The Detroit Tigers rank 14th among the 30 major league clubs, with an estimated franchise value of $1.15 billion, according to a report by Forbes magazine released today. That is up from the March, 2015 estimate of $1.125 billion, when the Tigers ranked 13th among major league clubs.
The Tigers had an estimated operating loss of $20.7 million in 2014, according to Forbes, but turned that into operating income of $11 million in 2015. The biggest factor is almost surely the increase in national media revenues, which are shared among all 30 clubs. The Tigers had a decline of 25 percent in their local television ratings, but still ranked fourth among major league teams, with an 8.58 rating for games broadcast on Fox Sports Detroit.
The New York Yankees have the highest value, at an estimated $3.4 billion, followed by the Los Angeles Dodgers at $2.5 billion. The Kansas City Royals increased their value by 24 percent, to $865 million, which ranked 25th in the game, according to Forbes.
The average major league franchise is worth an estimated $1.3 billion, up 7 percent from last year and 59 percent from 2014. Major League Baseball revenue for all teams was $8.4 billion, 7 percent higher than the previous year. Operating income (earnings before interest, taxes, depreciation and amortization) for 2015 was $675 million, also up 7 percent from 2014.
Broadcast revenues have long surpassed gate receipts as the primary source of revenue for baseball franchises. The Tigers had $84 million in gate receipts, about one-third of their total revenue of $254 million in 2014. National revenues for regular season games on Fox and ESPN, and postseason revenues are all divided between the clubs. Local revenues are where the great disparity exists between larger and smaller market clubs, with a little more than a quarter of those revenues being shared.
Several clubs are riding the wave of the game's popularity, and expansion of MLB into "out of market" revenue streams such as MLB.tv, and the Extra Innings package available on satellite and cable outlets. All clubs also benefit from the burgeoning MLB Advanced Media, the technological arm of baseball's streaming services.
The Tigers return to the field in 2016 with a payroll near the $200 million mark, which is third highest among major league teams. They saved $12.1 million in salaries in 2015 by trading players at the July trade deadline, but also saw a decline in gate receipts and television ratings late in the season as the team fell out of playoff contention. About $65 million came off the books in expiring contracts at the end of the 2015 season, but they added over $75 million in new contracts for the 2016 season.
Revenues across the sport of baseball continue to rise at a steady rate, with no sign of a slow down on the horizon. Players' salaries are also increasing, but not at the same pace, and profits across the game are also increasing. It will be important for the Tigers, from a financial standpoint, to return to winning and contending, in order to post the ratings needed to cash in when their local broadcast contracts come up for renewal.