Here’s why Cincinnati Reds franchise value tops 10 teams
The Cincinnati Reds franchise is valued higher than 10 other Major League Baseball teams, according to a new estimate.
It might not seem significant at first blush that the Reds’ $1.4 billion valuation, as estimated by digital sports business publication Sportico, places it 20th among MLB’s 30 teams.
But that’s well above where the Reds would normally rank based on market size. And it easily tops the franchise’s ranking last year by Forbes as the 27th most valuable MLB franchise. Forbes’ rankings are more established and use slightly different methodology. The biggest difference is Sportico, which began doing sports team valuation estimates last year to rival Forbes as the industry leader in that category, includes team-related businesses and real estate.
The Reds team is valued at $1.325 million, Sportico estimates. It places the Reds’ additional holdings in other businesses and real estate at $75 million.
That estimate tops teams in much larger markets such as the Colorado Rockies, Detroit Tigers, Arizona Diamondbacks, Miami Marlins and Tampa Bay Rays. It also tops several small-market teams, including the Cleveland Indians, Milwaukee Brewers, Pittsburgh Pirates and Kansas City Royals. You can see each team’s valuation here.
But the Reds also benefit from strong management and a winning strategy by owner Bob Castellini and his son, president and COO Phil Castellini, Peter Schwartz, Sportico’s senior sports valuations and legal reporter, told me. They’ve been able to wring growing revenue out of Great American Ball Park, which is now 19 years old.
“What the Reds have done is maintain successfully the ability to generate revenue at the local level,” Schwartz said. “The Reds have been able to sell tickets, premium seats, sponsorships and advertising at a level that exceeds many newer ballparks. To me, that’s the litmus test. They’re harnessing the ballpark in some good ways.”
The Reds generated $263 million in 2019 revenue and $97 million last year in a shortened 60-game season, Sportico found.
“That’s good, considering their market size,” Schwartz said.
Reds ownership has done well for itself over the years. Bob Castellini led an ownership group that bought the Reds in 2006 for $270 million.
Sportico doesn’t have comparable valuations from a year ago because this is the first year it has done MLB valuations. Forbes estimated the Reds value at $1.075 billion last year.
The New York Yankees are the most valuable MLB franchise, at $6.8 billion. The Boston Red Sox are second at $4.8 billion.