Now Would Be a Good Time for Expansion
Forbes came out today with its 2014 valuations of major league baseball teams. What strikes me more than the facts that Forbes now considers the New York Yankees to be worth $2.5 billion and the Los Angeles Dodgers to be worth $2 billion is that the four least valuable teams (the Tampa Rays, the Kansas City Royals, the Oakland A’s and the Miami Marlins) are all valued between $485 million and $500 million dollars. That’s still an awful lot of money even for the bottom-feeders.
It’s got me thinking that it’s about time for MLB to start thinking about adding two new expansion teams. Of the four teams at the bottom, it seems that all four could increase their valuations considerably by getting a new, better located stadium (the Rays and A’s), getting an ownership group more interested in winning (the Marlins) or doing a better job of marketing to their broad geographic area of potential fans (the Royals have a large section of the Mid-West essentially to themselves).
At any rate, it seems clear that it should not be difficult to find two new investor groups who would be willing to pony up $450 million each for the right to two new expansion teams. That would come to $30 million apiece for each of the existing 30 teams. By way of comparison, the last two expansion teams, the Tampa Rays and the Arizona Diamondbacks, each paid $130 million for the right to join MLB in 1998.
It has now been 16 years since the last major league expansion, which equals the longest previous period between expansions (1977 to 1993) since expansion began way back in 1961. Assuming that it would take several years to notify the world that another round of expansion will occur, to get submissions from and make choices about proposed ownership groups, and for the new clubs to start their farm systems before actually commencing league play, now would be a good time to make the decision to get the expansion ball rolling again.
About five years ago, I wrote a piece on where the next expansion teams should go, and I concluded that Portland, OR and San Antonio would be the best locations for the next two expansion teams, with Las Vegas, Charlotte and Indianapolis as other possibilities, based on metropolitan size and location relative to existing major league teams. I still think Portland and San Antonio would be good choices for the next round of two expansion teams.
Obviously, only time will tell if MLB’s current owners think its a good time to expand into new markets.