Updated as of the release of Forbes 2021 revenue estimates on March 24, 2022.

Provided below is a graphical illustration of total player compensation (in terms of year over year growth and percentage of industry net revenue) segmented by CBA iteration and presiding MLBPA executive director.

Also presented are two interactive charts displaying how much each Major League Baseball team has spent on players relative to their annual revenue, as estimated by Forbes. To display or hide an individual team in the chart at the top, click on the circle icon next to each name. To display or hide a specific period in the chart at the bottom, click on the circle icon next to each year.

MLB Player Compensation vs. League Revenue

Notes: Data Labels represent “year over year comp growth / total comp as percentge of net revenue”. Revenue is net of stadium debt service. Total compensation is actual payroll + player benefit costs + players’ share of the postseason revenue pool. For pre-2015, benefit costs were determined by working backward from the known 2015 amount and assuming a 4% growth rate (CBA calls for increases up to 10%). For 2021, year over year revenue comparison is to 2019.
Source: captainsblog.info, MLB releases published by AP (actual payroll, post season revenue), baseball-almanac (older postseason revenue) and Forbes (net revenue)

Player Cost (Payroll/Luxury Tax) as a Percentage of Team Revenue, 2001, 2003-2021

Note: Revenue is net of revenue sharing and stadium debt service. Payroll costs excludes benefits, but include luxury tax payments, and is based on final figures for each year released by MLB, and may not necessarily equal the amount upon which the luxury tax is based.
Source: MLB releases published by AP (final payroll), MLB releases published by AP (luxury tax) and Forbes (revenue)

Regular Season Awards
NL Cy Young: Zack Wheeler – Phillies
NL MVP: Trea Turner – Dodgers
NL ROY: Seiya Suzuki – Cubs

AL Cy Young: Gerrit Cole – Yankees
AL MVP: Aaron Judge – Yankees
AL ROY: Julio Rodríguez – Mariners

The Covid-19 pandemic was a brushback pitch that sent MLB’s financial health sprawling, but in 2021, the sport dusted itself off and now stands poised to resume its prior growth.

Forbes’ Estimate of Annual MLB Revenue, 2003 to 2021

Note: See below for relevant footnotes pertaining to financial metrics.
Source: Forbes.com

According to Forbes’ latest “Business of Baseball” report, revenue (net of stadium debt service) not only increased 160% off last year’s Covid-impacted total, but climbed within 8% of the record $10.4 billion reported in 2019. Almost every penny of the decline was attributable to an approximately $900 million deficit in gate receipts, which bodes well for the future as last season’s attendance restrictions have all been lifted.

Forbes’ Estimate of MLB Gate Receipts, 2021 vs. 2019

Source: Forbes.com

Compared to 2019, Forbes estimates that gate receipts were still down a significant 31% in 2021, with all but three teams remaining below pre-Covid levels. Only the Rangers, which opened a new ballpark and faced no attendance limitations, the World Champion Braves and resurgent White Sox managed to record an increase in gate. At the other end of the spectrum, 11 teams, ranging from the small market Pirates to large market Yankees, remained 40% or more off their pre-Covid levels.

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Major League Baseball had enjoyed uninterrupted financial growth extending all the way back to the dot.com bubble and 9/11, but then a global pandemic hit. Even a healthy business like baseball proved no match for Covid-19, as the sport saw revenue plummet by nearly 70% and EBITDA turn from a $1.5 billion profit into a loss of an even greater amount.

MLB Financial Snapshot, 2003-2020

Note: See below for relevant footnotes pertaining to financial metrics.
Source: Forbes.com

According to Forbes’ latest dive into baseball’s finances, the league lost a combined $1.8 billion on revenue of less than $3.3 billion, the lowest level since 2001. The COVID impact was felt by all teams, but high revenue clubs took the biggest hit, even though the league suspended its revenue sharing scheme. Among the biggest losers were the Dodgers, Mets, Red Sox and Cubs, but no team took it on the chin worse than the Yankees. The Bronx Bombers saw net revenue fall by more than 80% to just over $100 million, putting them in the almost unthinkable position of being one of the league’s lowest earning teams. Of course, it should be noted that Forbes reports revenue net of the team’s approximately $80 million payment in lieu of taxes (PILOT) to service its Yankee Stadium debt. Without that deduction, the team’s revenue would have still ranked first. Nonetheless, the Yankees saw a drastic decline in both revenue and profit.

