The Important Baseball Statistics
Baseball is all about statistics. Hits, strikeouts, errors, on base percentage, earned run average. These revealing numbers cause a fan to smell a beer, hot dog, and pretzel and feel the sun on their skin in a June afternoon in a ballpark. But some statistics sooth owners: team value, revenue, profit.
Forbes Magazine puts out a report of valuations of baseball teams every year before opening day. As baseball has no real shareholders other than the owners, it is not as much data for the investor as fuel for those who consider baseball a greedy monopoly and enjoy getting up a good head of steam about it. I suppose I'm one.
The magazine estimates the value of every team based upon four basic categories:
I am an excel geek. I love taking data I find online and putting it in a spreadsheet to play with it. So I pulled out the value, debt to value percentage, revenues, and profits of all 50 MLB teams for opening day 2013 and 2011 below, adding in the teams' winning percentage this season as of July 2013. It's worth a perusal.
Some fun things about the numbers below:
The Chicago Cubs has over the last couple decades been consistently one of the worst teams in baseball, yet it is one of the most valuable teams in baseball, almost 50 percent more valuable than their south Chicago neighbors, the White Sox, but there is the difference. The wealth of Chicago is in the north, the working classes and poor are in the south.
Profits of most baseball teams actually decreased between opening day 2011 and 2013. However the value of almost every baseball team increased remarkably over those two years, an average of 43%. Most of that increase comes from negotiated future earnings in TV and other media, though some comes from the ever more plush stadiums that MLB manages to con cities into paying for. One thinks baseball makes most of its money from tickets, t-shirts, and the like. The real money comes from television contracts, and, increasingly, online media. Broadcast contracts in big TV markets rivals ticket sales in annual revenues.
What stirred up my interest is the path the Washington Nationals have taken since moving to DC from Montreal. They have not been a very good team for most of their time here, except last season. This year prices exploded at Nationals Park, for everything from tickets to beer, the most expensive in the league. Long term fans assumed that would be the case after a relatively successful season, but many of us have been alarmed by the shameless greed of the franchise this year.
A friend of my wife's has been season ticket holders since the team came to DC. She lived in Montreal in the past and was a fan of the franchise then, so her devotion to the team has been somewhat enduring. One of her children went to school with the owner's grandchildren. The evening of a dance, parents met at the Lerners to take pictures of the children together. The longterm fan's husband chanced into the kitchen of the house when he noticed the game was on there. One of the Lerner family walked in and the fan explained and apologized for being there, noting they had been season ticket holders since day one at RFK. The Lerner family member asked where the tickets were. The fan explained up in the 400 section, great view for a great price. Instead of thanking the fan for his steadfast support of the team and income for several seasons, the Lerner said that he's been telling everyone that they have to charge more for those seats.
From 2011 to 2013, the value of the Washington Nationals increased by 51%. Yes they went from a sub .500 team in 2010 to division champions in 2012. And DC is a wealthy town now. My house is in DC, a housing market that the recession barely touched, and according to the assessor the value increased 8% between those two years (I would differ, as one of the azelea bushes in the front yard died and part of the kitchen ceiling collapsed from a bathroom leak that we had to fix, but that's just quibbling). But are the Nationals 51% better than 2011? They are under .500 and have lost 8 of the last ten games, yet the stadium had sell outs for a series of three spectacular losses to the Dodgers last week.
The team has gradually climbed up the Forbes list of team value since moving to DC from Montreal, breaking into the top half this season. Another bonus to the Lerners is, even in seasons when the team lost over half of its games, it was among the most profitable teams in baseball, even when most of the leagues profits were declining. There was no great incentive to improve the team, here in DC or anywhere in the MLB, when the profits keep pouring in and the value increases faster than the stock market.
So when comparing slugging percentages, RBIs, strikeouts, and other game statistics, perhaps it's also worth considering why the teams never really get better. They don't have to, because it doesn't matter whether you win or lose, it's how much money someone makes from the game.
Forbes Magazine puts out a report of valuations of baseball teams every year before opening day. As baseball has no real shareholders other than the owners, it is not as much data for the investor as fuel for those who consider baseball a greedy monopoly and enjoy getting up a good head of steam about it. I suppose I'm one.
