Outgoing Los Angeles Angels owner Arte Moreno earlier this week agreed to sell the franchise to Stan Kroenke for a reported sum of $4 billion. That sale price would be a record for a Major League Baseball team, coming in just ahead of the recent sale of the San Diego Padres for $3.9 billion. Amid the backdrop of the ongoing negotiations on a new collective bargaining agreement (CBA) -- negotiations in which owners and the league are pushing for a cap on payrolls -- this is a noteworthy development.
Publicly, owners and MLB claim that a cap will improve competitive balance and parity, but there's other motivation: lowering labor costs and, the thinking goes, improving franchise values. Consider, though, the case of the Angels and that $4 billion sale price. This is a franchise that: And just to reiterate the above, the record-breaking transaction took place even as uncertainty over the next CBA imperils the 2027 season and as negotiations provide no assurances as to what the labor-management structure of the league will look like moving forward.
This should not be the kind of environment and suite of circumstances that lead to a record-breaking sale, but the same could be said of the small-market Padres and their outsized payroll obligations. One might be tempted to suspect that MLB owners are doing just fine. One might further be tempted to suspect just that when informed that Moreno purchased the Angels from the Walt Disney Company for a relatively paltry $180 million back in 2003.
That means Moreno, in buying and then selling the Angels after more than two decades of ownership, realized an annualized return of roughly 14.4%. That return not only whips the usual stock market return; it's also higher than the estimated annualized returns realized on the sales in recent years of the Denver Broncos and Washington Commanders in the NFL and the Boston Celtics and Phoenix Suns of the NBA. Doing just fine, they are.
This is important because MLB owners have undertaken a bit of a whisper campaign in which they've complained that MLB franchises aren't selling for the "revenue multiples" that NFL and NBA franchises are. MLB franchises, though, aren't cash businesses. They're investment vehicles (which explains why so many hedge-funders are trying to get in on the act).
And as investments, MLB franchises are doing very well when resold. Still, the internal belief -- or at least the belief that owners and ownership proxies are claiming to have -- is that not being in a capped league is keeping MLB franchises from reaching the revenue-multiple heights of the NFL and NBA, the leagues to which MLB is terminally addicted to comparing itself. There are problems with that line of thinking, though.
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