So, does the grim reality of last year’s finances justify the frugal approach that most teams, including the Yankees, took this offseason? Not so fast. Perhaps the most important finding in the Forbes survey was that despite the massive impact that COVID had on business operations, the enterprise value of the combined league still increased by 3%, led, of course, by the Yankees, which Forbes now values at a staggering $5.25 billion. In other words, the Yankees more than recouped their operating loss with the estimated increase in franchise value, and so did just about every other team.

Estimated MLB Team Valuations: Forbes vs. Sportico

Note: See below for relevant footnotes pertaining to financial metrics.
Source: Forbes.com
, Sportico.com

Despite all the red ink, this latest Forbes’ report is perhaps the most impressive because it reveals how resilient each franchise has become, and that’s without considering how strongly leveraged the sport is to other high growth industries like media and technology. After all, the Forbes report does not consider related business interests, such as ownership in RSNs. However, another analysis conducted by Sportico, did take into account team-related businesses and real-estate holdings, leading to a league-wide franchise value of over $66 billion. With almost $10 billion of business value in excess of that which is contributed by team operations, it’s easy to see why even substantial losses in one season should not be used as a barometer for the sport’s financial health. Or, as one financier quoted in the Sportico report put it, “I think there is a better chance of the New York Yankees being here in 50 years than Apple being around in 50 years“.

“I think there is a better chance of the New York Yankees being here in 50 years than Apple being around in 50 years.”

– Anonymous sports financier

As MLB emerges from the pandemic, its business outlook is strong. National and local TV rights fees continue to rise; sponsorships remain strong and new partners continue to emerge; technology-driven endeavors like Major League Baseball Advanced Media remain lucrative; and the value of investments in related businesses, such as Fanatics, are increasing exponentially, while new opportunities continue to emerge. Unfortunately, you wouldn’t know that if you listened to the game’s owners, who never miss an opportunity to bemoan their losses. Normally, the owners’ cries of poverty could be dismissed as inane hyperbole, but, in the age of COVID, they carry more weight.

Baseball is not alone among businesses that are attempting to take advantage of the short-term impact of COVID to implement long-term “cost rationalization”. For baseball owners, that means parlaying COVID sentiment into lower payrolls that will persist long after the revenue impact has dissipated. If teams are successful in making these cost savings permanent, the operating losses incurred in 2020 will pale in comparison to the incremental profit earned going forward. That’s what makes the upcoming CBA negotiations so pivotal (and a work stoppage almost inevitable). Forcing the players to strike or invoking a lockout would clearly come with great risk, but if owners can get the MLBPA to crumble, the reward will be even greater. What a shame it would be if MLB survived the pandemic only to succumb to the greed of its owners.


Forbes Methodology:

Our team values are enterprise values (equity plus net debt) calculated using a multiple of revenue. The multiples are based on historical transactions and the future economics of the sport and team. Revenue and operating income (earnings before interest, taxes, depreciation and amortization) measure cash in versus cash out (not accrual accounting) for the 2019 season.

Our figures include the postseason and are net of revenue sharing and stadium debt payments for which the team is responsible. Revenues include the prorated upfront bonuses networks pay teams as well as proceeds from non-MLB events at the ballpark. Ownership stakes in regional sports networks, as well as related profits or losses, were excluded from our valuations and operating results. Sources include sports bankers, public documents like leases and filings related to public bonds and media rights.

In addition to team-specific net revenue figures, for 2019, Forbes also estimated total gross revenue at $10.5 billion, broken down as follows: gate receipts: $3.2 billion; central revenue: $3.1 billion; local media: $2.2 billion; sponsorships: $1.1 billion; and other stadium revenue: $925 million.

