to cut payroll or obey the luxury tax.
There’s plenty of money flying around, including in the owners’ suites at Fenway.
