Updated as of the release of Forbes 2023 revenue estimates and AP reporting of final 2023 MLB payrolls (not AAV).

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 percentage 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, 2003-2023

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)

For interactive charts comparing each team’s investment in payroll relative to revenue, click here.

After experiencing two years of pandemic-induced declines in revenue, MLB has fully recovered from Covid. According to Forbes’ latest “Business of Baseball” report, the sport’s revenue (net of stadium debt service) increased 8% to over $10.3 billion, just a shade below the previous record set in 2019.

Forbes’ Estimate of Annual MLB Revenue, 2003 to 2022

Note: Revenue is net of revenue sharing, competitive balance taxes and stadium revenue used for debt service.
Source: Forbes, captainsblog.info

The increase in revenue was mostly the result of a big rebound in attendance, as all ballparks were open without restriction during the season. That helped push 2022 gate receipts over $3.1 billion, or 30% of net revenue and nearly 10% better than 2019’s record total. Notably, this climb in ballpark sales occurred despite attendance being over four million fans below 2019, illustrating the impact of teams shifting their focus from selling tickets to providing premium-priced event experiences.

Forbes’ Estimate of MLB Gate Receipts vs. Total Attendance, 2018 to 2022

Source: Forbes, baseball-reference.com, captainsblog.info

The Yankees easily led all teams in gate receipts, taking in nearly $300 million from ticket and suite sales. That was nearly $100 million more than the champion Astros and the Dodgers, and nearly 10 times as much as the bottom ranking Marlins. Thanks to its deep run in the postseason, the Astros were the team whose gate impacted the top line most. Over 50% of Houston’s net revenue was derived from attendance. The teams whose gate made the least impact were usual suspects like the Marlins, Rays and A’s, all of which saw less than 15% of net revenue come from ticket and suite sales, well below the league average of 37%. Considering the relative elasticity of attendance to team success, this suggests that smaller market teams have great potential to significantly increase their revenue by investing more in their roster.

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On December 21, Aaron Judge was named the 16th Yankees’ captain? Or, was it the 15th? Would you believe the 17th? Unfortunately, the answer isn’t all that clear.

The reason for the confusion is due to the list of captains provided in the Yankees’ press release announcing the appointment of Judge. Included among the ranks of prior captains was a little known utility infielder named Rollie Zeider, who played all of 50 games for the Yankees in 1913. But that wasn’t the only historical curveball in the team’s pronouncement. Everett Scott, who in the past has been widely regarded as having been a captain from 1922 to 1925, was omitted from the list.

So, what gives? Was Zeider a captain despite such a brief and unremarkable tenure? And, was Scott’s captaincy incorrectly assumed for so long? What about other Captains who have emerged after years of being ignored by history?

Before diving deep into these questions, let’s first establish what isn’t in dispute, or at least wasn’t until Judge’s appointment last week. The line of Captains since Lou Gehrig is uncontested.  Since the Iron Horse’s tenure, nearly every source agrees that Thurman Munson, Graig Nettles, Ron Guidry and Willie Randolph as co-captains, Don Mattingly and Derek Jeter also filled the role. Finding agreement before Gehrig, however, is another matter. Modern sources as well as those cited in the historical record have differed on who deserves the title of Yankee Captain. What follows is a chronological examination of all contested Captains (using details stated in the Yankees’ press release) as well as a brief examination of how the historical line was presented at the time of each new coronation after Gehrig.

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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?

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