Ripples on the Pond: Forbes Valuations

Forbes recently unveiled their valuations and related rankings of all 30 major league franchises. The Minnesota Twins, thanks in large part to the opening of the jewel that is Target Field, came in at #12.

Clipped from: www.forbes.com (share this clip)

When it comes to the rest of the AL Central, only the Chicago White Sox at #10 ranked higher than the Twins, but they continue to be the second class team in Chicago as the Cubs came in at #4. Detroit was a distant 3rd among our division rivals at #21 while the Cleveland Indians and Kansas City Royals ranked #25 and #26 respectively.

I’m not a business expert, nor am I an economist but I found the ratios of player expenses to gate receipts rather interesting.

Again I’m not an expert on the business side of things but it has to be a positive sign that the gate receipts almost cover the team’s payroll expenses. I believe (and my memory may be faulty on this) that a percentage of each team’s home gate gets shared with the visiting teams, but regardless the Twins ratio is far and away the “healthiest” of all the AL Central organizations. It will be interesting to see if the gate and revenues drop off in 2011, but I have a suspicion that they won’t decline – at least not significantly – for many seasons.

All of the numbers included in the team by team profiles of this “study” give me a great deal of optimism with respect to their ability to spend money where it is needed to keep a quality, playoff-caliber team on the field each and every season. The organization still needs to be smart with they money they have, but at least they are at a point where they can give extensions to more of the players they want to retain. Perhaps more importantly, they now also have the financial flexibility to recover from the mistakes that every team makes no matter how well run they are.

If I am misguided in my conclusions and optimism based on the numbers, please feel free to set me straight in the comments section.