Baseball’s rising franchise values could be at risk with this year’s shortened season and empty stadiums. Every team across the league has seen its value increase roughly four-fold over the last decade, but franchise values could drop up to 20% for teams that sell in the next year, according to Bloomberg.
In a normal season, 40% to 70% of an MLB club’s revenues come from stadium activities. Without fans coming to the stadiums, teams won’t see revenue from tickets, concessions, parking, or added merchandise sales. S&P Global Inc. recently projected the New York Mets game-day revenue will drop 85% year-over-year.
The Mets’ sales process presents a real-time case study. Billionaire financier Steve Cohen offered $2.6 billion for the team earlier this year before the deal fell through. Now the bids, including another from Cohen, are reportedly in the $2 billion or less range.
Beyond the financial issues from the pandemic, MLB team values could also see future declines due to the sport’s aging fan base and a potential labor stoppage – which reared its head during the turbulent negotiations to get this season off the ground.