Though the Cleveland Indians have long disagreed with how Forbes Magazine evaluates the value of sports franchises, their latest report has the team currently worth $410 million. This amount represents a 16 percent increase year-over-year and places them 26th among all Major League Baseball teams.
Forbes reports that, among these numbers, the Indians earned $178 million in revenue, had a debt ratio of 27 percent and operating income of $30.1 million — the largest amount of operating income earned by any MLB team in 2011. Included in this figure is the revenue incurred from the team’s ownership of a Regional Sports Network (RSN).
Although both the Kansas City Royals and Minnesota Twins were unsuccessful with attempts to launch RSNs in 2003 because they could not strike sufficient deals with carriers, the Cleveland Indians have shown that it is possible for a small market team to have its own network. The Indians started SportsTime Ohio in 2006, spurning a rights fee offer from Fox Sports Net Ohio in excess of $30 million per season. Although the Indians raked in less than $30 million in rights fees from SportsTime last year, team owner Larry Dolan and his family made a huge profit from their ownership of the RSN. Besides Indians games, STO programming includes coverage of the Browns, Ohio State, high school sports, the Mid-American Conference and golf.
The Indians were in lockstep with the average Major League Baseball team which rose 16% in value during the past year. In 2011, revenue for the league’s 30 teams climbed to an average of $212 million, a 3.4% gain over the previous season. Operating income fell 13%, to an average of $14 million in part due to a 5.1% increase in player costs.
The New York Yankees, Los Angeles Dodgers and Boston Red Sox are the three most vauable franshises, each clocking in over $1 billion. The Kansas City Royals, Pittsburgh Pirates, Tampa Bay Rays and Oakland Athletics hold down the back end, each being worth less than $300 million.
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