Reese Kaplan -- So How Much are Steve Cohen's Mets Worth?

Today we’re going to take a bit of departure from the drive to get into first place, the poor hitting, some inconsistent pitching and instead delve into the financial status of the New York Mets compared to other clubs in the major leagues.

Annually CNBC does an analysis of value of each baseball club based upon projected sale price, 2024 annual revenue, debt and other factors necessary to consider the true value of team as a business investment. 

I apologize for a moment before I introduce another of these factors called EBITDA.  That is a financial practice acronym that stands for Earnings Before Interest Taxes Depreciation and Amortization.  This metric became prominent in the 1980s during acquisition and restructuring which buyers would have to consider before they executed the purchase of another company.  The reason banks and financial analysts lean on this measurement is to evaluate whether or not a potential asset acquired would have the ability to cover the required interest payments necessary for borrowed money needed during a restructuring. 

Now when you first glance at CNBC’s list, it comes as no surprise that the team heading the list in the number one position is the New York Yankees.  They are valued at $8 billion.  They generated $705 million in revenue. Their debt is only 1% of their overall value.  The EBITDA number was a modest $7 million which would suggest the club’s ability to cover interest payments if they had any acquisition prospects up their sleeve.

Next on the list was the 2024 World Series Champion Los Angeles Dodgers who incidentally won that designation against their more expensive opponents from the Bronx.  While “only” valued at $5.8 billion, they generated nearly as much revenue with a reported $701 million.  They also have a rather low EBITDA at $10 million.  They are showing 10% of their debt as a percentage of value.

What comes as something of a surprise are the next four ballclubs on this list.  Given the way the Mets have been spending on payroll, you’d tend to think they’d be right there near the top.  It turns out that the Boston Red Sox, Chicago Cubs, San Francisco Giants and Philadelphia Phillies all showed values ranging from a high of $4.7 billion to a low of $3.2 billion. 

Finally, at 7th place on the list you’ll find Steve Cohen’s New York Mets.  They have a value of $3.15 billion, revenue of $446 million and match the Dodgers with a 10% debt to value calculation.  The one huge distracting thing is the EBITDA number of -$272 million.  In conventional terms, a negative number suggests a company is not managing its revenues and debt properly.  However, it could also indicate that a new owner is spending on many major improvements that will not show up in the revenue column overnight.  Bear in mind that Steve Cohen is also on board with the development of the casino near Citifield.

For comparison’s sake, of the 30 major league teams, only one other — the Texas Rangers — have a negative EBITDA, but it’s considerably smaller at -$42 million. 

At the bottom of the listing you have the leader of the Cincinnati Reds at $1.5 billion in value, followed down to the Pittsburgh Pirates, Kansas City Royals, the Tampa Bay Rays and the Florida Marlins pulling up the rear with a $1.2 billion price tag.