In baseball, the great game of statistics, one set of numbers has grown more important than the rest.
These figures are not the proprietary work of a data scientist toiling away late into the night. They don’t even measure on-field performance; not directly, anyway.
Yet franchise values — as measured in billions of dollars — might soon determine whether Major League Baseball has a season in 2027.
Over today and tomorrow, players and owners are expected to make their opening economic proposals in negotiations for a new collective bargaining agreement. The owners are going to push for a salary cap and floor, a system players don’t want, and the ensuing labor fight could eventually lead to canceled games.
Why, at a time when MLB has otherwise built positive momentum, would the league pursue such an acrimonious change, and risk alienating fans with a work stoppage? Many issues are at play, but none supersede the long game owners are playing. Their mission is to maximize the worth of their teams.
Baseball has always been a business, yes — but not like this. Private equity has flowed into the sport for the better part of a decade, and someday, those investors will want a return. And even though every team continues to grow in value, many owners believe that their clubs should command still-higher prices.
The average baseball team is worth $2.9 billion, more than double MLB’s $1.3 billion average from a decade ago, per Forbes’ annual estimates. But some franchises are appreciating at a much slower rate than others. When they put their teams up for sale in recent years, the owners of the Los Angeles Angels, Washington Nationals and Minnesota Twins were disappointed by the bids that came in.
What’s perhaps most irksome to baseball owners, however, is that they keep getting trounced by owners in other leagues. The average National Basketball Association team is worth $5.4 billion, and the average National Football League team $7.1 billion, per Forbes.
Two of 30 baseball teams appear to have doubled in value since 2021. Meanwhile, across the NBA and NFL combined, 61 of 62 teams have doubled, per Forbes.
“You’ve seen this widening of the gap,” said Steve Greenberg, a veteran sports banker at Allen & Company who’s advised many baseball teams in their sale processes. “Baseball’s been stagnant for about five years.”
The San Diego Padres are about to change hands in a deal that values the team at $3.9 billion overall, a record price for an MLB club by about $1.5 billion. To some, that increase might seem like significant growth. But for competitive billionaires, “good enough” isn’t always part of the lexicon.
Conversations about franchise value often center on revenue multiples, a way of measuring a business’ worth. A company that can be sold for 12 times its annual gross revenue — which is what Greenberg estimates teams in the NBA and NFL sell for today — is typically doing better than one that sells for six or seven times its revenue, like MLB teams.
“The values of MLB teams on a multiple basis have lagged, and lagged by 50 percent if you compare it to NBA, NFL,” said Greenberg, the son of Hall-of-Fame slugger Hank Greenberg.
The owners are emboldened not only because they see a problem — they also believe they see a solution.
Every day, they watch other leagues make use of the system they want in baseball. The NBA, NFL and National Hockey League all have a salary cap and floor. MLB does not.
The leading reason MLB valuations trail is a lack of “payroll certainty,” according to Sal Galatioto, president of the sports banking firm Galatioto Sports Partners.
“In the NFL, for instance, you have a hard cap. In the NHL, you have a hard cap. You don’t have that in baseball,” said Galatioto. “You have a small number of teams that spend significantly more than the majority of teams.”
The CBA negotiation is an “800-pound gorilla” that’s “going to have a huge impact on the value of these things,” he continued.
Even if owners eventually abandon a cap proposal, franchise values would be a large part of their calculus. A lengthy lockout could damage team prices by pushing fans away, at least for a time. But it’s too early in the negotiations to know how owners will treat that cost-benefit analysis.
“Everybody I talk to agrees that the current economic system doesn’t work,” Galatioto added.
The players’ union disagrees, however, and argues that the owners can grow their franchise values without a salary cap.
Under late owner Peter Seidler, the Padres spent heavily on payroll and posted great attendance figures — even though they play in one of the smallest media markets on baseball’s circuit.
“Despite a steady drumbeat of management complaints about lagging franchise values and small markets’ supposed inability to compete, the reported Padres’ sale is yet another example that our game has never been stronger — that owners willing to invest in gifted players while also developing home-grown talent will be rewarded at the turnstiles, in the standings, and in the market,” Bruce Meyer, the interim head of the Players Association, said in a statement. “The Padres’ commitment to winning has now resulted in a reported record sale price of nearly $4 billion, boosting the value of every team in every market.
“The lesson could not be clearer: when clubs prioritize winning, fans, players, and owners are all better off.”
As an expected lockout in December approaches, few questions will be more relevant than these: what is the state of baseball franchise values today? How has private equity’s entry into ownership groups affected those values, and how will franchise values affect the potential work stoppage?
