The link to the Forbes value table is here... http://www.forbes.com/lists/2006/33/Rank_1.html
Unfortunately there is very little detail included with the chart. There are two major issues covered in this chart, the value of the team and its operating profit.
Value
Forbes say the Jays are worth US$286 million an increase of 34% from last season. This puts the Jays in 22nd place, between the Detroit Tigers and the Cincinnati Reds. It is not clear whether this increase includes the purchase of the RC or not but the 34% increase suggests some major change is involved. The only team with a higher value increase was the Washington Nationals, for obvious reasons. The purchase of the RC by Rogers could have impacted value in two ways. First the value of the RC could be included in the value of the team. Second, a more favourable lease would lower the rent and thereby increase the value of the team. I am not aware of other factors that would increase the teams value other than the purchase of the RC. That purchase did allow the Jays to benefit from skybox revenues, a big plus. New or higher revenues could also increase the teams value but I am not aware of others. The Jays TV deal is similar in 2005 to 2004 and attendance has not changed significantly. The 34% value increase from 2004 to 2005 represents approx. US$75 mil. Rogers investment in the RC was around $30 mil for the purchase plus whatever they spent on improvements. All in all it looks like a good investment.
Irrespective of the reason, the 34% increase is good news for Rogers. In addition to the improved value of the team, the Jays could also increase the value of other Rogers properties such as Sportsnet and the Fan590. While hockey is #1 in Canada the Jays deliver good audiences, expecially in the summer when overall TV viewing is down as people spend more time out of doors. The Jays are now getting better at tying their marketing together with TV offers for Jays tickets, the ability to buy Jays tickets at Rogers video locations, and various cell phone tie-ins.
Operating Income
Forbes says the Jays made US$29.7 mil in 2005 on US$136 mil in revenues. The $136 mil in revenues is 23rd in the league, while the $29.7 mil profit is third behind the Houston Astros and the Cleveland Indians. It should be noted up front that this is operating income before interest, taxes, depreciation and amortization costs.
The Jays revenue ranking is not surprising and is a factor of attendance, ticket prices and TV and other revenues. The Jays attendance has been lagging recently and the Jays have been unable to price aggressively due to the reduction in the corporate market.
The difference between the revenues and the operating profit represents the Jays expenses, in this case just over $100 mil, one of the lowest numbers in the league. Jays payroll in 2005 was around US$50 mil with the balance representing club and minor league operations and marketing expenses. The Jays ads on TV, radio and in the newspapers do add up to a sizeable amount.
Rogers Communications bury the results of the Blue Jays in their media division. They also changed this accounting from 2004 when it was in a different division making it hard to follow the results of the Jays within the Rogers financials. Rogers would no doubt claim a loss, or at least much worse results than Forbes. For accounting purposes Rogers would write off signing bonuses more quickly than salary thereby impacting their results for the Jays. In addition Rogers might have depreciation costs relating to their purchase of the RC.
One other factor to consider is the value of the Canadian dollar. The Jays would have more expenses in US dollars (payroll and club expenses) than revenues (Fox TV deal and other MLB revenues). If we assume that the Jays have a net outflow of US$50 mil each year their cost in Canadian dollars would be substantially less in 2006 versus 2003. In 2003 the US/Canada exchange rate was around 1.60, today it is under 1.15. The Jays US$50 mil requirement would have cost $80 mil in Canadian dollars in 2003 versus $57 mil in 2006. That $23 mil savings goes straight to the Jays payroll increase.
So a rosy picture for the Jays. This explains the willingness of Rogers to increase payroll and the generally positive vibes coming from the club recently.
