The annual Forbes Business of Baseball info-drop is out, complete with estimates on team values, revenues, and operating income (which, you should note, is EBITDA, not profit). The Cubs come in at a $1.8 billion valuation, close to the actual value that the market recently put on the team when small stakes were sold to help fund the Wrigley Field renovation and development plan.
The valuation is a 50% increase from last year, which is, of course, a ton, but is actually less than 12 other MLB teams – with the huge influx of TV cash and huge increase in sports team valuations, generally, every team in the league saw a significant bump in value.
As for the revenue/expenses/operating income picture, I leave it to you to explore. My research last year into the Cubs’ financial picture confirmed for me that the Forbes figures are not perfect, though they are frequently in the ballpark. Unfortunately, there are enough moving parts to render the final figures little more than “interesting.”
Speaking of that, Forbes has the Cubs’ 2014 revenue as just over $300 million after pegging the figure at $266 million in 2013. While I won’t vouch for veracity of either of those figures precisely, I will say that it squares with what we believe to be true about the Cubs’ revenues in the last two years – namely, that they saw a healthy bump in 2014. That’s significant because it would help make the current payroll level – about $119 million – sustainable even after the Tanaka Rollover Funds are spent (this year), and may even help the Cubs to increase payroll further in 2016. The Ricketts Family has said over and over that the Cubs are a “closed system” – every dollar that comes in the door is used for the Cubs. After expenses are paid, the rest goes to baseball operations. Thus, hopefully revenues increase even further in 2015.
In any case, check out the Forbes information. It’s interesting if for no other reason to see how the various teams stack up against each other in Forbes’ calculations.