By Spike Eskin
PHILADELPHIA (CBS) – Forbes magazine says that the Philadelphia Phillies are $723 million, an increase of $114 million over last year, and are now the fifth most valuable franchise in all of baseball. As impressive as that seems, it may be just the beginning.
Mike Ozanian, executive editor at Forbes magazine, says that once the Phillies current television rights deal expires in 2015, the new one could push the Phillies value to over $1 billion. “The key thing for their market and for the Phillies, and what we don’t know, is the attendance going to continue to be high, that three million mark? I’m not saying that they have to lead Major League Baseball every season, but will they be one of the top two or three teams in attendance? You don’t know that. You don’t know what the revenue for the stadium is. But yes, if they continue to be at the top of major league baseball in attendance, and their television ratings continue to be high, then I expect their next TV deal to be a blockbuster. And let’s not forget that the Phillies used to own a stake in the local sports TV network,” he told 94WIP’s Angelo Cataldi and The Morning Team on Friday. There are currently three teams worth over $1 billion, the Yankees, Dodgers and Red Sox.
Local television rights have become a major source of increased income for MLB teams. “If you look at teams like the Astros and the Texas Rangers that have signed $3 billion, 20 year deals, the Angels, $2.5 billion for 17 years, they’re all going to be starting in the next year or two, all baseball teams. Because advertisers are really going after the local broadcasting rights because it’s one of the few areas of programming that doesn’t get taped, pre-recorded, so they know that people are going to watch most of the commercials,” he said. “If you look at DVR penetration in households with TVs, over the last five years, it’s increased from under 15 percent to over 40 percent.”
It’s not just major market teams like the Phillies who stand to make major increases in television revenue either. “You’re talking about rights fees that had been increasing, you know, five percent a year, seven or eight percent for some teams. The increases over the past year or so have been staggering. You’re talking about teams like the Astros whose rights fees are going to more than triple,” Ozanian said. “So you can imagine what it will do for a team like the Phillies, that is contending, always has a chance to win the World Series.”
The Phillies were actually in the red in terms of operating revenue in 2011 by about $11 million. That is in part due to their high payroll, Ozanian said.