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Forbes: It’s the Yankees and the 29 dwarves

New York YankeesIt’s not even close: in the magazine’s annual evaluations of Major League Baseball franchise values, Forbes prices the New York Yankees at an astounding $1.7 billion — some 86 percent more than runner-up Boston Red Sox and far outpacing the average franchise value of $523 million. Still, you’ll be surprised by the most profitable team in baseball.

In fact, the Yankees are a veritable money machine: Forbes estimates that with the addition of Legends Hospitality and YES Network, the combined entity is worth $5.1 billion. YES is ranked at the most profitable regional sports network out there.

Here’s a photo gallery of all the team valuations.

There’s nothing especially surprising in the valuations: teams with new ballparks, like the Twins and the Marlins, saw their valuations increase; teams with clearly declining revenues, like the Indians, saw their valuations decrease. Overall, total MLB revenue rose to $6.1 billion in 2010.

The Forbes rankings always generate some grumbling in the baseball world. On the one hand, they’re not necessarily tied to any real-world valuations, as teams never sell for what Forbes says they’re worth. (An example: the Rangers sold last year for $593 million, as compared to the $561 million Forbes says they’re worth.) When a team hits the market for real and attracts multiple bidders, things tend to get out of control in a show of irrational exuberance — the effect of scarcity distorting the market.

And the real world tends to evaluate profit and loss a little differently than MLB. Hang around in baseball circles and you’ll hear constant tales of teams this close to the poorhouse, that they can’t afford this or that. By Forbes’ accounting, only three teams a negative operating income in 2010: the Tigers, the Mets and the Red Sox.

And the most profitable team? That would be the San Diego Padres, who earned $37 million in operating income based on a strong performance at the box office and $30 million in MLB profit-sharing. Amazing.

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