Forbes Baseball Team Values

[DHonks]

What I'm saying is that the Brewers are worth more than 4 times as much as the current ownership group spent for the team, and that they could use some of that increase in franchise value on player contracts, even to the point of operating at a loss.

 

From all indications last season, the Brewers in 2018 either had a very small profit or possibly a loss. Throw in the $60+ million for Maryvale. We're the only team spending on our spring training facility.

[Fear The Chorizo]

He has made a very nice return on his investment.

 

 

Jim, I believe you are one of the smartest posters on this site and I usually agree with most of what you post. I also understand that you have said many times that you don't necessarily think they should do what you have illustrated, but that they could. So, maybe we really are not that far apart on this subject.

 

However, just to be clear. Attanasio has not realized or made any return yet on his investment. It's all on paper. Sports teams values seem to always go up and not down. So it does appear that his investment is safe and he will eventually get a nice return. However, nothing in life is guaranteed. There is no guarantee that the Brewers will be worth $1 Billion 5, 10, 20 years from now or whenever he decides to cash out. I have zero expectation for him to leverage his investment gain to date in order to aquire high contract players. Not to mention, acquiring such players does not always pay off.

 

Not to mention the fact Mark A. has repeatedly stated his desire for team ownership to stay in their family, meaning if he wants the Attanasio name to remain the majority owner that he never will cash in that investment by selling the team. Make no mistake, increasing payroll to the point of operating at a fiscal loss isn't as simple as Mark A. just taking out his checkbook. I think this year's payroll is largely due to their comparitively low team payrolls in 2015 and 2016, which allowed them to bank extra profits for use now. Entirely due to past years' operating profitability, not taking on debt based off the franchise valuation as collateral.

[JosephC]

I'm just wondering if there is anybody on this board that bought a 200k house in 1999. Now that house is worth 350k. So because that house is now worth 150k more than it was than it was when they first bought it, they have decided to go out and buy themselves a brand new 2019 Aston Martin Vantage?

[Fear The Chorizo]

I don't know what a minority owner would expect for a return on their investment. Some investments are dividend producers, others are sold based on growth potential. In either case, I'd expect that Mark A would have made his plans known to them so they're in alignment on what the investment produces for those owners.

 

Even if it has not paid a dividend, an original investor in the Attanasio group would have seen his investment multiply by 4 or 5 times in 14 years. Not too bad at all.

 

Typically minority ownership's most tangible value is getting a millionaire's foot in the door of the exclusive majority owners club. I believe minority stakes are bought and sold much more frequently based on team valuations, which if done wisely can lead to rapid gains in wealth and position them to one day become a majority owner. I think that's how quite a few majority owners got involved in professional sports franchises.

 

For them, Forbes' valuation lists have much closer to tangible value...it's almost like taking a trial run at owning a team, getting into that biz's network, and getting plenty of perks (lixury suites, player interactions, etc)

[JimH5]

I'm just wondering if there is anybody on this board that bought a 200k house in 1999. Now that house is worth 350k. So because that house is now worth 150k more than it was than it was when they first bought it, they have decided to go out and buy themselves a brand new 2019 Aston Martin Vantage?

 

No, but they could.

 

I think we're using Midwest values to determine what is prudent and what is excessive. Just because we wouldn't buy such an expensive, flashy car doesn't mean we couldn't. And it doesn't mean he shouldn't. And you're talking about a 75 percent increase over 20 years, while the Brewers have had a 400 percent increase over 14 years.

 

Baseball teams go through cycles where they are competitive and then they're not. The Brewers are at the peak of that cycle. So if they find themselves lacking at a position and have a trade partner with an expensive player coming back, that contract shouldn't be a factor.

[Brew crew 92]

What I'm saying is that the Brewers are worth more than 4 times as much as the current ownership group spent for the team, and that they could use some of that increase in franchise value on player contracts, even to the point of operating at a loss.

