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How much is that baseball team in the window?

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Via Maury Brown, we learn that Forbes this week released their annual Business of Baseball report. Why is this relevant to us Yankee fans? Well, because the team is worth $1.3 billion, tops in the league by nearly $500 million.

Forbes’ list of baseball franchises shows the Yanks atop a list of the usual suspects. At $1.306 billion, the Yanks’ valuation puts them ahead of the Mets ($824 million), Red Sox ($816 million), Dodgers ($694 million), Cubs ($642 million) and Angels ($500 million). The Marlins and Rays at $296 million and $250 million respectively hold up the list from the bottom.

While the Yankees’ worth increased by nine percent over 2007, no Major League team saw their value decline. The Orioles and Blue Jays saw one and two percent grown respectively, but it is safe to say that baseball as a business is booming.

On the revenue front, the Yanks have a clear advantage over their competitors. Astheir franchise breakdown shows, the team draws in $171 million worth of gate receipts alone. Factoring in unparalleled attendance numbers, brand management and concession sales, the Yanks are rolling in the dough to the tune of $327 million in 2007 revenue. The Red Sox took in $262 million. Those figures for the Yanks should only increase as the Yanks move across the street to their high-falutin’ new digs next season.

Interestingly, the Yanks — along with the Red Sox and Blue Jays — operated at a net loss. The AP tells us why:

The Yankees were listed by Forbes as having $327 million in revenue last year and a $47.3 million operating loss, up from a $25.2 million loss on revenue of $302 million the previous year. Forbes’ revenue figure is after deducting revenue sharing payments, which the Yankees estimate at about $92 million. The team also paid approximately $24 million in luxury tax, which is reflected in the operating loss.

Now, as far as I understand it, these valuations do not include YES Network estimates and revenues, all of which feed the Yankee Empire. From what we’ve heard over the last few months, the YES Network could in fact be worth more than the Yankees. Considering that George Steinbrenner and his group of investors bought the team from CBS in 1973 for a measly $10 million — approximately $48 million in 2008 — that is a pretty stellar investment all around.

The economics of Yankee tickets

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A contextless table of Yankee ticket prices by year has elicited a small reaction from a few bloggers. WasWatching tossed up a brief post on the subject and iYankees noted the cost of going to the game.

The AP presented in the information in a way that suggests that Yankee ticket prices have, by and large, gone up for over forty consecutive seasons now. The tickets for field boxes were $3.50 in 1967 and now cost $250. Except for consecutive years in which the prices were held steady, then, the cost to attend games has been on the rise since the days of Lyndon Johnson, right?

Well, note quite. Take a look at this chart with a third column I added using inflation data. A graph put together by Tommy follows the table.

Year Ticket Price 2008 Dollars
1967 $3.50 $22.18
1968 $4.00 $24.33
1969 $4.00 $23.07
1970 $4.00 $21.82
1971 $4.00 $20.91
1972 $4.00 $20.26
1973 $4.00 $19.07
1974 $4.00 $17.18
1975 $5.00 $19.67
1976 $5.50 $20.46
1977 $6.00 $20.96
1978 $6.50 $21.10
1979 $7.00 $20.41
1980 $7.50 $19.27
1981 $7.50 $17.47
1982 $8.50 $18.65
1983 $9.00 $19.13
1984 $9.00 $18.34
1985 $9.75 $19.18
1986 $9.75 $18.83
1987 $10.00 $18.63
1988 $11.00 $19.68
1989 $12.00 $20.49
1990 $12.00 $19.44
1991 $12.50 $19.43
1992 $14.50 $21.88
1993 $16.00 $23.44
1994 $17.00 $24.28
1995 $25.00 $34.73
1996 $25.00 $33.73
1997 $35.00 $46.16
1998 $45.00 $58.44
1999 $50.00 $65.53
2000 $55.00 $67.61
2001 $62.00 $74.11
2002 $62.00 $72.96
2003 $72.00 $82.84
2004 $80.00 $89.65
2005 $90.00 $97.55
2006 $110.00 $115.51
2007 $150.00 $153.15
2008 $250.00 $250.00

ticketpriceslog.PNG

A funny thing happens on the way to 2008. It now appears as though ticket prices for the Yankees remained steady, in 2008 dollars, for nearly thirty seasons. In 1967, it cost $3.50 to purchase a Yankee field box seat. That’s $22.18 in 2008 dollars. Twenty four years later, in 1994, it cost $17 to purchase the same ticket or $24.28 in 2008 dollars. In 1994, $3.50 from 1967 would get you $15.53. Ticket prices, in other words, were tracking inflation.

The spike — and we seem to still be in the middle of it — occurred following the 1994 season when ticket prices went through the roof. All of a sudden, the Yankees were good, the Yankees were popular, and the Yankees were very, very expensive. In 14 years, Yankee ticket prices have increased by a factor of 10 from a 2008 value of $24.28 in 1994 to $250 in 2008. That’s crazy.

Meanwhile, some bloggers and fans always ask why, and for that, we turn to the market. The Yankees are selling tickets at a face value of $250 per, and they’re selling out the stadium. Tickets for premium games sell on StubHub for well over that value. The market, in other words, can afford it, and the Yankees are just trying to capture their revenues.

If you can sell out a stadium at $150 a ticket and at $250 a ticket, what owner wouldn’t charge the higher amount? The fans, of course, are the ones who lose out, and it times like these when we remember that baseball is a business. It’s all about the bottom line.