Yankees respond to Mark A comments... a feud brewing?

[SoCal Brew Crew Fan]

The Forbes numbers on operating income do not include their proportionate share of YES profits. Since they are technically a "minority owner", those profits are not consolidated. A 36% share of apx. $200mm in cash flow on top of their already profitable business would dwarf the next closest team. Despite paying out a large amount in revenue sharing, they are still in a league of their own. Granted, these are all estimates and neither Forbes or myself know the true numbers. There are varying degrees of attribution for debt, other assets and the like that could swing the numbers and not give a true estimate of the underlying earning power of the franchise.

 

One could argue the Marlins have higher profit margins. Their revs are much lower, but so are expenses so they may indeed pocket the rev share money. However the absolute dollar amounts are much lower.

[kramnoj]

One could argue the Marlins have higher profit margins. Their revs are much lower, but so are expenses so they may indeed pocket the rev share money. However the absolute dollar amounts are much lower.

 

What is the basis for this? Do you have a link demonstrating that?

[topper09er]

After all it isn't a business it's a sport. Congress says so.

Yup, there was a supreme court decision that baseball is a sport not a business, because there were questions in the early days that the AL and NL had a monoply on baseball players and the federal league, which started in 1914, could not compete equally with the AL and NL and wanted the government to apply the anittrust laws to force the AL and NL to give the federal league some of the top players of ther era. They claimed if it is like any other business it would be illegal for the AL and NL to have ALL of the best players because no other league could ever compete, but they lost the suite so baseball is not a business and it is legal for the Yankees to have a monopoly which makes it impossible for other teams to compete equally in a free market environment...i just wish the stupid yankee supporters would admit this.

[SoCal Brew Crew Fan]

http://www.forbes.com/2010/04/07/most-valuable-baseball-teams-business-sportsmoney-baseball-valuations-10_land.html

 

Let's start by using Forbes' assumptions, which IMO are very rough estimates at best. They estimate

 

Yankees - Revs = $441mm & EBITDA = $25mm, Margin = 5.7%

Marlins - Revs = $144mm & EBITDA = $44mm, Margin = 30.6%

 

They also mention YES has sent dividend checks to the Yankees of $100mm. That may be over a multi-year period, but it wouldn't take much to exceed the EBITDA that the Marlins generate. Those dividends are not included in the EBITDA that Forbes estimates for the Yankees since it isn't consolidated. If we include the proportionate share of YES EBITDA (estimated at 36% of $190mm) to the consolidated amount you are over $90mm in total proportionate EBITDA. There is a lot of room to play with those numbers and Forbes has nothing close to perfect information, but I still feel fairly confident in stating the Yankees are by far the most profitable franchise in terms of absolute dollars by a long shot. That is reflected in their valuation which is determined by a discounted value of those higher cash flows.