The Boston Red Sox may have beaten the New York Yankees to the punch to become the first billion-dollar baseball club in history.
The remarkable valuation was apparently placed on the Sox -- and their cable arm, New England Sports Network -- in a transaction earlier this year. We learned financial terms last week.
The New York Times Co., a minority owner in the Sox, reported Thursday that it had booked a $9.1 million gain selling shares to Boston-based venture capitalist Henry McCance earlier this year.
It released no other financial terms, and declined to comment for this column.
However we know that the Times made the profit selling 50 of its 750 units in New England Sports Ventures, parent company of the Sox and their cable TV channel.
We also know that the Times paid $5 million for those 50 units eight years ago, when it paid $75 million for 750 units.
A $9.1 million profit on a $5 million purchase implies a $14.1 million sale. The shares sold amounted to 1.2% of the Sox. By that math, the total value of the club would be $1.2 billion...
Rob Tillis, managing partner of Inner Circle Sports, a firm specializing in sports finance, says the deal may actually understate the value of the Sox. An investor taking a controlling interest would typically pay a premium, he says. The $1.2 billion figure, he says, "is a low number."...
The Yankees will surely be worth even more than this if George Steinbrenner's heirs decide to sell. Forbes magazine puts the value of the Yankees at $1.6 billion. Rob Tillis suggests it may be higher. But there has been no transaction as yet...