Friday, April 09, 2004

Interesting article here on franchise value and revenue. The M's are now worth an estimated $396 million dollars as a franchise (5th) and bring in $169 million a year in revenue (3rd). Not a bad ROI for the initial investors is it?

What I find particularly interesting is the Yankee revenue ($238 million / year) compared to their $183 million dollar payroll. George really has it figured out. Continue to invest in the product and your franchise value will continue to increase ( $832 million ). You don't try and run a baseball team as a positive cash flow. M's ownership has chosen to pull cash out of the team to repay their "losses" during the Kingdome years. The minority partners in the M's purchase put up $20 million of the initial $120 million purchase cost, roughly 17% of the initial cost. That 17% is now worth over $67 million, an increase of 336% in 12 years giving a yearly ROI of 12%. Not too bad given the stock market performance over the same time frame.

Of course it really helps if you run the franchise intelligently as the M's did from 1994 - 2002 as opposed to how they appear to be running it now.

After the opening series I'd rather talk finances then on field performance. Every weakness noted in the off season of blogging was exposed in the opening series. The good thing is that baseball is a marathon instead of a sprint and the M's have the resources to correct their weaknesses in transit. The bad news is that we have is Captain Sawyer of the HMS Renown at the helm.


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