Overview
In a recent article in The Athletic, partner Henry Smokler provides insight into the economic forces driving Major League Baseball (MLB) franchise valuations to record highs – and why owners are pushing for a salary cap ahead of the next round of collective bargaining negotiations.
The article examines why MLB team values continue to climb despite lagging behind NFL and NBA franchises in revenue multiples, exploring the influence of private equity, media rights, and the growing pool of ultra-high-net-worth buyers seeking entry into professional sports. Henry attributed the surge to a fundamental supply-and-demand imbalance. “It’s scarcity,” he told The Athletic. “There hasn’t been a lot of expansion. There’s just more buyers, more billionaires, more demand and not an increase in supply.”