Forbes values Detroit Tigers at $1.25 billion

Forbes.com has released their annual franchise valuation report for Major League Baseball franchises, and the report values the Detroit Tigers at $1.25 billion, which is unchanged from a year ago. The average baseball franchise value increased by four percent from a year ago, and is now up to $1.85 billion. The New York Yankees top the list with a value of $5 billion. Franchise values overall have increased almost 400 percent over the past decade.

The Tigers now rank 23rd of 30 major league clubs in value, which is down two slots from their 21st place ranking in 2018. The club’s operating income more than doubled, up to $30 million, an increase of $11 million, or 58 percent over a year ago. Detroit pulled in $276 million in revenue, which is identical to revenues reported by Forbes for the franchise one year ago.

The increase in operating income is primarily due to reducing expenses. Revenue is just $1 million shy of the all time franchise high of $277 million, set in 2017. Detroit’s player expenses declined again, to $136 million, down from $148 million in 2018. The club spent $217 million on player costs in 2017.

Gate receipts declined by $13 million, from $49 million in 2018 to $36 million last year. The club has seen a 51 percent decline in attendance to 1.5 million fans in 2019 from a high of 3.1 million in 2013.

The Tigers are able to continue turning profits despite having the major leagues’ worst record because of lucrative television deals at the local and national levels. Major league baseball recently signed a new TV deal with Fox sports which will pay each club 50 percent more per season starting with the 2022 season.

Major league baseball pulls in annual revenues of $ 10.5 billion per year, according to Forbes. This breaks down as follows:

• $ 3.2 billion comes from gate receipts (30 percent),
• $ 3.1 billion from national television contracts (29.5 percent)
• $ 2.2 billion from local television deals (21 percent)
• $ 1.1 billion from sponsorships (10.5 percent)
• $92.5 million from other stadium revenues (8.8 percent)

The Tigers receive $50 million per year from Fox Sports Detroit, now owned by Sinclair media group, on a deal which expires after the 2021 season. They are certain to see a big increase in a new local TV deal after that, and possibly take an ownership stake in the station if they don’t start their own regional sports network.

Five major league clubs are worth over $3 billion, and every club is worth at least $1 billion with the exception of the Miami Marlins, who are valued by Forbes at $980 million. The Marlins and the Pittsburgh Pirates are the only two clubs to see a slight decline in the franchise value over the past year.