There were six factors considered for each franchise, with a weighted value assigned to each factor:
1. Percent of years in which team made the playoffs (Weight: 30 percent).
2. Percent of years in which team won the World Series (Weight: 25 percent).
3. Two hundred times the number of Hall of Fame players in franchise history divided by number of years franchise has existed (Weight: 15 percent).
4. One-eighth of revenue earned in 2012 in millions (Weight: 15 percent).
5. Fifteen plus operating income in 2012 in millions (Weight: 10 percent).
6. Thirty-five minus the average value of the farm system as ranked by ESPN's Keith Law in February (Insider subscription required) and Bleacher Report's Mike Rosenbaum in August (Weight: five percent).
Great. So what the heck does that mean?
Seventy percent of each franchise's grade is based on its history. For 16 teams, that history dates back to well before World War I, but 14 of the teams have no history prior to 1961. As such, we had to divide by the number of years that the franchise has existed in order to make it a fairer playing field.
In my opinion, making the playoffs is a sign of a successful season—especially from 1903-1968, when the only playoff series was the World Series—so it deserves the heaviest weight. Winning the World Series every now and then is also rather crucial to being considered a successful franchise, so it gets the second-largest multiplier.
Having Hall of Famers in the past isn't necessarily a prerequisite for success, but if teams feel the need to honor their Hall of Famers at their stadiums, then I figure they have to be worth something here as well. If you have a grievance with the number of Hall of Famers counted for your franchise, feel free to take it up with the official HOF website linked in criterion No. 3 above.
The next 25 percent measures where the team is at right now. It's one thing to have a gold-plated history, but if the franchise didn't make much money in 2012, it's hard to argue for its success. I wanted to include both revenue and operating income so as to not penalize the small-market teams that are actually turning a considerable profit.
The final five percent on the farm system is so we can say that the future state of the franchise was taken into consideration without giving too much emphasis to the players who may amount to nothing.
Just for the record, the multiplying factors in the criteria (one-eighth of revenue, 15 plus operating income, etc.) were put in place so that the numbers were all between zero and 60 before applying the weight factors. I promise none of them were arbitrarily applied in order to help any franchises.