MLB declined comment for this story.
What’s the state of franchise values?
Prices keep going up, and not only for gasoline.
From 2021 to 2026, the total worth of MLB’s 30 teams has increased roughly 50 percent, to about $87 billion, per Forbes’ estimates. Baseball teams have cumulatively gained about $30 billion in that period.
What’s debated is whether they’re rising enough, and whether enough teams share in those gains.
NBA teams? They’re up $97 billion in the last six years of valuations Forbes has released, beginning with the 2020-21 season, up through their estimates for the 2025-26 campaign. The NFL, which has two more teams than baseball and basketball, has added about $130 billion in that same stretch.
Opinions about baseball’s status quo fall along party lines. Management types who think MLB will benefit from a salary cap often suggest that the sport has a problem.
“I’ll tell you exactly what we’ve been telling clients: baseball, writ large, is undervalued,” Greenberg said. “The teams are undervalued relative to the rest of the sports ecosystem.”
Meanwhile, player advocates opposed to a cap suggest the industry is doing well enough, if not thriving.
“The players have consistently maintained that it is not their responsibility to help billionaires with their budgets, but the players have long been committed to creatively resolving the issues,” player agent Seth Levinson said.
Another player agent, Scott Boras, used that same word Greenberg did: “undervalued.”
The sides generally agree on one factor holding down franchise prices: the sport’s national TV deals, which are worth somewhere north of $2 billion annually. The current agreements expire after the 2028 season, and Boras believes MLB has an “explosive media rights valuation on the way.”
The NFL, by far the most financially successful league, is estimated to bring in at least $10 billion for its media rights, a number it’s now trying to greatly increase. The NBA sits close to $7 billion.
“(MLB) doesn’t have the media contracts the NBA and the NFL has, but that could change,” Galatioto said.
Does the Padres sale change anything?
The recent sale of the Padres to José E. Feliciano, co-founder of the private-equity firm Clearlake Capital, and Kwanza Jones, is a litmus test for industry perspectives.
The Padres’ $3.9 billion valuation shatters the record for an MLB team in a transaction. Hedge-fund titan Steve Cohen paid $2.4 billion back in 2020 for the New York Mets, a club in a much larger market.
The Padres’ haul does show progress for MLB: it suggests the league’s revenue multiple is growing.
“The Padres were (sold for) seven times revenue, something like that, which is great relative to the rest of baseball,” Greenberg said of the $3.9 billion figure. “But as big as that number seems — they have done a terrific job, have really high revenue — as a multiple, it’s still south of the NHL, probably south of Major League Soccer as well. And we think the reason for that is systemic.”
Forbes estimates that all 32 NFL franchises and 26 of 30 NBA franchises are worth more than the Padres’ purchase price.
Relative to other MLB teams, the Padres are arguably the exception. Their sale price marks a 160-percent jump from 2021, when Forbes estimated their worth to be $1.5 billion. That’s the highest percentage increase for any baseball team in that span.
The Nationals, meanwhile, have the lowest growth rate. Forbes values them at $2.15 billion today, up about 12 percent from 2021.
“We did represent the Washington Nationals when they were on the market, and ultimately pulled them off the market because the offers did not reach the level that owners were willing to sell at,” Greenberg said. “It’s like if you put your house on the market and you don’t get the price you want. You keep living in the house and paying the mortgage, and you wait ’til the market turns, or you decide to move.”
The union’s position is that more teams need to spend like the Padres to achieve similar results.
The Los Angeles Dodgers, the two-time defending World Series champions who have the highest payroll in baseball at about $420 million, per Cot’s Contracts, saw their worth grow to $7.8 billion this year, per Forbes — a 118 percent increase from 2021. That might be conservative, as another outlet, Sportico, pegs the Dodgers at $9 billion today.
Boras argued that baseball’s current valuations have already produced “huge financial gains” for owners. The higher the prices, the more equity owners have to borrow against. Last year, the owners of the Dodgers spent $10 billion to buy the NBA’s Lakers.
What has made teams so pricey?
Some fans would prefer clubs to operate more like public trusts, rather than investments. But regardless of any arguments over what should be, sports teams have indeed become major assets.
“Over the last 15, 20 years, we’ve seen sports in general here in the U.S. get viewed through a lens of being more like a business,” said Courtney Brunious, who teaches sports business at the Marshall School of Business at the University of Southern California. “For the longest, sports franchises were owned by families. These were small businesses.”