Forbes uses EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) as a measurement of operating income. Although usually defined as EBIT, Forbes not only adds back interest and taxes, but depreciation and amortization expenses as well. As a result, Forbes operating profit can appear higher than stated figures.

See here for Sportico’s Methodology.

It’s been nearly a year since most players took the field in front of living, breathing fans, and, not surprisingly, many found the experience to be a refreshing semblance of normalcy. But, what about the fans themselves? With pandemic-related concerns still lingering, are people actually ready to be taken out with the (possibly infected) crowd?

At the start of the exhibition season, all teams have been granted approval to admit fans at varying percentages of capacity based on state and local guidelines. In terms of available seats, the Cubs will allow the most fans through the turnstiles at 3,630, while the Yankees and Twins are pushing the furthest limit by extending capacity to 28%. At the other end of the spectrum, the Giants will only be admitting up to 1,000 fans per game, or about 9% capacity.

On average, spring training ballparks will admit around 2,000 fans per game, or roughly 21% of available seats. Will this limited supply be sufficient to meet demand, or will Covid fears keep even more seats empty?

If the first game is an indicator, fans appear eager to return to the ballpark. For the 14 games played on February 28, average utilization was over 94%, including seven teams above 99%. The lowest level of capacity recorded was 82.4% at the spring home of the Cardinals, though it’s worth noting that was nearly the same percentage that attended the team’s first exhibition game at Roger Dean Chevrolet Stadium in 2020.

Though one game does not a trend make, MLB teams should be encouraged by the initial attendance figures. Covid will probably have some dampening effect into the foreseeable future, but it’s becoming increasingly evident that fans are ready to head back to the ballpark. The big questions, of course, are how soon and to what degree will state and local governments allow them to root, root, root for the home team?

(This updated post was originally published on February 16, 2011, and has since been updated before each season)

For over 25 years, Tampa has been the Yankees’ spring training home, but it still seems like just yesterday when the team’s camp was located down the coast in Ft. Lauderdale. I am sure most fans who grew up in the 1970s and 1980s still reflexively harken back to those days of yore, while the real old timers’ memories take them all the way back to St. Petersburg, where Yankees’ legends from Ruth to Mantle toiled under the Florida sun.

Over the years, spring training has evolved significantly. Once upon a time, it was a pre-season retreat designed to help out-of-shape ballplayers shed the pounds added over the winter. In the early part of the last century, before even reporting to camp, players would often attend spas in places like Hot Springs, where they would purge their bodies of the iniquities from the offseason. Then, games would either be played among split squads (in the old days, the camps would be split into teams of veterans and hopeful rookies, the latter often called Yannigans) or against local minor league and college ball clubs. Finally, the teams would barnstorm their way back up north before finally kicking off the regular season.

Today, spring training is more big business than quaint tradition. Thanks to the growing competition between cities in Arizona and Florida (each state now hosts 15 major league clubs), teams have been able to extract sweetheart stadium deals, allowing them to turn the exhibition season into a significant profit center. Still, at the heart of spring training is hope and renewal as teams begin the long journey that is the baseball season.

The Yankees’ spring history has been a journey all its own. Below is an outline of some significant mileposts along the way.

Yankees’ Spring Training Homes Since 1901


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The MLBPA is expected to consider a proposal by baseball owners that would begin the 2020 season in July, but there could be fireworks long before Opening Day. Although “who plays where” is the question on the minds of most fans, the players and owners seem more concerned about answering “who gets what”? So, before a pitch is thrown, both sides will need to settle a brewing financial dispute that could be the first salvo in next year’s collective bargaining war.

Hypothetical Model of MLB Revenue and Expenses (82 games played without fans)

Based on some back of the envelope math, MLB owners stand to lose about $1.6 billion if 82 games are played without fans in attendance, which would more than wipe out the cumulative operating profit earned by the league in 2019. In an effort to mitigate this financial burden, the owners have incorporated a revenue sharing plan into their proposal. According to reports, players would be guaranteed 50% of all revenue, including the post season, and each contract would be paid proportionally.  Needless to say, the initial response from the union has not been welcoming.

