Interactively Graphing Forbes’ Team Values

by
March 26, 2015

Yesterday, Forbes released its franchise values for all 30 Major League Baseball teams. Briefly, the team values are estimates of the price that the franchise is likely to sell if the team’s management group began fielding offers. There are always debates about the accuracy of revenue and valuation figures, and I would recommend reading one of the many FanGraphs articles that already has examined the methods and discrepancies in both Forbes and Bloomberg’s valuation metrics.

In this post, I want to provide some graphical context for Forbes’ data and allow you to explore the data in a different way than on a table.

Being a financial news outlet, the team value is the heart of the Forbes’ data. The graphic below shows that data as a simple bar graph. From this, there are four different tiers of teams. There’s a small-market plateau that constitutes the lower half of MLB teams. These teams are valued under $1 billion and come from smaller cities (except Toronto and Houston). The next tier has larger metropolitan areas or teams that are the secondary team in the largest markets (White Sox, Angels, Mets). The third tier is composed of ‘big market’ teams that come from the largest US cities. Finally, the Yankees are in a tier by themselves.

2015 Forbes Team Value

Using the revenue data, I created an interactive graphic to explore the relationship between the relationship between payroll and revenue. This the payroll to revenue ratio is the basis of fan angst demanding that ownership spend more. Payroll estimates constantly change as the Opening Day rosters are established, so I’ve used a blend of estimates from FanGraph’s data set and Cot’s Contracts for the payroll data; I took the maximum of the two numbers to try to account for players added to the 25-man roster.

The scatter plot at the bottom of the data visualization demonstrates the relationships between payroll and the Forbes data in a more traditional view. Aside from the obvious outliers of the Dodgers and Yankees, the Cubs stood out comparing the two plots. The Cubs have a much higher valuation than their revenue would suggest; they break away from a cluster of teams when you compare the revenue plot to the team value plot.

This data visualization is INTERACTIVE; you are able to sort the teams by payroll, revenue, and a ratio of payroll to revenue with a drop down menu. All the data points have extra data mapped to their tooltips, which appear when you hoover your mouse over the different data elements (or tap them on mobile).





 

I build things here.

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Kenny
9 years ago

St. Louis is not a larger metropolitan area, not even remotely. Literally every other valuation can be accounted for through the rough schema presented here, with the other two exceptions noted, Toronto and Houston, easily explained. There must be a good explanation for St. Louis, and I don’t know what it is. Is it that sustained success has kept the attention on baseball, when that attention has flagged in other places of the same size? Is it that the lack of competing basketball and hockey, combined with the lack of a college sports power in the area, means less competition for baseball dollars? Is it something about the management treatment of fans that has kept them loyal? Why are the Cardinals so unusually successful as a franchise?

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Philo
9 years ago
Reply to  Kenny

St Louis has an absolutely HUGE regional draw. I live in Springfield Il, so mroe or less 100 miles away, and this city is about evenly split Cardinals/Cubs. It is the same in Bloomington and Champaign (the other larger regional areas in Central Illinois). Additionally, travel to St.Louis, and to the Stadium itself) is mostly painless outside of rush hour. It is the same In Missouri. The Stadium is directly off where multiple major Interstates converge. Basically, while the city is comparatively small, the region has a large population, transportation from outlying regions is not that big a hassle, and they have a rabid fan base.

Additionally, Unlike in nearly every other major city, Football is the also ran within the city itself.

2
Kenny
9 years ago
Reply to  Philo

The same can be said about nearly any MLB franchise – only Phoenix and Denver are genuinely isolated among MLB cities, and arguably Baltimore is hemmed in by its proximity to Philadelphia and Washington DC, but after that: Milwaukee has Madison to its west and an entire state to draw from; Minneapolis draws from population density in Minnesota and Iowa; Indianapolis feeds to both the White Sox and the Reds, who also get half of Columbus, Louisville, Lexington and most of Kentucky. Seattle gets all of western Washington and Oregon, including Portland. Boston gets all of New England. Atlanta is as regional a team as they come, as I know from when I lived in Knoxville, three hours away. There is nothing special about St. Louis.

In fact, the most important and conspicuous case of people not counting outlying areas when speaking of potential fan bases is Northern California, where Sacramento – an area with a population larger than five MLB cities – is (depending on where exactly you live) within an hour of the Oakland Coliseum and barely an hour to AT&T Park. This (not to mention Santa Cruz/Monterey, Modesto, Stockton and Fresno) is why the claim that Northern California can’t support two teams is absurd, and why explanations for the A’s failure to draw requires something deeper than population numbers.

The point is that St. Louis is an outlier. Of course St. Louis draws from it’s periphery – so do most teams. Why does St. Louis draw better, from its center and from its periphery?

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Jperb
9 years ago
Reply to  Kenny

Point on Northern California very well taken here from Sacramento’s 2.5m metropolis, but as a technical note (this is fangraphs after all), I have no idea how fast you would have to drive (over other cars, no less) to get to a game at AT&T Park (or the Coliseum) in “barely an hour” from Sacramento. It’s at least an hour-twenty even at 4am, 2+ hours by train, and regularly 3+ hours in normal SF Bay Area day traffic.

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Kenny
9 years ago
Reply to  Kenny

Jperb: Sorry for the exaggeration on Sacramento, but it is all about where you start counting: I personally have driven from Davis to the west side of the Bay Bridge in 60 minutes on a Saturday morning (a time I could have been driving to a baseball game) in the last month. I know, Davis is 12 miles west of downtown Sacramento, and from the west side of the Bay Bridge into an AT&T parking lot is the slowest one mile any of us will ever drive (not that this is terribly different from any other downtown stadium, of course). So that makes 90 minutes downtown Sacto to AT&T door to door if you’re not fighting rush hour traffic; two hours if you are.

Of course, I’m an A’s fan, and direct Amtrak alone is the reason you Sacto folks should be preferring Oakland.

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Miguel
9 years ago
Reply to  Kenny

To add to Philo:

STL’s blackout region includes OK, AR, MO (except KC metro), IL (except Chicago metro), Memphis metro, SW IN, and W KY. Back of the envelope that’s just about 16M. That’s more than the Red Sox blackout region, which is at 14.5M. That doesn’t nearly tell the whole story — STL metro is 2.9M to Great Boston’s 4.6, and it’s 7+ hours from OKC to STL and 3.5 from Bangor to Boston — but it adds some color.

By way of comparison, CLE, a quintessential small market team, has an area that includes 9M in their home state, the 1.25M between Erie and Buffalo metro areas, and ~.5M in E KY/W WV.

3
Miguel
9 years ago
Reply to  Miguel

Greater* Boston. Though it is a pleasant town.

2
Carson's Johnny
9 years ago
Reply to  Kenny

There is a hockey team in St. Louis, they are the Blues an are in 1st right now.

3