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Forbes: Tigers value up 35%, but still losing money

The annual Forbes report on the values of MLB's 30 franchises is out. The Tigers are the 13th most valuable franchise, but still show a slight net loss in revenue.

Tigers' owner Mike Ilitch bought the tea m for $ 85 million in 1993
Tigers' owner Mike Ilitch bought the tea m for $ 85 million in 1993
Leon Halip

Forbes magazine publishes a well respected report every year at this time, putting values on major league baseball's 30 franchises. The Detroit Tigers come in 13th on the list, valued at $ 643 million, which is up 35% over the previous year's value. Detroit was 21st on the list in 2011.

According to the report, the Tigers took in $ 238 million in revenue, which put them in a virtual tie for seventh on the list. Despite the increase in the value of the franchise, the Tigers were one of six clubs to show a net operating loss, estimated at $ 400,000. On paper.

The New York Yankees lead the pack, valued at $ 2.3 billion, with the Los Angeles Dodgers second at $ 1.6 billion, although they were just sold for $ 2 billion. The Tampa Bay Rays, worth $ 451 million, and the Kansas City Royals, valued at $ 457 million, were the least valuable franchises.

Forbes paints a bright picture of the state of baseball:

Upshot: The average baseball team is now worth $744 million, 23% more than a year ago and the largest increase since we began tracking MLB finances in 1998. During the 2012 season, revenue rose 7%, to an average of $227 million per team. Operating income per team fell 9%, to $13.1 million, mainly due to higher player costs and stadium expenses.

Operating revenues include ticket sales, to local television rights, to concessions. Franchise values also include an estimated value for each club's share in central revenue. That is, the revenue that all clubs receive from national television contracts that MLB has with Fox, TBS, and ESPN. Forbes reports that clubs received $ 50 million apiece from the central fund in 2012.

Baseball is big business, and it's tentacles have reached well beyond the butts in seats and beer sales that once comprised the bulk of revenue for fans. On the one hand, clubs are less dependent on fans attending games to bring revenue. On the other hand, broader revenue bases provided by alternative revenue streams helps to level an essentially uneven playing field. The Yankees led all clubs with $ 471 million in operating revenue, some 40% higher than the next highest club, the Red Sox, and almost double the operating revenue of a club like the Tigers, who are among the top ten revenue clubs.

While NFL clubs mainly receive television revenues from contracts that the league has with major networks, and all other sports have a more even mix of local and national broadcast revenues, MLB clubs cut their own deals with local television stations, and cable networks, often owning an interest in those cable networks.This gives large market teams a big money advantage.

One great equalizer for MLB is that some revenues go through MLB or MLB Advanced Media (MLBAM) and is divided among the clubs according to various formulas that aren't dependent on market size. MLBAM includes revenues from things such as the patents on streaming technologies used to broadcast games over the internet on and the mobile app for At Bat 12. Forbes values MLBAM at a cool $ 6 billion. MLB has even made a billion dollars on money invested in hedge funds that was received from the sale of the Washington Nationals.

MLB receives revenue from such operations as DirecTV and subscriptions, which are "out of market" revenues for the local clubs playing in the games. Those go into the central kitty. In addition, clubs put 34% of local revenues into a pool and then divide the money up equally. All of this is separate and apart from the "luxury tax" that is paid for clubs who have player payrolls above a certain amount.

Forbes lists nine baseball owners who are billionaires. The Tigers' Mike Ilitch is fourth on the list, worth $ 2.7 billion. The Tigers continue to have one of the highest payrolls in the major leagues, at around $ 148 million for the 2013 season.