The $3 Billion Question: The Potential Sale of the New York Yankees

For the extremely cheap price of $3 billion you can now own the New York Yankees.

Or maybe not, depending on who you believe. A report from the New York Daily News surfaced Wednesday evening that the Yankees, who have been owned by the late George Steinbrenner and his family since 1973, could be up for sale.

Check between your sofa for loose change because Yankee Stadium and the team that plays in it could be all yours for only $3 billion.

According to the report, the impetus for putting the team on the market stems from the recent sale of the Los Angeles Dodgers. Despite not having won a World Series title in 24 years, an aging stadium and a tumultuous period of ownership from Frank McCourt that led to a bankruptcy filing, the team still sold for more than $2 billion.

Steinbrenner’s two sons, Hank and Hal, don’t seem to be as emotionally invested in the team as their father, who paid $10 million to buy the club four decades ago. The thinking is if the downtrodden Dodgers can fetch more than $2 billion in a sale, the Yanks could easily surpass that and then some.

To quell the commotion, the family immediately denied the rumors from the Daily News story and said there is “absolutely, positively nothing to” the speculation. After all, it has been 932 days since the Bronx Bombers last won the World Series, and in Yankeeland that is unacceptable.

All kidding aside, the prospect of a sale is a tricky one. The late Steinbrenner no doubt always wanted the team to stay in the family, and seeing his children sell the club two years after his passing seems unjust. There’s also the tricky subject of the Empire State’s estate tax. In 2009, the 45 percent tax expired and the new rate of 55 percent did not begin until 2011. Because Mr. Steinbrenner passed in 2010 — between tax years — his family escaped having to pay nearly $500 million in taxes. If the family sells the team now, those taxes would apply. Why would the family surrender to such a hefty price they just evaded?

Others see it differently. Based on numbers from the Dodgers sale, financial experts estimate the Pinstripes could be sold for as much as $3 billion.  If someone asked to buy your business for $3 billion, you’d be selling too. Also consider the team’s aging roster of superstars like Derek Jeter, Mariano Rivera, Andy Pettitte, Alex Rodriguez and others. These players have contributed to the team winning five championships since 1996, and though a new crop of stars could still reap titles, it will be hard to replace these names. Finally the new Yankee Stadium, built in 2009, is the third-youngest in Major League Baseball and should be around for at least 40 years or more. To summarize: The value of the franchise may be at its peak.

So what do you think: Should the Steinbrenners sell the Yankees or not?

Photo (cc) by John Dalton and republished here under a Creative Commons license. Some rights reserved.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: