The Giants are 8% more valuable today than they were a year ago

It’s the Forbes valuation article time of the year and the Giants are better off now than they were in 2017. They passed the Red Sox to become the #4 most valuable team in Major League Baseball, a stunning feat when you consider last year’s performance. Indeed, it’s clear that baseball teams can be very successful no matter what their record when you look at the fact that the Giants actually gained 8% in value compared to 2016. All these years, we thought the championships were priceless, but we were wrong. They were worth $2.85 billion.

To me, this development has been inevitable. The Giants moved to AT&T Park with the intention of reaching the top of Baseball’s Wealth Mountain. They’re, effectively, the 4th face on Mt. Cashmore now and they’re unlikely to fall off it anytime soon. This is potentially great news for fans because it means the Giants are going to do whatever it takes to keep your business (garlic tater tots were just the beginning. I’m thinking we’re going to get an orange & black iPhone 11 giveaway next).

The way Forbes calculates value is different from how I imagine the Giants and outside investors value baseball franchises, as the article states that it excludes real estate holdings and regional sports networks. The property around China Basin owned by San Francisco Giants LLC has tremendous value. Despite its exclusion from the calculation, the Giants are still in the top 5, which speaks directly to the quality and efficiency of its management since the 1993 sale.

Some other interesting points from the article: approximately $425 million of each team’s value comes from the combined ownership stakes in MLB Network, the league’s investment portfolio, and MLB Advanced Media (MLBAM), which is the technology platform that gave us MLB.tv and pretty much revolutionized video streaming.

The league’s stake in MLBAM (now BAMTech) dropped to 15% last year after selling its majority stake to Disney (for approximately $1.6 billion), which intends to use it to launch their new Disney streaming outlet that will rival Netflix. For a sport invented before there was in-home electricity and frequently celebrates its past while terribly promoting its present and future, Major League Baseball’s primary innovation this century became a key “figure” of the Information Age. And all any of the owners did to reap the unlimited rewards from this innovation was each dump $1 million into a central fund.

And the bit about the investment portfolio was another interesting tidbit that I think I knew but had forgotten about: after MLB sold the jointly-controlled Expos, the profits of that sale were parked in an account of which all 30 teams have an equal share. Proceeds from revenue sharing also go into this investment portfolio. So much passive income.

All of this to say that MLB became extraordinarily wealthy because it spent money. The Giants, likewise, have positioned themselves into a crown jewel franchise because they spent money to improve their holdings. It’s important to keep this in mind the next time there’s a contract negotiation (::cough:: Madison Bumgarner ::cough::)... or a spending bill that includes minor league baseball players for some reason.

Congratulations to the Giants for being really, really good at making money.