December 12, 2024 • 39 mins
Unlock the secrets behind Major League Baseball's most jaw-dropping contracts with our latest episode as we dissect Juan Soto's staggering $765 million agreement with the New York Mets. What drives baseball's elite owners to commit such colossal sums to star players, and how do they rationalize these investments? From the potential financial windfalls of World Series victories to the lucrative realm of enhanced ticket sales, merchandise, and media deals, we uncover how signing a superstar like Soto can transform a team's economic landscape. We'll navigate the world of mega contracts and explore how Soto's presence might catapult the Mets to new financial heights, even if championships remain elusive.
Join us for a deep dive into the economic impact of securing a mega superstar, examining how players like Soto act as powerful brand ambassadors and elevate a franchise's worth. We also speculate on Soto's financial future and the path to turning his earnings into a $5 billion empire through strategic, high-growth investments. By comparing Soto's deal to past and recent signings, such as Mike Trout, Bryce Harper, and Shohei Ohtani, we shed light on why these monumental contracts are reshaping the financial landscape of Major League Baseball. Whether you're a die-hard fan or a financial enthusiast, this episode promises a revealing look at the numbers game behind America's favorite pastime.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Major League Baseball fans, get ready for a close-up
look from the top step of thedugout.
Welcome to the BaseballClassics Podcast.
Covering any season from 1901to the present, We'll explore
exciting pennant races, diveheadfirst, analyzing and even
doing some comparisons that arebound to settle an argument or
(00:24):
start one up.
And now here's your host, DeanPitino.
Speaker 2 (00:33):
Hello again, everybody.
Thanks so much for tuning in tothis Baseball Classics
Diamondcast.
It's always great to be withyou and before we continue with
our series of looking back atall the major league clubs from
the 2024 season and a look aheadat each one, we have a special
episode for you, one that, sincethe signing of Juan Soto, I've
(00:55):
been wanting to put together andbring to you.
So this is a special episode.
Then we'll be picking it upright after this one and we'll
continue through and get allcaught up between now and
December 30th, reviewing all theteams in Major League Baseball
in 2024, the ones that wehaven't covered yet and, of
course, a look ahead for eachone of them.
The winter meetings justconcluded, so there's a lot to
(01:18):
talk about with many of theseball clubs, many of these ball
clubs, but this episode is onethat's going to look at the Juan
Soto $765 million contract froma financial standpoint, in
different angles.
This Diamondcast is going tocover it from the perspective of
what Major League Baseball megawealthy investors, in other
(01:42):
words, owners, have figured out.
You're going to see thiscontinue to be a trend.
It started, of course, back inthe day with Mike Trout and, of
course those of you listeningprobably remember that when
Trout signed years ago to thislong-term mega deal, there
haven't been too many sinceBryce Harper came along, but
(02:03):
this is the new norm now forMajor League Baseball.
You're going to see thisrolling out from wealthy mega
wealthy, I should say baseballowners.
So there's going to be severalways I want to take a look at
this and share with you on thisDiamondcast.
One is what will it take torecoup the $765 million?
(02:26):
Now, of course, there's been alot of articles out there about
what Juan Soto will do for theMets and how it will change the
lineup and all kinds of greatthings, and congratulations to
him and the Mets for bringing inJuan Soto.
But this DiamondCast, I want tolook at it from again the
financial perspective only Notis he worth $765 million.
Will he perform that?
(02:46):
Well?
Certainly, you know he may, butthat's really besides the point
.
I'm going to look at it fromthree perspectives in this
DiamondCast and I think you'regoing to find this to be very,
very fascinating.
One how many World Serieschampionships will it take for
the Mets to win to recoup the$765 million?
(03:07):
And then some what if theydon't win any World Series
championships during his tenure,how will they recoup the $765
million?
And then I want to flip itaround and look at it from Juan
Soto's perspective.
How can he take the $765million he's going to receive
over the next 15 years assumingthere's no opt-outs and turn
(03:30):
that $765 million into $5billion?
So those are the three ways I'mgoing to look at things in this
Diamondcast.
