The COVID-19 pandemic is devastating the U.S. and world economies. Small businesses across the country are facing an existential threat beyond anything they have ever encountered. Some larger businesses are taking major blows as well. Worst of all, 10% of the American workforce applied for unemployment over the past three weeks. Coronavirus is doing a real number on the American economy.
One area that seems economically unaffected by this pandemic is MLB and the teams that make up MLB. At least in terms of valuation, Major League Baseball teams have actually gained in value in 2020. In fact if you and your buddies could come up with enough cash, you could purchase the Milwaukee Brewers for the bargain basement price of $1.2 billion.
Brewers valued at $1.2 billion:https://t.co/Y1RDGpD0ZZ— Kyle Lesniewski (@Kyle_Lesniewski) April 13, 2020
The Forbes article mentioned above lays out the value of all the teams, and highlights the Chicago Cubs. The Ricketts family paid $700 million for the Cubs and Wrigley Field in 2009. Since that time, the Chicago Cubs have appreciated in value by five times what was paid in 2009. Across the league, the average MLB team’s value rose fourfold over the past ten years. Baseball has done well and looks poised to weather the storm of this pandemic.
However there is some threat to MLB. Even with the increasing valuation, there is potential loss for MLB if baseball does not resume in 2020. As mentioned in the Forbes piece, MLB hopes to play at least 100 games allowing the league to collect the bulk of revenue it would have enjoyed for a complete season. That would mean they could avoid returning money from national broadcasting deals in the event of games not taking place. Without those revenues, MLB and its teams would be taking a financial hit in 2020. Thus MLB and the Players’ Association are working hard on a plan to get MLB going even if it means that it occurs without spectators.
The value of the Brewers comes in at #24 among the 30 major league teams. Mark Attanasio and his investor group paid $223 million for the team in 2005. Their revenues came in at $295 million with an operating income of $43 million. That is a nice haul for Attanasio and his group of investors. Just think how well the Yankees, Dodgers, Red Sox, and as we’ve already seen, Cubs are doing.
Getting baseball back on the television in 2020 is important to maintaining the profits and valuations of MLB’s teams. The Brewers are no exception. It is also financially important for players to get back on the field. They will make substantially more as a group if they play baseball at some point this season than they would if the season was not played.
As a lot of the American population suffers with unemployment, unpaid rents and mortgages, illness, death, and just getting by, Major League Baseball continues to thrive even in the wake of crisis. This is not an indictment on MLB for doing well. It is an illustration that this powerful sports corporation (like other powerful corporations) is able and capable of withstanding and even thriving in this pandemic. The rest of America, on the other hand, is chest deep in this putrid mess brought on by COVID-19 where the repercussions are just at the beginning of rearing its ugly head.