In Sportico’s recently released 2021 Major League Baseball team valuation report, no franchise’s total value came in higher than that of the New York Yankees, at $6.75 billion. New York’s National League club, the Mets, checked in with the league’s sixth-highest valuation ($2.48 billion). It’s no surprise that the Yankees are more valuable; the Mets have been a clear No. 2 within the market for a generation. But the size of the gap is staggering, and it “seems to be growing,” Sportico’s valuation expert Kurt Badenhausen said. Or, at least it was growing. With the Mets now under Steve Cohen’s control, the expectation is that the club will narrow the differential. The question then becomes: Can the franchise get to a point where it surpasses the Yankees?
Our Take: The Yankees and Mets play in the same market and both have modern venues. So, the difference in total values boils down to the intellectual property each franchise holds. “It’s really about what the Yankees mean with the N.Y. [logo] or the Uncle Sam hat with the bat, versus what the Mets mean. Being the major-domo in a market is worth a lot,” Sportico’s Peter Schwartz explained. Still, to be clear, the Yankees have generated significantly more revenue from their new stadium than the Mets have.
Being the most prominent franchise in the New York market contributes to the valuation gap the Yankees maintain over the Mets, but that status also has a tangible effect on the teams’ finances. “The Yankees can charge more for sponsorships, as well as for seats and suites,” Badenhausen said.
Cohen officially became the Mets owner in late-October (following the 2020 season). So, it’s far too soon to determine just how much or how quickly baseball’s wealthiest owner will be able to narrow the divide. But Badenhausen said he “100 percent” expects the Mets to shrink the gap. “There seems to be so much potential in terms of [the franchise] generating money. Is their sponsorship revenue going to catch up to the Yankees? No, but it shouldn’t be 30 cents on the dollar. The gap is [currently] much bigger than it should be. There’s [also] no reason [Citi Field] shouldn’t be filled with a good baseball team.” The Mets drew more than 4 million fans in 2008, their last year at Shea Stadium. Just 2.4 million fans walked through the gate in 2019.
Considering the existing $4 billion-plus gap, it may be hard to envision the Mets surpassing the Yankees in total franchise value. But Badenhausen insists the Queens-based club could transform itself into the more valuable one over time. “There are no absolutes that the Yankees will always dominate New York,” he said. Of course, that doesn’t mean one should expect it to happen quickly, either. “It’s not a one, two or five-year phenomenon. For the Mets to become a bigger brand than the Yankees, it is at least a 15- or 20-year process,” Badenhausen noted. Building a consistent winner, one with a team full of star players—players that resonate beyond New York City (think: Francisco Lindor) will aid Cohen in his efforts to achieve that goal.
The great divide between the dominant MLB team in a market and the second club isn’t just a New York phenomenon. “If you look at Los Angeles (Dodgers $4.62B, Angels $2.46B), Chicago (Cubs $4.14B, White Sox $1.65B) and the Bay Area (Giants $3.49B, A’s $1.28B), the gaps are enormous in each of them,” Schwartz said. While there is an opportunity for the Mets to play catch-up, both Badenhausen and Schwartz indicated the A’s, with a winning team and a new stadium, would have the best chance of the four challenger franchises to overtake their cross-town counterpart. The duo thought the White Sox have the steepest hill to climb. The love affair between Chicago and the Cubs creates a different dynamic in that market than we see in the other three. “The White Sox have also not maximized any of their revenues or any aspects of their business in the way other major market teams have,” Schwartz added.
The valuation disparities between clubs within the same market is greater in baseball than we see in football. In the NFL, national revenues comprise a greater portion of team revenues, so “there is less of an opportunity to create a gap,” Schwartz explained. As for the NBA, the Knicks ($5.42 billion) and Lakers ($5.14 billion) have valuations at least $2 billion north of the Nets ($3.4 billion) and Clippers ($2.63 billion), respectively—on par with the gaps we see in MLB (outside of the Yankees/Mets). Sportico has yet to publish its NHL valuations.