Using last year’s estimates from Forbes, and reapplying the same assumptions outlined above, a 50% revenue sharing agreement would effectively amount to a 41% pay cut for the players. Essentially, the plan would shift two-thirds of the owners’ projected loss to the players, allowing the teams to lower their operating loss to around $600 million. It would also allow the owners to benefit fully from slashing other expenses. In fact, by cutting all non-payroll expenses by 30% (some of which would come naturally as a result of not hosting fans and having limited travel), MLB teams could actually turn a profit if the players agreed to such a drastic reduction in their compensation.

Effective Payroll Reduction Due to 50/50 Revenue Sharing Arrangement and Potential Profit from Overall Reduction of Expenses

Another reason why the MLBPA would be well advised to avoid a revenue sharing arrangement is because of how difficult it would be to determine eligible revenue and make sure teams did not manipulate the process. For example, if team-owned RSN revenues were exempt (as they currently are under MLB’s revenue sharing program), clubs could effectively shelter income from the players by offering rebates on rights fees. Considering the lack of trust between the two parties, coming up with a verifiable and enforceable revenue sharing agreement doesn’t seem possible at all, much less on short notice.

So, does that mean the players should reject the owners’ request for a concession out of hand? Unfortunately, the situation requires a more practical response than a stand on principle. After all, if forced to choose between losing $1.6 billion and not playing the season, the owners might opt for the latter, in which case, the players would take a much bigger financial hit. Not only would they collective forfeit well over $2 billion in compensation, players would also irrecoverably lose a year of earnings potential. Meanwhile, the owners would limit their losses and likely recover any lost enterprise value somewhere down the road.

Clearly, teams are facing a real financial burden, so it makes sense for the MLBPA to consider offering a reasonable financial concession. One potential solution could be a deferral. Instead of forfeiting salary, players could help teams free up cash flow by deferring 30% of their salaries over a defined period. For example, 50% could be payable in 2021, followed by 25% in each of the next two years, with these latter amounts adjusted for inflation. This framework would ease the burden on teams during the crunch, while ensuring players would be made whole once the crisis subsided.

Another alternative would be a straight cut of a more modest amount, perhaps 10%, with a revenue-sharing based bonus pool. Under this set up, players would know their minimum salary before playing a game and also leave themselves the potential to earn more should the league generate higher than expected revenue. From the owners’ perspective, they would get a needed immediate reduction in expenses without the obligation of future remuneration.

Getting the owners and players on the same page will likely be difficult, but even if both sides eventually come to an agreement, MLB will still have more financial restructuring to do, and, the result could be a revenue sharing agreement among teams that sees money flow from small markets to higher revenue clubs.

Source: Forbes (revenue data), capitainsblog.info (calculations)

The cause of this unorthodox imbalance stems from the disproportionate levels of local revenue earned by each team as well as the widely variable percentages of that amount derived from stadium sources. As a result of this disparity, which ranges from the Red Sox at 71% to the Marlins at 21%, as well as the large differences in team payrolls, five of the largest market teams would be in the red before even considering non-payroll expenses. To share the burden, it is likely that MLB will not only have to suspend its current revenue sharing scheme, but perhaps implement a new one that transfers money to perennial payors like the Red Sox, Giants and Cubs.

Source: Forbes (revenue data), MLB (payrolls), capitainsblog.info (calculations)

Even before the pandemic upended the sport, baseball was headed for a contentious round of collective bargaining, but now, with recriminations flying from all corners, the path to labor peace seems a lot more treacherous. In the coming days, as they grapple with how best to salvage the season, players and owners will take the first step on that road. If they can resolve their differences amicably, the goodwill created could pay long-term dividends. However, if the two sides remain at a stalemate, or begrudgingly come to an acrimonious compromise, shortened seasons could become the new normal for baseball.

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