Those days have faded into the past thanks to a boom in TV rights. But sports ownership also offers the wealthy something they often cannot find elsewhere: fame, and even adoration.
“It’s a different type of asset, and that’s why I call it a trophy asset,” said Kevin Kaiser, a finance professor at the Wharton School of the University of Pennsylvania. “It’s sort of like buying Pokemon cards, or Picassos.”
It follows that franchise values aren’t always rationally decided; teams often sell for more than public estimates. Just look at the Padres. Forbes pegged them to a $3.1 billion valuation this spring, some $800 million shy of their actual valuation.
“It’s scarcity,” said Henry Smokler, a partner at the law firm McDermott Will & Schulte and previously an executive at the Professional Golfers’ Association of America. “There hasn’t been a lot of expansion. There’s just more buyers, more billionaires, more demand and not an increase in supply.”
But the product has inherent value as well.
Galatioto said that, were he to wager which business is more likely to survive the next 100 years, Apple or the New York Yankees, “I’d bet on the New York Yankees.”
Sports provide “the best media-content value you can buy,” he continued, because games are watched live.
Franchise prices are also not correlated to the stock market.
“We’ve had massive market downturns, we had COVID, and these things still traded, and they traded at very attractive premiums,” Galatioto said.
Ball clubs also are not endangered by technology lifecycles or artificial intelligence. At least, not until robots are allowed in center field.
What’s the deal with private equity and baseball?
Private equity has jumped headfirst into sports, trying to get its share of the ownership boom, in baseball and otherwise.
To Kaiser of Wharton, private equity is best explained in two ways.
“Very simply, it means the ownership of the business is of a certain type,” Kaiser said. “It’s not a family ownership, it’s not a public ownership you can buy shares in. It’s not a government ownership that owns maybe a stadium. It’s an entity that takes investors’ money, puts it into a fund and then uses that money in that fund to buy stuff and own it within a private structure that you can’t access unless you’re one of those investors.”
Secondly, private equity is also an industry unto itself, just as one refers to “oil” or “semiconductors.”
The rise of PE in sports has coincided with the rise of PE across many industries, a product of broad economic forces.
“Over the past 20 years, even more, there’s been a tremendous amount of creation of wealth, or whatever you want to call it — money, at least — by the central banks around the world,” Kaiser said. “Post-global financial crisis, there’s a lot of liquidity provided into the market that had to go somewhere. It had to be invested somewhere. And then in the COVID crisis, they created trillions of dollars of additional money. It had to go somewhere.”
Sports franchises and private equity are, in some ways, an odd pairing.
Typically, PE firms pursue assets that are established, stable and highly cash generative, Kaiser said. Sports teams don’t fit that profile because many teams do not generate notable annual returns, he said.
Some PE firms do pursue long-term plays via what are known as “growth-stage” investments, but sports teams don’t fit that billing either.
“These are mature businesses,” Kaiser said. “They’re just non-cash generative businesses, so they’re really an odd duck in the private-equity portfolio.”
Almost all MLB clubs’ financial statements are private, making it difficult to independently verify whether teams are profitable on an operating basis. The conversation is further complicated by the number of revenue streams that could be included. Clubs now double as real-estate investment vehicles, turning owners into developers around the ballpark.
The Atlanta Braves — unique in MLB because they are a publicly traded, standalone entity — reported about $732 million in revenues for 2025. About $635 million was attributed to the baseball side of the house, and $97 to the real-estate side.
The Braves also reported a roughly $14 million loss in operating income for last year, but a $108 million profit as measured by adjusted operating income before depreciation and amortization, or OIBDA.
How has private equity affected franchise values?
PE firms are used to having major influence over the businesses they fund. That’s not supposed to be the case in the major U.S. sports leagues — at least, not yet.
“Private equity in the traditional sense is a control position. You’re going to own 51 percent or better,” said Clay Miller, a former NFL player who teaches finance at the University of Michigan’s Ross School. “When you look at what’s going on in private equity and professional sports, most of the leagues restrict your ownership.”
MLB allows one firm to own no more than 15 percent of a team, and multiple firms to own no more than 30 percent of a club. The league only started to allow firms’ access seven years ago.
“The leagues have circumscribed the rights that the PE firms can have,” Greenberg said. “They can’t have any role in management. They can’t sit on a board. They get information, but it’s a completely passive investment.”
One of the bigger storylines in baseball in coming years will be whether owners increase those limits. Experts anticipate they will.
“The institutional money is going to want a return, and so they’re going to continue to press in,” said Miller, who advises a franchise-value tracking project at Michigan that’s backed by Arctos, a leading PE firm in sports.