So I think you're going toreally find this interesting
because it's going to give yousome real deep perspective into
the minds of these mega wealthyowners and why they're doing
(03:52):
what they're doing.
I mean, of course, we had ShoeiOhtani last year, got signed,
of course, by the Dodgers, andeverybody was like, oh my gosh,
this crazy money and this lengthof time.
But what I'm about to sharewith you in this Diamondcast,
you're going to see exactly whythese owners are not only doing
it now, but they're going tocontinue to do this.
But of course, it takes asuperstar ballplayer in order to
(04:17):
pull this off.
So let's dive into this episodein just a moment, but first I
want to remind you let's diveinto this episode in just a
moment, but first I want toremind you head on over to
baseballclassicscom slashdiamondbutte Again.
Everything you need to knowabout what's happening in Major
League Baseball is all rightthere.
One website, it's easy tonavigate.
I guarantee you won't find thison any other website.
(04:41):
It doesn't matter which one yougo to.
If you go to mlbcom, mlb TradeRumors, I mean all the rest of
them, and they're all greatwebsites.
They're great services.
So this is certainly not aknock on them.
But what we're doing isdifferent.
We're curating all of thecontent.
We scour social media, we scourall these sites.
We bring it and we organize itfor you so you can consume it so
(05:05):
much easier.
You will love it.
Again, it's our free service,no login.
It's our way of saying thankyou to all of the Baseball
Classics customers we've hadthroughout the decades thousands
of them and of course, all thenew customers coming up that
will come into Baseball Classics.
We have great things for youahead.
(05:25):
But let's get back now to thisepisode.
But of course, first make sureyou head on over to
baseballclassicscom slashdiamond view again, free service
.
Tell your friends about it.
You won't be disappointed.
And with the winter meetingsthat took place this past week,
my goodness, we had so manyupdates to put on there.
But again, all all veryorganized for you Rumors, trades
(05:46):
that took place, free agentsignings how much?
Right now, there's been wellover $1.6 billion spent on free
agent signings alone.
As I record this, it's onlyDecember 12th.
I mean there's more to go, soit'll easily pass $2 billion
plus.
These are just free agentsignings.
So, again, the kind of moneythat is being spent out there
(06:08):
and you're going to see why inthis Diamond Cash.
So let's dive in.
Here we go.
In an era where sports teams areincreasingly regarded as
business ventures rather thanmere athletic organizations,
major League Baseball's mostfinancially savvy owners have
cracked a powerful code.
Securing a single megasuperstar can yield outsized
(06:32):
returns in ways the average fanmight not even realize.
So this is what's happening nowand again, it's the new norm
that you're going to see movingforward in major league baseball
.
This isn't just about improvingthe roster and sure it has a
lot to do with that but it's notjust about that.
It's about changing the entireeconomic trajectory of a
(06:56):
franchise.
So when steve cohen wanted toget soto and said he would
outspend anybody, thisDiamondCast is going to explain
what he was thinking, what isbehind his thinking, and others
like him that are signing thesemega superstars to these big
contracts.
So, when you think about it, theimpact of landing a Juan Soto
(07:18):
or a Shoei Otani or a Mike Trout, bryce Harper, bobby Witt, jr
this isn't just confined to whatthey can do with a bat or a
ball.
These players are brand dynamoscapable of transforming their
teams into much more thancompetitors.
They become the driving forcebehind an entire business
(07:39):
ecosystem.
The real question, then, is notwhether these players are worth
the price tags, but how theirpresence affects the financial
landscape surrounding the team.
Now let's look at severalangles here.
So the impact on ticket sales.
(08:01):
So, when we look at the impacton ticket sales from these mega
superstars and what typicallytakes place, this is what we see
happening.
So, for example, let's assumethat Juan Soto draws an
additional 10,000 fans per game.
(08:23):
An additional 10,000 fans pergame.
Well, that's the case, and eachticket, let's say, averages $50
.
So, over the course of 81 games, that's an extra $40.5 million
in revenue annually, and if hestays healthy, that's money that
(08:44):
keeps coming in for the wholelength of his contract.
Now, when a superstar like JuanSoto joins a team, ticket sales
aren't just bolstered, theyskyrocket.
