It gets more interesting when looking at how these numbers break down. Forbes usually gets the figures pretty close since franchise sale prices tend to come very close to Forbes' appraisals, so it should be pretty easy to accept these values even with the limited information MLB and the teams make available. Take a look at how the A's and Giants compare:
- Franchise value: A's - $234 million (+26% change), Giants - $410 million (+8% change)
- Debt-to-value ratio (less than 40% preferred): A's - 38%, Giants - 37%
- Wins-to-player cost ratio (% relative to per average wins-per-dollar of salary): A's - 116, Giants - 76
- Market value: A's - $73 million, Giants - $155 million
- Brand management: A's - $21 million, Giants - $50 million
- Season ticket rolls: A's - 8,000, Giants - 28,000
On the other hand, the market value and brand management numbers are telling. In both cases, the Giants more than double the A's. The Giants have 350% more season ticket holders, though that could change drastically for the worse next season. This raises more than a few questions, such as:
- How much are the A's and Giants tapping into their relative markets, and the Bay Area as a whole?
- Are the A's low values due more to the stadium, ineffective marketing, or other factors?
- How much of a difference will a new ballpark for the A's really make in the grand scheme of things?
9 comments:
Well, so much for the A's having a quick start to pump up ticket sales. What I fear now is that these early losses will send them into their usual Spring tailspin and that fans and sportswriters will once again "write them off" before they inevitably come out of their slump.
It almost makes you wonder if we'd be better off with a young team that comes out of the gate firing at all cylinders, even if it means peaking too early and being out of the race in August.
Such a team would be a disappointment for sure, but might just contribute more to the revenue stream by enabling more advance ticket sales for the entire season.
Pennants are never won in April, but I think a lot of fans subliminially think so, at least those with disposable income.
Thanks Kenny,
For the reminder....I am going to go find a bridge now....or a really tall building will do.
Expect the Giants season ticket sales to take a plunge next year. As part of the deal with Phone-Co Park, season ticket holders were protected in their season tickets prices for 7 years. This is the last year of the protection. Next season, there is supposed to be a dramatic increase in their prices. If Balco Bonds retires after this season and the Giants still manage to not contend for a pennant, I think there will be some very interesting comparisons between the teams.
Again I say: Put yourself in Peter Magowan's shoes and you'll realize that there's no way that the Giants will just turn San Jose over to the A's without a huge fight, a hugh price, or both. Cry all you want about the territorial rights being unfair(I'm the first to agree, Tony) the fact remains that they DO exist, for better or worse.
We also know that the Giants(or A's, for the that matter) can never sue MLB per the league agreement. But what about all the investors that helped finance Pac Bell Park who were assured that no competitor would set foot in Santa Clara County? What's to stop them?
Market: Portion of franchise's value attributable to its city and market size.
Brand Management: Portion of franchise's value attributable to the management of its brand.
Doesn't tell you much, does it? Forbes doesn't say how they arrive at these numbers, but I imagine some combination of the market value number bizjournals creates and statistics like radio/TV ratings/deals factor in. Brand Management could be based in part on merchandise sales. The Yanks' figures are $530 mil - Market, $190 mil - Brand.
MLB's almost immediate statement dismissing the numbers leads me to believe Forbes is more on target than not. The last thing MLB wants is for the union to have ammo going into the next CBA negotiations. A financially thriving MLB is a bad starting point for them. You're not siding with MLB on this, BD, are you?
Wait a second ML....are you saying that because MLB's collective mouth is moving....they must be lying? Conspiring against the union you say? Less than honest behavior on the part of the owners? Ulterior motives?
All this and yet I'm the "conspiracy theorist"? lol
I know, I know....just good business practice!
Where are the A's in terms of wealthiest ownership group? I read the current group was the third wealthiest when they bought the team. Since then Lindner the 2nd wealthiest sold the Reds.
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