Forbes tabs Pittsburgh PIrates as 17th most valuable club


Major League Baseball is booming and the Pittsburgh Pirates are growing right along with it.  In releasing their annual MLB Valuation List, Forbes ranked the Pittsburgh Pirates as the number 17 most valuable franchise.

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Forbes uses enterprise values to determine the numbers, which means “equity plus net debt based on the revenue multiples of past transactions.”  We will never claim to be accountants, but the numbers are the numbers.  Bob Nutting knows business.  The revenues are increasing in Pittsburgh.  Those revenues include tickets, which took years for the Pirates to raise prices to a more competitive level.  The revenues also include media, concessions and merchandise.  All of those have gained a hefty spike in recent years.  The Pirates TV deal took a nice spike thanks to a much debated and sworn-to-secrecy-deal Frank Coonelly struck with ROOT Sports.

While the Pirates will never, ever, be able to compete with the large markets in mega tv deals, there is a bit of hope.  Everyone’s favorite team, the St. Louis Cardinals are not located in a big market, but are worth $1.4 billion.  Winning in 16 of 19 seasons and appearing in four World Series while winning twice has made the little engine that could steamroll its way up the Forbes rankings.  Additionally, the Pirates ranked third-best this year in spending the least amount of money per win, coming in at having spent $887,633 per win in 2014, as per Sporting Charts  We previously have reported on this number back in 2012.  In 2012, the Pirates spent $693,019 per win.  This modest increase could just show that the Pirates are building responsibly.

The Forbes numbers are always debated, but there is no denying that baseball is big business.  And Bob Nutting knows business.  It’s tremendous to see the Pirates winning again.  It’s also good that Nutting is growing the value of his asset.

Nutting has invested heavily as he attempts to catch up with the rest of the baseball world.  A much needed new academy has been built.  This year we saw a new clubhouse in Bradenton to go with years of investment in McKechnie Field.  Nutting has spent money, it’s just not always been on the 25 man roster.  The assets have been upgraded outside of Pittsburgh.

The Pirates ranked third-best this year in spending the least amount of money per win, coming in at having spent $887,633 per win in 2014

It would be wise for the so called ‘PNC Park of the Future’ to be more about the players and the fans.  And not just those fans that love all of the new bars that have been added recently to PNC.   Money could be invested in sponsorship opportunities for corporations as we have seen in San Francisco.  But at the same time it’s necessary to help those fans that have to visit the bathroom as well.  It’s something so simple, but when PNC Park is packed, the weakness shines through.  Perhaps it’s all the new bars and great craft beer selection?

Other areas stand out as well.  The wifi has sucked for years, the antique scoreboard, and the general facilities which would allow for families to enjoy PNC Park more need help.  Sorry, that 1994 Magnavox TV by the right field gate just didn’t cut it in 2015 Mr. Nutting.

But face it.  The real way for a franchise to spike in value is winning.  The Pirates are now winners.  The Pirates are contenders once again.

As you know, players make that happen, just as we all saw in Pittsburgh.  Players and their families could use something as simple as more parking. Happy wife. Happy player.  Happy players are more relaxed and one would think could produce more on the field.  That leads to wins, more ticket sales and a very happy owner.

Just look at the value increase of the San Francisco Giants as proof.    The Giants won the World Series and doubled in value.  The sponsor revenue has skyrocketed.

If the Pirates can do what Buster Olney says they can do, the Pirates are going to be a lot higher than 17 next year at this time.  And that will mean a great deal for Bob Nutting, but even more for the city of Pittsburgh.

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