Teams experience an immediatebump in attendance that they
haven't seen in either theirhistory of their franchise or in
(09:07):
a long time.
So it's not just for big gamesor weekend series Fans flock to
see generational talent likethis, even when the team is in
the middle of a rebuilding phase.
Think about the Mets and Soto'smonumental $675 million
contract.
What they've figured out isthat securing a player of this
(09:27):
caliber opens the floodgates toan influx of fans who might
never have considered buyingtickets to see a struggling team
.
The return on this investmentis felt quickly.
Now what about merchandisingsales?
There's an immediate revenuegrowth with this kind of
assigning.
(09:48):
For a team like the Mets, witha market as large as New York,
these sales can run into thetens of millions.
In the case of Soto, his jerseysales alone could easily
contribute tribute an extra $20million in revenue annually, and
that quickly adds up to, say,$200 million or more over the
(10:10):
life of his contract.
This is money that doesn'tdepend on wins or losses.
It's driven by a singular starwho can ignite passion among
casual fans and diehards alike.
But the ticket revenue is justthe tip of the iceberg.
When Major League Baseball megawealthy investors sign a
superstar, they're not justadding to the roster, they're
(10:31):
adding a walking talking brand.
Players like Soto don't justwear jerseys, they become
walking advertisements.
Jerseys, hats, memorabiliabearing their name fly off the
shelves, providing an additionalsource of income.
A superstar has the ability tocreate a cult personality around
their brand.
This is just an estimate,though it's possible.
(10:54):
The Los Angeles Dodgers sawaround $1.7 million to $2
million in sales just fromjersey sales and hat sales in
the first 24 hours after theysigned Shoei Otani, now
broadcasting and media, soturning fame into fortune.
(11:14):
For a team like the Mets, whohave a massive national and
international audience, theincreased visibility could mean
an additional $50 millionannually from television deals
and advertising.
Again, this is an additional$50 million Over the course of
Soto's 15-year contract.
That's $750 million.
(11:36):
In essence, a superstar bringswith him an army of eyeballs.
That translates into purebusiness revenue.
The value of the team itselfskyrockets, and it's not from
just having a strong on-fieldproduct.
It's from the attention andmarketability the player brings.
But it doesn't stop at theballpark.
(11:59):
Signing a superstar doesn'tjust generate more ticket sales
and merchandise revenue.
It makes the team more valuableacross multiple platforms,
especially broadcasting.
With a player of Soto'smagnitude, every game becomes
more than just a contest ofathletic skill.
It becomes an event.
Television ratings increase andwith them the value of
(12:21):
broadcasting rights.
Sponsorship deals again, theseare a magnet for corporations
when you bring in a superstarlike this.
So the Mets are likely to see10 to 20 million dollars more in
additional sponsorshipsannually.
That's a huge return oninvestment, especially when you
consider that these sponsorshipscan be long-term, locking in
(12:44):
revenue for many years beyondthe player's stay.
Sponsorships and partners areanother area where signing a
superstar pays dividends.
Every big player has corporatepartners flocking to them.
When a team adds a megastarlike Soto, they add an ability
to leverage those connectionsfor even more lucrative
(13:07):
sponsorships.
The team gets to negotiatebetter deals with companies who
want to tap into the increasedexposure.
Those companies want to beassociated with a winning brand,
and a superstar is the best wayto ensure your team is seen in
the right light.
Now, playoff and postseasonrevenue so turning the star into
(13:30):
an annual payday for yourfranchise.
So even without a World Seriestitle, the postseason brings a
wealth of opportunities toincrease revenues.
Superstars are not onlycatalysts for regular season
attendance.
They provide the addedincentive to fill the stands
during the most critical time ofthe year.
This is a business strategythat mega-wealthy owners are
(13:54):
keenly aware of.
Even one or two playoffappearances can result in $15 to
$20 million in additionalrevenue from ticket sales,
television deals andsponsorships.
The more consistently a teamcontends, the more guaranteed
playoff appearances they willhave, and with each the revenue
(14:15):
grows.
And, of course, there's theundeniable power of a superstar.
So, in the end, signing aplayer like Juan Soto isn't just
about filling out the lineupcard with a generational talent.