The magazine estimates the value of every team based upon four basic categories:
- the value of the team's stadium: are there lots of ways to sell beer, hot dogs, and expensive seats?
- the value of the team's brand: how are the t-shirt sales?
- the value of the team's market: how much money do the locals have to blow on beer, t-shirts, and expensive tickets?
- the value of the sport: the team's proportion of the value of major league baseball in general
I am an excel geek. I love taking data I find online and putting it in a spreadsheet to play with it. So I pulled out the value, debt to value percentage, revenues, and profits of all 50 MLB teams for opening day 2013 and 2011 below, adding in the teams' winning percentage this season as of July 2013. It's worth a perusal.
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- The total value of the richest three teams in baseball is greater than the total value of the poorest 10 teams in baseball.
- This average of the richest 5 teams in baseball season's winning percentage as of July 22 is .517. The average of the poorest 5 teams is .522. The value of the richest 5 is three times the value of the poorest 5 teams.
- Three of the top ten team winning averages are among the 10 richest teams. Three of the top ten averages are among the 10 poorest teams. The same proportions apply for the lowest winning averages, 3 for 10 each.
- The value of the second place team, the Oakland Athletics, is almost a third of the value of the third place team, the Boston Red Sox.
- Among the richest teams in baseball are the most beloved and most hated teams, but not necessarily the best
The Chicago Cubs has over the last couple decades been consistently one of the worst teams in baseball, yet it is one of the most valuable teams in baseball, almost 50 percent more valuable than their south Chicago neighbors, the White Sox, but there is the difference. The wealth of Chicago is in the north, the working classes and poor are in the south.
Profits of most baseball teams actually decreased between opening day 2011 and 2013. However the value of almost every baseball team increased remarkably over those two years, an average of 43%. Most of that increase comes from negotiated future earnings in TV and other media, though some comes from the ever more plush stadiums that MLB manages to con cities into paying for. One thinks baseball makes most of its money from tickets, t-shirts, and the like. The real money comes from television contracts, and, increasingly, online media. Broadcast contracts in big TV markets rivals ticket sales in annual revenues.
What stirred up my interest is the path the Washington Nationals have taken since moving to DC from Montreal. They have not been a very good team for most of their time here, except last season. This year prices exploded at Nationals Park, for everything from tickets to beer, the most expensive in the league. Long term fans assumed that would be the case after a relatively successful season, but many of us have been alarmed by the shameless greed of the franchise this year.
A friend of my wife's has been season ticket holders since the team came to DC. She lived in Montreal in the past and was a fan of the franchise then, so her devotion to the team has been somewhat enduring. One of her children went to school with the owner's grandchildren. The evening of a dance, parents met at the Lerners to take pictures of the children together. The longterm fan's husband chanced into the kitchen of the house when he noticed the game was on there. One of the Lerner family walked in and the fan explained and apologized for being there, noting they had been season ticket holders since day one at RFK. The Lerner family member asked where the tickets were. The fan explained up in the 400 section, great view for a great price. Instead of thanking the fan for his steadfast support of the team and income for several seasons, the Lerner said that he's been telling everyone that they have to charge more for those seats.
From 2011 to 2013, the value of the Washington Nationals increased by 51%. Yes they went from a sub .500 team in 2010 to division champions in 2012. And DC is a wealthy town now. My house is in DC, a housing market that the recession barely touched, and according to the assessor the value increased 8% between those two years (I would differ, as one of the azelea bushes in the front yard died and part of the kitchen ceiling collapsed from a bathroom leak that we had to fix, but that's just quibbling). But are the Nationals 51% better than 2011? They are under .500 and have lost 8 of the last ten games, yet the stadium had sell outs for a series of three spectacular losses to the Dodgers last week.
The team has gradually climbed up the Forbes list of team value since moving to DC from Montreal, breaking into the top half this season. Another bonus to the Lerners is, even in seasons when the team lost over half of its games, it was among the most profitable teams in baseball, even when most of the leagues profits were declining. There was no great incentive to improve the team, here in DC or anywhere in the MLB, when the profits keep pouring in and the value increases faster than the stock market.
So when comparing slugging percentages, RBIs, strikeouts, and other game statistics, perhaps it's also worth considering why the teams never really get better. They don't have to, because it doesn't matter whether you win or lose, it's how much money someone makes from the game.
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