Determining Price Tag for the New York Yankees After $2 Billion Dodgers Sale

Jeffrey Schmidt@JeffSchmidt9Correspondent IIIMarch 30, 2012

NEW YORK, NY - OCTOBER 06:  Derek Jeter #2 of the New York Yankees walks back to the dugout at the end of the top of the fourth inning against the Detroit Tigers during Game Five of the American League Championship Series at Yankee Stadium on October 6, 2011 in the Bronx borough of New York City.  (Photo by Nick Laham/Getty Images)
Nick Laham/Getty Images

Philadelphia-based analyst Tony Wible, who covers media companies for Janney Montgomery Scott LLC, valued the New York Yankees a Major League Baseball-high $2.85 billion after a group led by Magic Johnson bought the Los Angeles Dodgers in a $2.3 billion transaction. 

The Dodgers sold for $900 million more than any other North American sports team. The sum of the sale actually upended the previous two largest combined U.S. sports teams sales which were the Miami Dolphins ($1.1 billion) and the Chicago Cubs ($845 million).

Forbes valued the Yankees at $1.85 billion on $439 million in revenue, while the Dodgers came in No. 2 at $1.4 billion on slightly more than half that revenue total.

Wible said that his appraisal was based on the number of television households in the team’s designated market area, which is roughly 5.57 million households in the Dodgers case. The Dodgers sale translates into $386 per television household, which is $71 more than the league average.

“We believe the television rights are the main driver behind the valuation of sports teams,” Wible said in a note to clients that focused on Liberty Media Corp., owner of the Atlanta Braves. “Therefore, we can compare transaction multiples based on DMA size.”

When he used the same $386 number that the Dodgers registered and then multiplied it by the New York area’s 7.39 million TV households, the Yankees netted a $2.85 billion value. 

However, that number should be much greater, considering that Wible did not factor in the Yankees' brand new $1.5 billion stadium or their television network, YES. 

The Yankees took home a $90 million rights fee in 2011 from the YES Network and that number did not include the teams 34 percent shareholder stake from an operating income that exceeded $224 million. 

The team also collected $292 million at the gate, which is more than three times what the Dodgers made in 2011.  

The Yankees' 27 World Championships, the fact that they have made the playoffs in 15 out of the past 16 years and that they have won five World Series in that span also have to be factored in, especially when those numbers are compared to the Dodgers' six World Championships, five out of 16 playoff appearances and zero World Series titles during the same time period. 

The Dodgers as a whole have come up short as of late. The team has not been to the World Series since 1988 which also happens to be the last time they won, and the team was bought by one of the worst owners in sports back in 2004 for a mere $355 million, which really makes the sale for over $2 billion that much stranger. 

This sale only helps the Yankees and it certainly increases their value when you compare resumes.

But what would the Yankees go for if they were available on the market: $3.0 billion, $4.0 billion, $5.0 billion?

It certainly seems like the team could fall in between that $3 to $4 billion range, but then again, it is obvious that the Yankees are not going to be sold anytime soon.


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