It's about reshaping theeconomic environment surrounding
the franchise.
Major League Baseball megawealthy investors know that,
(14:36):
while the price may be steep,the returns are even more
substantial.
These teams are investing intheir brand, in their visibility
and in their future success,not just on the field but in
their balance sheets.
So while it's easy to look at acontract worth $765 million and
(14:56):
question its validity, thetruth is it's likely a bargain
when you consider all theancillary benefits.
What a mega wealthy investor inMajor League Baseball has
figured out is that the impactof just one superstar goes far
beyond the metrics ofperformance.
It's a business engine thatdrives the financial success of
(15:20):
an entire franchise.
Now let's take a look at how theMets can make the best of their
mighty investment in Juan Soto,and the first thing we're going
to look at is how many WorldSeries Championships does it
take to recoup a $765 millioninvestment in Juan Soto for the
(15:42):
Mets?
So again, it's not just aboutwhat Soto will do for the Mets
on the field.
His presence will generateenormous revenue through
increased attendance,merchandise sales and media
attention.
If we break down the financialimpact of a championship season,
the math begins to tell aninteresting story.
(16:02):
Now here's a breakdown of howthe Mets might recover their
investment and estimated numberof championships required.
Number one increased ticketsales and attendance.
Winning a World Series is amonumental event and it's safe
to say it would raise the barfor the Mets' attendance figures
(16:23):
for years to come.
A mere ultra-conservative10,000 additional fans per game,
paying an average of $50 perticket, can generate a
remarkable $40.5 million perseason, as I mentioned earlier.
But multiply that by twochampionships let's just say
over a 10-year period we'relooking at approximately $81
(16:46):
million per title just in ticketsales Merchandise revenue.
Soto is not just a player Again, he's a brand.
A World Series win could sendjersey sales through the roof
and with Soto leading the charge, the Mets could see an extra
$20 million in merchandise sales.
Annually Over the course of,say, 10 years, this translates
(17:09):
to an additional againadditional $200 million in sales
.
Split that across just twochampionships, that's a
substantial $100 million pertitle in merchandise revenue
Again additional revenue forthem.
Number three media and broadcastrevenue.
(17:30):
The true value of winning WorldSeries goes beyond ticket sales
and merchandising.
It's about the exposure andbrand recognition A championship
boosts TV ratings, leading tomore lucrative local deals and
higher advertising revenue.
The Mets could easily see $50to $100 million in additional
(17:53):
broadcast-related revenue afterjust one title.
And number four sponsorshipsand partnerships.
Nothing sells like a winner.
World series titles attract newsponsors and enhance existing
relationships.
A mess championship could bringan additional 10 to 20 million
dollars in sponsorships, furthersolidifying their financial
(18:17):
future.
So now recouping the $765million, let's do some quick
math.
If you take into account therevenue generated from ticket
sales, merchandise, broadcastdeals and sponsorship, we see a
total of approximately $271million per World Series
(18:38):
championship.
To make good on that $765million investment, the Mets
would need to secure at leastthree World Series championships
yes, three.
So let's assume $81 million inticket revenue per championship,
$100 million in ticket revenueper championship, 100 million
(18:58):
dollars in merchandise revenueper championship, 75 million
dollars in broadcast revenue perchampionship and 15 dollars in
sponsorships per championship.
So for a single world serieswin that could the return.
Total return again could beabout 271 million to To reach or
exceed $765 million.
(19:19):
Three championships would benecessary to fully justify the
signing from a financialstandpoint.
Now, of course, there'snon-financial considerations, so
let's not forget the tangiblebenefits that could bring, or go
beyond the cold hard cash.
His value to the Mets extendsto the realm of legacy building,
(19:39):
consistent playoff appearancesand the buzz of having one of
baseball's best on their team.
These are things you can't puta price tag on, though for Mets
fans a few more championshipswould certainly help.
So we just looked at it fromthe perspective of how many
World Series championships wouldit take for the Mets to be able
to recoup that $765 million andits three World Series
(20:03):
championships?
But then I asked myself thisquestion what about if they
didn't win any World Serieschampionships during the entire
length of the Soto contract?
