Absurd Yankees valuation defies owners' message heading towards MLB lockout

If this were a Boston Red Sox fan site, we'd be chanting, "Sell the team!" every time the Yankees faced a fifth-inning deficit. We have more decorum than that, so we won't, but ... still, it's pretty interesting that Hal Steinbrenner hasn't more closely considered selling this here team after the latest evaluation they've received.

During the (shudders) process of turning over a portion of the team to private equity in the Apollo Sports Capital deal that'll help clean up their debts and hopefully nothing more (here's hoping!), it came to light that the current operating valuation of the Yankees franchise is nearly $10 billion. And if one good thing — only one! — can come of Apollo's sudden injection into the Yankees' processes, let it be this: the owners who've been banging the drum from small towns to each sprawling metropolis to claim they simply cannot turn a profit running Major League Baseball teams are ... not being entirely truthful. There may be a white lie or two mixed into their claims!

Is there a chance Yankees use recent influx of cash to compete, or is it just another bargaining chip?

Quoted in the above piece, super-agent Joel Wolfe (who represents Giancarlo Stanton, among others), expressed optimism that the Yankees will use this influx of cash for aggressive spending. I would rank that as possible, but unlikely; private equity doesn't usually show up and tell people to start spending inefficiently.

Instead, it seems to me that the Yankees found a new revenue stream and a way to eliminate any debts they've collected — and it wasn't that hard to do so. They're a massively valuable franchise that everybody wants a piece of. Not every baseball team is the New York Yankees, but every baseball team remains a desired asset to investors, profiteers, and money-grubbers of all kinds. The current party line, famously parroted by Steinbrenner and Bill DeWitt of the Cardinals, that running an MLB team simply isn't profitable is an exaggeration of their financial reality. There are more operating costs than the layperson likely thinks of when they scream at the skies, but there's certainly a ton of money in owning a baseball team.

As we gear up for a lockout, remember that MLB owners' restrictive definition of what constitutes baseball-related revenue allows them to claim players will gain more access to capital under a salary cap. Remember how much revenue-sharing money is already sent to teams like the Marlins and Pirates for them to sit on and bathe around in, used to line their own pockets and nothing more (it's like private equity cash, but for every team). And remember just how much revenue-sharing money the Dodgers get to add to their coffers because of their one-of-a-kind deals.

Baseball does have a parity problem, but it begins with figuring out now to neutralize the Dodgers' advantages. It does not have anything to do with team ownership being a never-ending sinkhole for all involved. The New York Yankees are worth almost $10 billion.

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