NEWSLETTER
The annual Business of Baseball is out at Forbes, offering up valuations for the 30 MLB franchises, and also an estimate on some of their finances.
You can read the full report here, including the Cubs’ placement as the 4th most valuable organization in Major League Baseball:
The Cubs are up from $3.8 billion last year to $4.1 billion this year. The New York Yankees, of course, remain in a tier all their own, with the next four teams – which includes the Cubs – a far cry removed:
Again, last year, Forbes had the Chicago Cubs worth $3.8 billion, so that’s a considerable jump, especially when you consider that it wasn’t a particularly remarkable year for the organization. Suffice to say, the Ricketts Family has done exceedingly well on their original investment, which was under $1 billion back in 2009.
At a time when many RSNs are in serious trouble, the ones that are still functioning well – which includes Marquee Sports Network – still throw off considerable fees to their teams:
I suspect those two points are not disconnected, by the way – with a functional RSN, partly owned by the team, an organization like the Cubs should hold relatively more value than other organizations. Many of the orgs that made the biggest leaps in valuation are the ones with good RSN and rights situations.
Lastly, of note to Cubs fans: the reported revenue for the organization in 2022 was $451 million. Your baseline expectation is that an organization will spend at least 50% of its revenue on player payroll – that’s a very rough line, and it also assumes the revenue estimate is accurate – and that’s almost exactly where the Cubs project for 2023. We always want them to go ABOVE the base case, but at least they’re not below it. It does suggest, though, that major increases in payroll are probably going to have to be preceded by major increases in revenue (chicken-egg situation).