Would they be able to recouptheir investment?
So let's take a look at thatand you'll see how these numbers
work out.
So in a game where statisticsoften reign supreme, the
(20:25):
financial numbers behind some ofMajor League Baseball's most
significant contracts providejust as much intrigue as any
batting average or ERA.
Take, for example, the historiccontract of Juan Soto, the
young superstar who's about toembark on a 15-year journey with
the New York Mets a $765million journey to be exact.
(20:47):
While his on-field performanceis expected to dazzle, his
presence also promises to shakethe very foundation of the Mets'
financial future.
But how many championships willit take for the Mets to see a
return on that monumentalinvestment?
If the New York Mets don't winany World Series titles over the
(21:07):
course of Juan Soto's 15-year$765 million contract, they
would still be able to derivesignificant value from the
investment, while World Serieswins would certainly increase
revenue streams across severalareas.
There are several key factorsthat could contribute to a
return on that $765 millioninvestment.
(21:30):
So to provide an estimate ofhow much the New York Mets could
recoup from their $765 millioninvestment in Juan Soto over 15
years, let's break down eachcategory with reasonable
financial assumptions.
Now, these figures are roughestimates based on historical
data, industry averages andSoto's status as a top tier
(21:53):
player.
All right, ready, let's dive inagain.
This is how they could recoupthe $765 million.
So, number one, let's go back toincreased ticket sales and
attendance.
Now again, we covered alreadythat he would likely bring in an
additional 10,000 fans for 81home games.
(22:16):
With an average ticket price of$50, that's going to generate
$40.5 million per season inadditional ticket sales.
So over 15 years that would be$607.5 million.
So again we're talking about675 million dollar contract.
(22:38):
Just ticket sales alone couldalmost reach that amount.
However, let's say this isreduced over time as the novelty
of soda wears off.
Assuming it dropped like 10every five years, the total
revenue might be closer to 548.8million over the full 15 years.
(22:58):
Still an enormous amount ofadditional revenue from Juan
Soto just on ticket sales alone.
So that's 675, 548.8 million ofit is covered in additional
ticket sales.
Now what?
What about merchandise revenue?
So a player like Soto,especially after a World Series
(23:19):
appearance not necessarily achampionship win, just an
appearance can significantlyincrease merchandise sales.
Assuming Soto drives an extra$20 million per year in sales
due, to, say, jersey sales,collectibles and other
memorabiliaia, over 15 years itcould be 20 million a year.
You multiply that times 15,that's an additional 300 million
(23:44):
dollars.
Again, this would likely leveloff after the first few years
but still could result in about250 million over 15 years due to
sustained popularity andconsistent sales.
So just in ticket sales andrevenue alone, the Mets will
easily be able to go beyond the$765 million that they invested
(24:07):
in Juan Soto.
But there's of course there'smore.
What about media and broadcastrevenue?
His presence of course willelevate the Mets' TV ratings and
it'll translate into morelucrative local TV deals,
advertising revenue andincreased exposure for national
broadcasts.
An estimate forbroadcast-related revenue from
Soto's impact, let's say it's$50 to $100 million per World
(24:32):
Series win, but without titles.
So again, let's say WorldSeries appearances.
So let's assume the Mets stillsee an additional $25 million
per season from Soto's mediapresence.
Again, this is due to nationalbroadcast sponsorships and
increased local TV viewership.
So here's the math Over 15years, assuming that revenue
(24:55):
increases slightly over time.
Again, this is medium broadcastrevenue 25, let's say it's just
25 million a year.
That's times 15, that's $375million just from Soto.
Again we talked about WorldSeries, wanted to be 50 to 100
million, but again, no titles.
Let's just call 25 million.
(25:16):
So again, 25 million times 50,it's 375 million.
Now we still have more.
We have again we have to goback to sponsorships and
partnerships.
So world series championshipagain would bring major
sponsorships.
But even without titles, soto'smarketability would likely
attract new deals.
For example, a potential $15million per year in additional
(25:38):
sponsorships could be realisticgiven his popularity and the
Mets' increased exposure.
