The Economics of Major League Baseball

From 2012 to 2024, MLB’s gross revenue surged from $7.5 billion to a record $12.1 billion—a 61.3% increase—despite a temporary disruption during the COVID-19 pandemic. 

Revenues dipped in 2020 and 2021 due to shortened seasons and limited attendance, but the league rebounded quickly. By 2022, revenues had climbed back to $10.9 billion and continued rising. According to Forbes, growth has been fueled by lucrative national media deals, expanding digital content strategies, and strong gate receipts. 

MLB’s financial trajectory reflects not only the sport’s enduring popularity but also its ability to adapt and thrive in a shifting economic and media landscape.

MLB Franchise Valuations: A Magnet for Long-Term Investment

Major League Baseball (MLB) has shown resilient and consistent growth in average franchise valuations over the past two decades, positioning itself as a stronghold for long-term investors. As of 2023, the average MLB franchise is valued at approximately $2.64 billion—up from $431 million in 2007—representing a compound annual growth rate (CAGR) of 11.09%. This performance is comparable to the NFL (11.03%) and trails only the NBA (16.11%). 

MLB’s success is anchored in strong regional fan bases, enduring media rights deals, and a 162-game season that maximizes revenue opportunities. Additionally, MLB leads all North American leagues in private equity involvement, with 10 of its teams backed by institutional investors, reflecting the sport's investment stability and regulatory openness.

MLB vs. the S&P 500: Outpacing Public Markets

When comparing MLB franchise value appreciation to traditional equities, the league has consistently outperformed. From 2007 to 2023, MLB franchises saw a total growth of 537.82%, significantly surpassing the S&P 500’s 403.81% over the same period. This 33.2% differential illustrates the strength of sports franchises as an alternative asset, particularly in times of market volatility. Unlike equities, MLB team valuations are buoyed by scarce supply, local media rights, and deep-rooted community support, which insulate them from short-term economic fluctuations. The long-term return profile of MLB investments, with their blend of capital appreciation and operational cash flow, continues to attract sophisticated investors seeking diversification outside of traditional financial markets.

RASFI and MLB: Validating Sports Franchises as a Premium Asset Class

The long-term investment case for sports franchises—MLB included—is further strengthened by the Ross-Arctos Sports Franchise Index (RASFI), developed by the University of Michigan Ross School of Business. 

This index tracks the valuation growth of sports franchises across major leagues and reflects the asset class’s exceptional historical performance. Since 1964, RASFI has demonstrated exponential gains, with a particularly sharp surge over the last two decades as institutional investment and media monetization accelerated.

RASFI’s strong upward trajectory confirms that franchises like those in MLB are more than symbolic assets—they are financial engines. Importantly, RASFI has consistently offered attractive returns with comparatively low volatility, making it a standout among both traditional and alternative investments. 

In the risk/return landscape (chart above), RASFI delivers an annualized return near 12% while maintaining a risk profile better than equities, venture capital, or even the broader live entertainment sector.

This risk-adjusted strength places MLB franchises in the rare category of assets that combine resilience, appreciation, and consistent returns—critical traits for investors seeking stability amid economic uncertainty.

Private Equity in MLB: The Most Open Market in U.S. Pro Sports

Among major U.S. sports leagues, Major League Baseball (MLB) stands out as the most private equity-friendly. With 10 PE-backed and 8 PE-affiliated teams, 60% of MLB franchises have some form of private equity involvement—more than any other league. 

This trend reflects MLB’s proactive regulatory approach and its recognition of the operational value and capital that institutional investors bring. Unlike the NFL, which only recently permitted limited PE investment, MLB has long embraced external funding, using it to enhance franchise valuations, expand infrastructure, and modernize operations.

In terms of absolute numbers, MLB leads with the most PE-backed teams (10), followed closely by the NBA and MLS. The NFL, by contrast, remains the most restrictive, with only 2 teams backed by private equity and 75% with no PE involvement at all. This reinforces MLB’s position as the go-to league for investors seeking exposure to the U.S. sports franchise market.

The openness of MLB to private equity not only reflects confidence in its financial model but also provides a pathway for sustainable growth and enhanced competitiveness in a crowded sports entertainment landscape.

Team Revenue and Franchise Values: A Telling Snapshot

The economic foundations of Major League Baseball are largely rooted in two areas: team-level revenues and long-term franchise valuations. In 2024, the New York Yankees lead the league with a franchise valuation of $7.55 billion and annual revenue of $728 million—trailing only the Los Angeles Dodgers in income, who earned $752 million but rank second in valuation at $5.45 billion. High-profile teams like the Chicago Cubs ($4.23 billion), Boston Red Sox ($4.5 billion), and San Francisco Giants ($3.8 billion) showcase the strong financial health of legacy franchises in large markets.

