Despite the rampant speculation prompted by a Portfolio article that the New York Yankees are destined for the auction block, its not likely to happen for awhile. The holdup would have little or nothing to do with the rumors surrounding owner George Steinbrenner's health, but rather baseball's unofficial agreement to not sell when another owner is selling.
Currently, Tribune Co. is selling the Chicago Cubs, meaning the Yankees would have to wait until the National League franchise completes a sale. However, the "gentleman's agreement" amongst owners isn't the only reason the Steinbrenners wouldn't want to upset the usual order of things in baseball. After all, the sale price of the Cubs will set the tone for the valuation of the Yankees.
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The Cubs are a storied franchise, and therefore likely to receive a premium for that history. After all, who wouldn't want to become baseball's next John Henry, the dealmaker who after buying the Boston Red Sox ended the team's 86 year World Series drought? With that in mind, the bidders are likely to push the Cubs to a new record sale in MLB history. In turn, the premium paid for a team with no World Series rings in almost a century would mean the Yankees with 26 rings would command an even higher premium. Forbes Magazine estimates that the Cubs are worth close to $600 million, which ranks fifth among baseball franchises.
However, Forbes' valuations are rough estimates. For example, when Time Warner Inc. sold the Braves to Liberty Media Corp. earlier in the year, bankers estimated the value of the team at about $450 million, which was 10% higher than Forbes' estimates.
For what the Forbes' estimates are worth, the Yankees are valued at $1.2 billion. At that price, Portfolio speculates that Donald Trump, Rudy Giuliani and James Dolan are likely contenders. However, the dealmakers would have to wait until the Cubs find their John Henry. —Matthew Wurtzel
See story from Portfolio
See post from Dealbook
See Cubs story from TheDeal.com
See Baseball Dealwatch
See Forbes' 2007 Baseball List
