Every year, there’s a little game that is played involving Forbes Magazine, business writers like myself, and executives from Major League Baseball. It usually goes like this:
Step One: Forbes comes out with its annual valuation rankings of all teams.
Step Two: Business writers ask team and league officials if the figures and rankings are accurate and if they care to comment.
Step Three: Executives issue statements saying that Forbes is either way off base or questioning their methodology and reporting.
So keep that in mind when I report that Forbes today said the Washington Nationals are now worth $406 million, down from $460 million, or a 12 percent decline from last year. The team is ranked 14th among all clubs in Major League Baseball. You can read the full rankings with analysis here: www.forbes.com/mlb.
Forbes says the following about the Nationals:
“The owners of the Washington Nationals have badly botched the job thus far of trying to successfully bring Major League Baseball to the nation’s capital for the third time. Blame the Lerner family, who bought the team in 2006 for $450 million and dominate the ownership group. Managing Principal Owner Theodore Lerner and the four other family members who are principal owners furnish one of the league’s lowest payrolls despite a new, taxpayer financed stadium. The Nationals lost 102 games last year, the most in the majors. The team’s goodwill is also evaporating as GM Jim Bowden resigned in March amidst a federal investigation involving the skimming of signing bonuses given to Latin prospects and a scandal involving the team signing a player who lied about his age.”
I am expecting to speak with Nationals President Stan Kasten later, but I can tell you that just a few weeks ago he railed against Forbes and similar publications with similar rankings after I had asked his thoughts on the latest numbers from Team Marketing Report.
“I have a problem with their methodology, because I don’t know whether they are using their right hand or their left hand to throw the dart,” he said at the time.
In other words, he doesn’t put a lot of stock in these things and doesn’t pay a whole lot of attention to them.
I personally never know what to make of the Forbes rankings. Sports teams are private entities…their revenue figures are not generally public, so to come up with these numbers requires a lot of educated guessing based on information supplied by sources in the investment banking and sponsorship arenas, among other places. I’m sure the folks at Forbes are very smart people and great reporters. But it’s not an exact science. I tend to treat the rankings as something that’s nice to read, but I have no idea how accurate the numbers really are. All I know is that team and league executives often shoot them down, so it’s hard for me to treat them as Gospel.
UPDATE: I spoke to Stan Kasten, who declined to comment on the record about the Forbes valuations. Though it’s safe to say he did not back off his past criticism of them.