Even mid-tier clubs such as the Philadelphia Phillies and Atlanta Braves, each earning just above $500 million in annual revenue, command valuations approaching or exceeding $3 billion. Notably, the San Diego Padres, with the lowest revenue among the top ten at $432 million, still boast a $1.78 billion valuation.

This wide gap between income and valuation highlights the unique investment profile of MLB teams. Long-term capital appreciation, real estate holdings, brand value, and media potential all play critical roles in shaping these valuations—elements that traditional earnings multiples can’t capture.

The Media Play: Navigating the Future of MLB Broadcasting

As media consumption habits evolve, Major League Baseball finds itself at a strategic crossroads. Media rights account for nearly 25% of team revenue, yet the collapse of the traditional Regional Sports Network (RSN) model has left MLB scrambling to reinvent its distribution strategy. 

While franchises continue to grow in valuation, the sustainability of that growth is increasingly tied to how successfully the league manages this media transition.

Currently, MLB’s national media revenue is heavily concentrated among a few players—Fox ($723M), Turner ($527M), and ESPN ($502M)—with newer entrants like Apple and Roku contributing marginally. However, streaming revenue has not yet matched the scale of cable deals, creating a gap between fan “reach” and financial return.

Looking ahead to 2028, when major national contracts expire, Commissioner Rob Manfred aims to pivot to a centralized, streaming-first distribution model. This bold move could eliminate blackouts and restructure local game access, possibly attracting major tech platforms like Apple, Amazon, and YouTube. Yet this plan carries risk, especially given MLB’s aging fan base and the reluctance of some teams to abandon the RSN model.

Still, progress is being made. As of 2024, 27 of 30 MLB teams have secured direct-to-consumer (DTC) streaming options, offering fans new ways to engage with their teams—albeit at a cost. The road to 2028 is pivotal. If MLB successfully restructures its media footprint, it may solidify a sustainable path forward; if not, it risks undermining one of its core revenue pillars.

Conclusion

For private equity sponsors, institutional investors, and financial strategists, Major League Baseball presents a uniquely resilient and evolving asset class. Franchise valuations continue to climb, outperforming public markets and offering long-term capital appreciation that’s less correlated with traditional economic cycles. Private equity involvement is deeper in MLB than in any other U.S. league, demonstrating both regulatory openness and investor confidence in the league’s structural fundamentals.

However, the game is shifting. Media rights—historically a pillar of team revenue—are undergoing disruptive change. The decline of regional sports networks and the uncertain future of streaming-based deals present both challenges and opportunities. MLB’s 2028 media reset could either cement a new era of scalable, digital-first revenue or expose structural weaknesses in monetization.

For investors, the message is clear: MLB remains a valuable, long-term play—but success will hinge on strategic adaptability, especially around media and technology. Those positioned early in this transition stand to benefit most from baseball’s next inning of economic growth.

Sources & References

CNBC. (2025). CNBC Sport: MLB’s playbook to grow media revenue. https://www.cnbc.com/2025/03/27/cnbc-sport-mlbs-playbook-to-grow-media-revenue.html 

Forbes. (2025). MLB Revenues Hit Record $12.1 Billion In 2024. https://www.forbes.com/sites/maurybrown/2025/01/27/mlb-revenues-hit-record-121-billion-in-2024/ 

Forbes. (2024). The Business Of Baseball. https://www.forbes.com/mlb-valuations/list/#tab:overall 

Michigan Ross. (2024). Ross-Arctos Sports Franchise Index. https://michiganross.umich.edu/faculty-research/partnerships/ross-arctos-sports-franchise-index 

Michigan Ross. (2024). Ross-Arctos Sports Franchise Index (RASFI): Sports Asset Class Returns Over the Long-Term. https://michiganross.umich.edu/sites/default/files/uploads/Inst-Cntrs/RASFI/files/Arctos%20Insights%20White%20Paper%20-%20Introduction%20to%20RASFI%20Sports%20Asset%20Class%20Returns%20Over%20the%20Long%20Term%20vF_0.pdf

Pitchbook. (2024). Major league investors: Private equity’s pro sports ties. https://pitchbook.com/news/articles/private-equity-sports-investment-dashboard 

Sportico. (2024). Sports Grow From Private Equity Afterthought to Booming Market. https://www.sportico.com/business/finance/2024/when-did-private-equity-start-investing-in-sports-teams-1234779117/ 

SBJ. (2025). MLB teams keep eyeing ways to replace media dollars, which sources peg at close to 25% of club revenue. https://www.sportsbusinessjournal.com/Articles/2025/03/24/mlb-teams-keep-eyeing-ways-to-replace-media-dollars-which-sources-peg-at-close-to-25-of-club-revenue/ 

Sports 150. (2025). Scoring Money: The Economics of Sports. https://www.sport150.com/p/scoring-money-the-economics-of-sports 

Statista. (2024). Major sports leagues by average franchise value in North America from 2007 to 2023. https://www.statista.com/statistics/202758/franchise-value-of-us-sports-teams/