 

From all indications last season, the Brewers in 2018 either had a very small profit or possibly a loss. Throw in the $60+ million for Maryvale. We're the only team spending on our spring training facility.

 

The brewers operating income was 8th in all of baseball at 66 mil, no loss or small profit there.

[Fear The Chorizo]

What I'm saying is that the Brewers are worth more than 4 times as much as the current ownership group spent for the team, and that they could use some of that increase in franchise value on player contracts, even to the point of operating at a loss.

 

From all indications last season, the Brewers in 2018 either had a very small profit or possibly a loss. Throw in the $60+ million for Maryvale. We're the only team spending on our spring training facility.

 

The brewers operating income was 8th in all of baseball at 66 mil, no loss or small profit there.

After factoring in payment of many bottom line expenses that aren't included in the operating income amount, that $66M wouldn't look nearly as healthy

[MrTPlush]

I'm just wondering if there is anybody on this board that bought a 200k house in 1999. Now that house is worth 350k. So because that house is now worth 150k more than it was than it was when they first bought it, they have decided to go out and buy themselves a brand new 2019 Aston Martin Vantage?

 

The problem with the logic of “the team is worth so much more now” is the fact one wants him to spend the money he has made off of the team...but he has made NOTHING. The only way to make that $700mil is to sell the team. At which point he has no team to spend money on. Which all signs point to him never doing so, so the $700mil is pretty darn irrelevant.

 

I don’t recall “all-in” meaning, “flush money down the drain because perceived value is up that I will never actually realize into actual cash”. I believe he claimed in 2012 they lost a slight amount of money (whatever that means/entails) and I am sure he will do it this year in the right situation. To expect “all in” to mean lose million upon millions seems unrealistic. If he says we don’t have any money, well, probably don’t.

[Brew crew 92]

I'm just wondering if there is anybody on this board that bought a 200k house in 1999. Now that house is worth 350k. So because that house is now worth 150k more than it was than it was when they first bought it, they have decided to go out and buy themselves a brand new 2019 Aston Martin Vantage?

 

The problem with the logic of “the team is worth so much more now” is the fact one wants him to spend the money he has made off of the team...but he has made NOTHING. The only way to make that $700mil is to sell the team. At which point he has no team to spend money on. Which all signs point to him never doing so, so the $700mil is pretty darn irrelevant.

 

I don’t recall “all-in” meaning, “flush money down the drain because perceived value is up that I will never actually realize into actual cash”. I believe he claimed in 2012 they lost a slight amount of money (whatever that means/entails) and I am sure he will do it this year in the right situation. To expect “all in” to mean lose million upon millions seems unrealistic. If he says we don’t have any money, well, probably don’t.

 

It’s not 700 mil it’s 952 mil, but what’s another quarter billion dollars.

 

I don’t know about 2012, but last 6 years been massive profits. 15 and 16 if I remember correctly 120+ million.

 

I don’t get the EXTREME Mark Attanasio apologists. 130 mil payroll is nothing for an elite title contender that’s NEVER won a title in 49 years,

If not now, when?

 

I think most on this board have been brewer fans less than 35 years, for those of you in that category, imagine another 14 years of no series. See if your patience in 2033 might be wearing a little thin.

[PeaveyFury]

I'm just wondering if there is anybody on this board that bought a 200k house in 1999. Now that house is worth 350k. So because that house is now worth 150k more than it was than it was when they first bought it, they have decided to go out and buy themselves a brand new 2019 Aston Martin Vantage?

 

No, but they could.

 

And I believe that mentality is behind what caused the Great Recession.

[PeaveyFury]

 

I don’t know about 2012, but last 6 years been massive profits. 15 and 16 if I remember correctly 120+ million.

 

For the last time, unless you have a link, this is pure speculation. FORBES VALUES DO NOT INDICATE PROFITS, and as many others have pointed out, OPERATING INCOME DOES NOT EQUAL PROFITS. You DO NOT know what the Brewers cleared, unless you are privy to info that isn't public to my knowledge.

