CINCINNATI – Between the baselines, the Reds were tied with the Cubs in first place after the first week of the season, but when it comes to the bottom line, the Reds are no match for the World Champs.
Bob Castellini’s club ranks 28th among the 30 MLB teams in value, according to Forbes’ 20th annual report released Tuesday. Forbes measures the Reds’ value at $915 million.
That might sound like a lot, but the Cubs, ranked fourth, are valued at nearly three times the Reds ($2.675 billion).
The richest team, the New York Yankees, is valued at four times the Reds ($3.7 billion).
Why should fans care?
Franchise value may not guarantee where a team finishes in the standings or who wins the World Series, but it does impact how much a team spends on players.
While the disparity between big-market teams and small-market teams in the Forbes rankings is nothing new, the Reds not only rank near the bottom, their 1 percent growth in value was the smallest of all MLB teams.
Forbes reports that baseball teams' values are surging, and the Reds aren’t keeping pace - or even close to it. To wit:
- The average team is worth $1.54 billion, 19% more than one year ago, according to Forbes.
- Forbes values 23 teams at more than $1 billion this year, compared to 17 teams last year.
- While the Reds grew 1 percent, only three other teams grew less than 10 percent. More than half - 16 teams - grew more than 20 percent.
By Forbes’ count, the Reds still had an operating profit of $15.9 million last season. But they only avoided a significant loss by continuing to dump veteran player salaries in the "rebuild" they started in midseason 2015. And they didn’t add to the player payroll this year. The Reds’ Opening Day payroll barely increased from $92.7 million in 2016 to $93 million, according to Forbes.
That's a 0.3 percent increase - not a jump, barely a hiccup.
The Reds started the new season 25th in player payroll – down from 24th last year – and ahead of only the Pittsburgh Pirates, Oakland A’s, Tampa Bay Rays, San Diego Padres and Milwaukee Brewers.
Forbes didn’t say so, but the half-million drop in Reds’ attendance last year obviously cut into the team’s value and ownership's willingness to spend.
It figures that if the Reds can improve on the back-to-back disasters of 2015 and 2016, attendance should go up - and the team’s value with it. And while we're being optimistic, two other factors figure to drive up the Reds’ value.
One is the club’s new local TV deal. The Reds’ new extension with Fox Sports Ohio through 2032 came with an equity stake in the regional sports network and is worth more than twice as much as the old deal, Forbes reported.
The other is the surging value of Major League Baseball Advanced Media, the Internet and technology arm of MLB that is owned equally by the 30 teams. It likely contributes between $400 million to $500 million in value to each team, according to Forbes.
The Reds can never compete financially with the New Yorks, Chicagos and LAs, and even St. Louis has widened the gap between the haves and have-nots in the NL Central. The Cardinals are valued at $1.8 billion - essentially twice as much as the Reds.
Not that anybody should be surprised, big-market teams are stacked at the top of the new Forbes’ value list, and small-market teams are clumped at the bottom.
At the top, after the Yankees, the next five - LA Dodgers, Boston Red Sox, Cubs, SF Giants and NY Mets - are valued between $2.75 billion and $2 billion.
Only the A’s ($880M) and Rays ($825M) are valued lower than the Reds. The Brewers ($925M) and Cleveland Indians ($920M) are barely ahead of the Reds.
In the last two years, the Indians and Royals proved that small-market teams can win against big-market, big-money teams. But it helps to have more smarts in choosing and paying the right players.