Private equity’s not the only voice pushing for profit in baseball: individual owners, of course, want to reap the rewards, too. But PE’s arrival gives those owners even more reason to push for higher valuations — to try for a cap.
Baseball is at “a crossroads,” Miller said. “It needs to get right.”
Owners will increasingly need private equity’s deep pockets to make sales happen. As the prices climb, the pool of individuals who can afford teams on their own shrinks.
“It’s a critical piece of the economic pie,” Greenberg said. “If someone is ‘worth a billion dollars,’ it doesn’t mean he has a billion dollars of liquid net worth to put in a baseball team.”
At the end of the day, private equity doesn’t like losing money. The fact that PE has turned its attention to baseball should “dramatically impact CBA negotiations,” Boras said.
“Private equity introduces a neutral and loud voice that bars subjective and biased valuations of the state of the industry,” the player agent said.
Are teams ultimately “good” investments?
There’s a long-running debate in baseball as to whether teams are actually good investments. Two questions are key: how much do annual losses matter when the team is growing in value every year? And what is the investment being compared to?
To Greenberg, it shouldn’t be too surprising that the Padres sold for more than the Mets.
“Their revenues are meaningfully higher than the Mets’, and have been for the last several years,” he said.
José E. Feliciano, the new owner of the Padres, attended the team’s recent series against the Arizona Diamondbacks in Mexico City. (Hector Vivas / Getty Images)
Cohen, the Mets’ owner, loses money on the team on an operating basis.
“It’s kind of a Catch-22,” Greenberg said. “Steve Cohen has to spend the money because everyone knows how wealthy he is, but it ensures that he’s not going to make money. And no one really cares about that, I suppose.”
But were Cohen to sell the club for a significant profit down the road, how much would it matter that he lost some money along the way?
“In any business, if you sustain losses, year-in, year-out, that’s not a sustainable business,” Galatioto said generally. “You’re relying on one person or a group of people that own the business to continually subsidize the business.”
Yet, as Cohen has unfurled a plan for an $8 billion casino project near the stadium, his ownership of the club has helped him in other ways.
Ultimately, baseball teams are not bad investments just because they don’t sell for as much as basketball teams.
In some industries, a multiple of six or seven, like MLB teams sell for, would be fantastic. Accountants would prefer more information before passing judgment.
“Not all revenues are created equal, right?” said Mike Whitmire, a CPA who cofounded FloQast, an artificial-intelligence platform for accountants, and also hosted a baseball podcast. “I would love to see (MLB teams’) statement of cash flows, that’s a big one. Is your bank account bigger this year than it was last year?”
In the long run, franchise values are expected to continue to rise.
“When you take the dynamics of the economy that drove those run up in prices, there’s no reason to think it won’t continue,” Kaiser said. “We continue to create billionaires in America.”
What does this all mean for 2027?
The greatest unknown in baseball is how much missed time, if any, owners will believe a cap to be worth.
“That’s a literal million-dollar question,” Brunious of USC said. “The risk you run with that type of work stoppage is you do irreparable harm to the game.”
Presumably, there’s a number of canceled games that owners would deem to be too many. Now, players could cave before that magic number is reached, but baseball’s history says they’re willing to take on a lengthy fight.
A lengthy stoppage, however, wouldn’t bode well for the national TV deals MLB needs to negotiate soon.
“The key to me is the impact on spectators and viewers,” said Kaiser of the University of Pennsylvania. “The risk isn’t that you don’t make money in the business, because making money in the business (year-to-year) isn’t really how these businesses work.
“If you lose fans, that damages the franchise value.”
One of the appeals of owning a sports team is brand loyalty: owners might be willing to bet their customers will return. But they’d be taking a big risk to test that theory.
Ultimately, whether games are canceled next year could reveal just how bad owners really believe their current situation to be.
“Some people are very optimistic about how the CBA is going to come out,” said the banker Galatioto. “Some people are very pessimistic. We’re not that far away from one side or the other being right.”
There’s a chance the owners decide that whatever pain canceled games might bring, it’ll be worth it.
“Franchise values have already been affected,” the banker Greenberg said. “A baseball team with $350 million of revenue hypothetically is worth plus-or-minus $2 billion. And then, an NBA team with $350 million of revenue is going to trade for $5 billion, or $4.5 billion. That impact is already there.
“I don’t think anybody wants to shut a league down or a season down. Certainly, the fans don’t. I don’t think the players do, (and) I don’t think the owners do.
“But, to get change, I think you do what you have to do.”