[DuWayne Steurer]

Value is not the same as operating capital. It's not even close. As others have said, value is just an imaginary number that you can throw out there, if you decided to sell.

 

If you have a thing, it's only worth what someone wants to give you for it, if you're even in the market to sell it, which Attanasio is not. It doesn't matter what someone says it's worth. That value doesn't give you operating dollars.

[Brew crew 92]

 

I don’t know about 2012, but last 6 years been massive profits. 15 and 16 if I remember correctly 120+ million.

 

For the last time, unless you have a link, this is pure speculation. FORBES VALUES DO NOT INDICATE PROFITS, and as many others have pointed out, OPERATING INCOME DOES NOT EQUAL PROFITS. You DO NOT know what the Brewers cleared, unless you are privy to info that isn't public to my knowledge.

 

I don’t know about 2012, but last 6 years I’m guesstimating nice profits.

15 and 16 more than nice.

[Brew crew 92]

According to this article the Brewers were 8th in MLB with a 66M operating income last season.

 

Someone smarter than me please explain the differences between operating income and profit.

 

Even assuming "operating income = profit", doesn't really tell anyone much about that assumed 66 million.

 

Each team received a one time payment of 50 million dollars from the sale of MLBAM in 2018 & the Brewers also made a postseason run which will increase profits.

 

The 50 million is definitely not getting paid out again this year & making the postseason is yet to be determined.

 

Short of winning the WS, I would imagine the Brewers profits decrease this year compared to last year.

 

Article said bam not included.

[DHonks]

What I'm saying is that the Brewers are worth more than 4 times as much as the current ownership group spent for the team, and that they could use some of that increase in franchise value on player contracts, even to the point of operating at a loss.

 

From all indications last season, the Brewers in 2018 either had a very small profit or possibly a loss. Throw in the $60+ million for Maryvale. We're the only team spending on our spring training facility.

 

The brewers operating income was 8th in all of baseball at 66 mil, no loss or small profit there.

 

 

A quick google search says Operating Income is before interest and taxes, among other things. Throw in that this is ALL speculation, as the Brewers have not opened their books. The Brewers likely financed the Maryvale renovation, but a portion probably hit the books last year. So MAYBE a small profit if the Forbes numbers are accurate

[PeaveyFury]

 

I don’t know about 2012, but last 6 years been massive profits. 15 and 16 if I remember correctly 120+ million.

 

For the last time, unless you have a link, this is pure speculation. FORBES VALUES DO NOT INDICATE PROFITS, and as many others have pointed out, OPERATING INCOME DOES NOT EQUAL PROFITS. You DO NOT know what the Brewers cleared, unless you are privy to info that isn't public to my knowledge.

 

I don’t know about 2012, but last 6 years I’m guesstimating nice profits.

15 and 16 more than nice.

 

So “if you remember correctly,” you guesstimate 120+ million profits?

[JimH5]

Value is not the same as operating capital. It's not even close. As others have said, value is just an imaginary number that you can throw out there, if you decided to sell.

 

If you have a thing, it's only worth what someone wants to give you for it, if you're even in the market to sell it, which Attanasio is not. It doesn't matter what someone says it's worth. That value doesn't give you operating dollars.

 

I'm sure if you had something of extreme value, you could borrow off of that value without having to sell. Isn't that what collateral is? Lenders would offer financing on that value, and they wouldn't use an imaginary number. They would conduct an audit and lend based on real worth.

[PeaveyFury]

 

I'm sure if you had something of extreme value, you could borrow off of that value without having to sell. Isn't that what collateral is? Lenders would offer financing on that value, and they wouldn't use an imaginary number. They would conduct an audit and lend based on real worth.

 

Jim, do you have factual knowledge that this theory applies in this case, or are you assuming that because it works for stuff like home equity that you can also do it with a baseball team?

[JimH5]

I don't have factual knowledge. But I'm not just talking about home equity, either.

 

When an Art Museum purchases a piece of art, I doubt it is always a cash deal. I believe there is financing based on the sale of other pieces in their collection.

