Are The Los Angeles Dodgers Really Worth $1.2 Billion?

Los Angeles Dodgers

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In the latest twist in the ongoing saga of Frank McCourt and his ownership of the Los Angeles Dodgers, Bill Burke may have offered to buy the team for $1.2 billion.But according to the report in the LA Times, there is scepticism within Major League Baseball as to whether the offer is legitimate or if it is just a ploy by McCourt to keep the US Bankruptcy Court from forcing a sale.

The scepticism is likely based on the size of the offer. At $1.2 billion, the price would be a record in baseball, and would far exceed the 2009 purchase of the Chicago Cubs for $845 million., in their annual valuations of Major League Baseball franchises, listed the Dodgers as the third most valuable team at $800 million, trailing only the Yankees ($1.7 billion) and the Red Sox ($912 million).

Of course, a team’s true valuation has little to do with what says, and everything to do with whatever somebody is willing to spend. For comparison, valued the Cubs at just $700 million back in 2009, just before the sale of that team.

Still, a $1.2 billion sale would surpass the valuation of the Dodgers by 50 per cent, while the Cubs valuation was only off by 21 per cent.

One factor that could be inflating the sale price, is the apparent inclusion of “all real estate related to the team.” However, the LA Times report says McCourt may be able to keep Dodger Stadium and the associated parking lots in this deal.

Since 2005, nine MLB franchises have been sold. Here is a look at how much each of those teams cost* and what those values are corrected for inflation. As we can see, the proposed Dodgers’ offer is far-and-away from the rest of the group…

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* In some cases, only a majority of the team was sold, or may have included a transfer of debt. In these cases, the full value of the franchise is extrapolated from those costs.