That RoR comparison also ignores cash flow generated by the MLB team; they are not money-losing operations. I believe that 10% stock market return includes dividends. So even without accounting for the idea that MLB owners likely really enjoy owning their teams way more than they would enjoy putting that money into the stock market, owning an MLB team is very likely a better pure investment than the stock market. Stance as a fan on a salary cap probably depends on which team you root for; most fans probably want a cap because they don’t root for the 4-5 teams who would actually be restricted. Fans who just generally enjoy baseball likely want a cap, but that’s probably a minority. As an Astros fan I want a cap that only impacts teams that spend more than Houston does.
Owners put up a ton of money to own teams and buy them from the previous owner. I'm not saying owning an MLB team is a money losing operation. I'd guess owning professional sports teams are a better investment in general then a lot of things, but it requires a ton more work (and initial investment) than just investing in the S&P. For the most part, I'd say the owners of small market teams are making chump change relative to the players and the large market owners. Granted, that is a lot of chump change. The purpose of MLB is to make the owners money.
I think there’s a huge emotional appeal aspect to owning a major league sports team. Not just an ego thing of being “in the club” but also something to feed a competitive drive. I also think major league sports teams represent an opportunity to diversify their wealth. So there are things other than the financial performance that drive the value. But I agree that the owners are in it, at least partially and probably even primarily, to make money.
We can have a fairly good idea of how profitable it is to own a small market baseball team by looking at what they sell for. While small market teams get less at the gate, concessions and in television deals - they get $100,000,000 a year from revenue sharing. $100,000,000 a year is a lot of money -- couple that with ticket sales, etc. and they can do solid. The Twins for example were bought for under 50 million dollars and they were going to be sold for about 1.5 billion. I do think that MLB has not done enough to market their game -- it does well in cities that are huge and have traditionally won, but it is a game that could do extremely well in mid-sized and smaller cities, but it has given up a lot of that blue collar market to football.
Nothing in that article contradicts anything I said. The only valuation stats it really offers are 1-yr changes, which are irrelevant over the longer time horizons between baseball teams buying and selling. Try again. This was the exactly the point - in order to make them good investments, they need to generate annual profits - which is what the owners argue. Without that, they are the S&P except completely illiquid (which makes them much worse investments since you can't access your value at will). To make things worse for you, the article you posted (and hopefully read?) says the exact opposite of what you just claimed: Baseball is also staring down a difficult labor negotiation. Team owners are expected to demand some form of a salary-cap system when their collective bargaining agreement with the players’ union expires in December, and a lockout is considered “almost guaranteed,” in the words of the MLB Players Association’s interim executive director. (Under the current model—which doesn’t cap player payrolls but imposes a competitive balance tax on big spenders, alongside the league’s revenue-sharing requirements—12 teams operated at a loss in 2025, according to Forbes estimates, relative to two in the NBA and zero in the NFL and the NHL in the most recent season with available data.)
Again, you have to look at timeframe. That $44MM was in 1984 - 42 years ago. That is a 9% annual rate of return to get to $1.5 billion today. The S&P 500 on Jan 1, 1984 was at 165.34. Today it is 7400. That $44MM in 1984 would be worth $1.9 billion today if invested in the S&P 500. Plus you'd have had liquidity for the past 42 years. These franchises have to turn annual profits to make them good investments.
CAGR is just an impossible concept for some. Every time I hear my aunt brag about selling her house for almost three times what she bought it, I want to scream. She bought it almost 40 years ago … I don’t feel like doing the math, but off the top of my head that is around 3% return and almost certainly less than inflation and an order of magnitude less than she’d have gotten in the S&P.