 

When a business finances the construction of a new building, it is based on their ability to pay it back, either from future earnings, or the value of the business itself. Isn't it?

 

What else is financing other than money borrowed with the obligation to pay it back at terms that are acceptable to both sides?

[Patrick425]

A large part of my frustration with this topic is that people believe small market teams should take on debt and risk that large market teams don't have to in order to compete. They seem to believe that should be the solution to competing with large market teams. If that is the only recourse that small market teams have then baseball's economic balance system is clearly broken. That is a band-aid solution that allows large market teams to coast year after year. How about discussing the absurdity of guaranteed contracts (I'm looking at you Chris Davis and the Orioles)?

[PeaveyFury]

I don't have factual knowledge. But I'm not just talking about home equity, either.

 

When an Art Museum purchases a piece of art, I doubt it is always a cash deal. I believe there is financing based on the sale of other pieces in their collection.

 

When a business finances the construction of a new building, it is based on their ability to pay it back, either from future earnings, or the value of the business itself. Isn't it?

 

What else is financing other than money borrowed with the obligation to pay it back at terms that are acceptable to both sides?

 

You’re applying theory of fairly liquid assets to ownership in an entity that a select few can purchase. A house has a readily available market. So does that artwork, or even that building. How many people can truly afford to buy a 46 billion dollar franchise like the Yankees? Bill Gates and Warren Buffett?

 

You may well be right, but I think it’s dangerous to universally apply a theory like this without actually knowing it’s true. Far too much talking in absolutes in this thread without actually knowing real numbers and mechanisms for my liking.

[Brew crew 92]

Brewers operating income from statista:

 

2018-66 mil

17-67mil

16-58.2

15-27

14-17.3

13-6.8

12-9

11-19.2

10-12.4

09-10.2

08-11.8

07-19.2

06-20.8

05-22

04-24.2

03-5.1

02-6.1

01- -6.1

[PeaveyFury]

Great, thanks for sharing. But as it has been made clear previously, operating income alone tells you very little.

[young guns]

One thing to remember is Mark isn't a sole owner or even majority owner. He's just the controlling(?) Owner. I don't remember his percent, but I thought it was a low as in the 20s or as high as the 40s. Now let's pretend that 66 million is their pure profit from last year, how does that get divided? Does the team get a chunk for a "rainy day" fund with the rest split based on ownership percentages? Do they just split all of it? Does the "team" keep it with the owners getting a payout some other way? I don't know but it seems like the assumption is the owners split it.

 

We know Mark is all in on being a fan of the team and wanting a winner, but what about the minority owners? Are they in it just for the money and and only care about winning so far as it increases profits, or do they want the fan side of winning too? If Mark is the only one that wants to go for it, then maybe he can use 15-30 million of that theoretical 66 to pump up the payroll.

[JimH5]

I don't have factual knowledge. But I'm not just talking about home equity, either.

 

When an Art Museum purchases a piece of art, I doubt it is always a cash deal. I believe there is financing based on the sale of other pieces in their collection.

 

When a business finances the construction of a new building, it is based on their ability to pay it back, either from future earnings, or the value of the business itself. Isn't it?

 

What else is financing other than money borrowed with the obligation to pay it back at terms that are acceptable to both sides?

 

You’re applying theory of fairly liquid assets to ownership in an entity that a select few can purchase. A house has a readily available market. So does that artwork, or even that building. How many people can truly afford to buy a 46 billion dollar franchise like the Yankees? Bill Gates and Warren Buffett?

 

You may well be right, but I think it’s dangerous to universally apply a theory like this without actually knowing it’s true. Far too much talking in absolutes in this thread without actually knowing real numbers and mechanisms for my liking.

 

 

I don't want to be a blowhard know-it-all, but I would think collateral is collateral. And I can't believe that he couldn't find a lender willing to lend money for other projects. Why would money earmarked for new concession stands and videoboards be any different than money earmarked for a staff ace?