There's a Gold Rush in Pro Sports—and Baseball Is Lagging Behind

Hindustan Times

10-07-2025

When the Minnesota Twins were put up for sale last year, their owners had every reason to believe that it wouldn't be long before the right billionaire offered them a fortune.
Only a handful of Major League Baseball franchises had changed hands in the previous decade, and that included the record-setting $2.4 billion purchase of the New York Mets by hedge-fund titan Steve Cohen. It seemed as if the Twins were hitting the market at just the right time.
But nine months and at least one scuttled deal later, they still don't have a buyer.
The saga of the Twins has underscored a disconcerting reality for the baseball business. While professional sports teams in other American leagues are selling for increasingly astronomical numbers, the game known as the national pastime has largely missed out on the bonanza.
'It's no secret that we've lagged behind the other sports,' Atlanta Braves chairman Terry McGuirk said at a June investor event. Baseball teams are typically valued at four to nine times expected revenues, McGuirk said, while NBA teams go for multiples of 10 to 15.
Deep-pocketed clubs like the Los Angeles Dodgers and New York Yankees are still immensely valuable, with some estimates putting them between $7 and $9 billion, above many NFL teams. For everyone else, however, the situation is far less rosy. The Baltimore Orioles, the most recent team to change hands, went for $1.725 billion to Carlyle co-founder David Rubenstein. The Kansas City Royals sold for $1 billion in 2019 to local businessman John Sherman.
While the recent $10 billion deal inked for the NBA's Los Angeles Lakers and the $6 billion deal for NFL's Washington Commanders in 2023 set records, valuations have also been healthy for smaller-market teams in those leagues. The Charlotte Hornets went for $3 billion in 2023. The Denver Broncos sold for $4.65 billion in 2022. Even the NHL's Tampa Bay Lightning sold for $1.8 billion last fall—slightly above the price that the owners of the Tampa Bay Rays MLB team are currently negotiating.
In response, MLB commissioner Rob Manfred two years ago formed a six-member 'economic reform' committee. Its mission is to address the issue of lagging franchise valuations.
'Where are we? Why are we where we are?' Manfred said at the Braves investor event. 'And what can we do to fix our situation?
That last part won't necessarily be an easy task. Two major characteristics set MLB's business model apart from the rest of North American sports: Baseball has traditionally been far more reliant than the other leagues on local television deals to drive revenue. It is also the only major sport that lacks any form of salary cap.
Taken together, those factors make it difficult to predict a franchise's earning potential or reliably forecast expenses, spooking some potential buyers.
The NFL and NBA derive much of their revenue from lucrative national TV deals split evenly among teams. In baseball, teams generate about 25% of their revenue on average from deals they strike themselves with local regional sports networks. The system means teams in bigger TV markets can command significantly higher fees, giving them resources to attract and retain star players.
On the national-rights front, ESPN in February exercised a clause to opt out of the final three years of its $550 million-a-year contract with MLB at the end of the 2025 season.
Meanwhile, many owners believe the lack of a salary cap has resulted in a growing competitive and economic imbalance between the big-market teams and their small-market counterparts. The Dodgers are spending a half-billion dollars on their roster between payroll and luxury tax payments. The Miami Marlins, meanwhile, have a payroll of around $67 million. (Perhaps not surprisingly, the Dodgers are World Series favorites this season, while the Marlins have a record below .500.)
'We don't have the kind of cost certainty, predictability and competitive balance mechanisms in our player comp system that the three other major professional sports have,' Manfred said at the Braves investor event. 'That's just a fact.'
That may be about to change. Baseball owners could try to introduce a salary cap and floor after the current collective bargaining agreement ends next year. Manfred also says he wants to centralize baseball's media rights, moving teams away from their current reliance on local TV deals in favor of a more national approach.
A view of Target Field prior to a July 4 game between the Minnesota Twins and the Tampa Bay Rays.
His ability to accomplish either feat is far from certain. Pooling media rights would require wealthy teams to share more revenue than they do now. A salary cap has long been seen as a third rail by the players' union, and a serious push for one would almost certainly result in a prolonged work stoppage. The last time baseball's owners made a serious attempt, it resulted in the player strike that canceled the 1994 World Series and badly damaged the sport.
As for the Twins, they appeared close to finding a buyer earlier this year when private-equity billionaire Justin Ishbia expressed interest. He abandoned his pursuit of the team in February and last month struck an agreement to eventually take control of the big-market Chicago White Sox.
'Aggregating media rights and creating a better product doesn't just improve outcomes for owners,' said Zachary Pack, head of sports advisory at merchant bank BDT & MSD, whose co-CEO Byron Trott represented the White Sox in its recent sale process. 'It also benefits fans and players.'
Write to Jared Diamond at [e-mail] and Miriam Gottfried at [e-mail]