Havok1517 wrote:Matthias wrote:Havok1517 wrote:I didn't wanna go back and read all of the posts but did want to mention that the Yankees are a horribly run business in terms of financial return though they are typically the most successful in terms of winning. The Yankee franchise is worth more than any other baseball team as well (Forbes).
One of these things isn't true.
What are you talking about? Forbes magazine valued the club at $1.026 billion in April 2006. For a few years now, the Yankees have spent more money than they have made. Just because they incur a loss doesn't necessarily effect the worth of the franchise nor the yankee name.
What I'm talking about is something called finance.
The value of any asset is equal to the present value of its future profits. I'm not going to give a primer on financial modeling here, but wikipedia has a decent link if you scroll down to the DCF analysis: http://en.wikipedia.org/wiki/Valuation_ ... cash_flows
But the upshot of it all is that an asset (be it an oil well, pizza joint, or baseball team) is worth the future value of its profit streams. The fact that the Yankees are worth the most according to Forbes means that they also profit the most, whether that profit shows up on Yankees revenues minus Yankees expenses or whether that profit shows up in its stake in the YES network. If you want to read how YES allows Steinbrenner to shield his revenues from baseball profit sharing and report a phantom loss in the operation of the Yankees, you can read here. http://www.forbes.com/forbes/2003/0428/064_print.html
So, to return to the original point, given that the Yankees are baseball's most highly-valued franchise, they are not financially poorly run. Indeed, the opposite is true.
Tavish has given a fairly good and comprehensive explanation on revenue sharing for the cable networks. Without contradicting anything he's said, I'd also just chime in that the new revenue imbalance isn't in the cable deals (although they continue to do so) but rather in other affiliated enterprises. http://www.baseballprospectus.com/artic ... cleid=3293 If you don't want to follow the link, the upshot is that by building a new Yankees stadium, Steinbrenner will be further bleeding Yankees, Inc., revenue, lowering his contribution to revenue sharing, to create a stadium and affiliated structures that will then be exempt from revenue sharing as they won't be part of the Yankees, Inc., income stream. (The tickets at the stadium will be, obviously, but the revenue from the planned hotel & conference center will not). And as far as I can tell, those plans are still operational. http://www.ballparks.com/baseball/american/nyybpk.htm
Wow. That was long. But this stuff isn't cut-and-dried.