$15 million a year times 15years $225 million in additional
revenue.
Now this figure, of course,would likely fluctuate based on
the team's performance andSoto's marketability over time,
but could still represent asolid return of, let's say, $200
(26:01):
million over 15 years.
Now there's even more Enhancedbrand value and legacy.
The Mets' overall brand valuewould still increase due to his
global appeal, the global appealof Soto.
The Mets' team value wouldlikely increase significantly
(26:24):
over the 15 years, potentiallyincreasing by 5% annually.
If the Mets' franchise valueincreases by an estimated $300
million over the next 15 yearsdue to Soto's influence, that
can be factored into the overallreturn $300 million increase in
the Mets franchise value and ofcourse, it could go way, way
(26:45):
bigger than that.
Again, we're being conservativehere.
So there's $300 million more.
How about playoff revenue?
So his presence certainly couldlead to multiple postseason
appearances for the Mets.
I don't think there's anybodythat would question that.
I mean, the Mets, of course,made it to the playoffs without
(27:07):
Soto.
Imagine now they have Soto.
So even if the Mets don't win aWorld Series championship,
sustained playoff appearanceswould still bring additional
revenue.
So assuming three to fivepostseason appearances in 15
years, with average playoffrevenue, including higher ticket
prices, of $15 million perappearance, the Mets could gain
$15 million per postseason times.
Five appearances an extra $75million.
(27:29):
So the total estimate of therevenue that could come in over
15 years without a world seriestitle looks like this.
So the of the increased ticketsales, of course that we talked
about is, let's call it just 550million dollars.
You've got the merchandiserevenue at 250 or 50 million
(27:53):
medium broadcast revenue 375million.
Sponsors, sponsorships 200million.
Brand value increase 300million.
Playoff revenue 75 million.
Total estimated return is $1.75billion.
That's without winning a WorldSeries.
(28:15):
So over that period of 15 yearsit would do incredibly well
with having Soto and the $765million contract.
So about a billion dollarswould be their return on this
investment.
It's amazing.
So that's even again withoutwinning any World Series titles.
(28:38):
They could, of course, stillderive the substantial financial
benefits of bringing Soto inthrough, of course again, these
ticket sales, merchandisingrevenue, the media broadcast
revenue, sponsorships, brandvalue increase, playoff revenue
Again, that could be a prettyconservative number.
So what about the other side ofthe coin?
(28:59):
How about from Juan Soto'sperspective?
What was he thinking about whyhe needed to sign this kind of a
deal?
Of course he's passed up otherdeals that were offered to him
in the past, including one fromthe Washington Nationals that
was just under a half a billion.
From the Washington Nationalsthat was just under a half a
(29:20):
billion.
So turning a $765 millioncontract into a $5 billion
empire over 15 years, it's anambitious, yet achievable goal
for Soto.
So Soto may be thinking thisway right, how do I take?
I mean, 765 million?
Of course is, you know,multi-generational wealth, but
you can imagine what if you canturn that into 5 billion.
(29:41):
So here's a step-by-stepapproach that he could use to
turn $765 million into $5billion over 15 years.
So number one Soto couldmaximize investment returns.
This is a core growth strategy75% of the $765 million that
(30:15):
would be $573.75 million intohigh growth investments to
harness compounding returns.
So the stock market.
You could invest in ETFs 40% ofthat.
So $229.5 million.
Invest in a diversifiedportfolio of high growth stocks,
including sectors like tech,healthcare and green energy.
With an average annual returnof 10%.
This would yield $1.44 billionin 15 years.
(30:39):
What about private equity andventure capital?
You could take 25% of that,that's $143.44 million million.
Invest that in emergingstartups with potential for high
returns.
Focus on disruptive industriessuch as ai and biotech.
Targeting 10x returns on 10percent of investments.
(31:01):
This strategy could produce11.43 billion.
What about real estateinvestments?
25% of this goes to real estateinvestments.
That's another $143.44 million.
He could build a diverse realestate portfolio with commercial
, residential and luxuryvacation properties.
(31:23):
Leverage loans to acquireassets worth $500 million
properties.
Leverage loans to acquireassets worth $500 million.
Assuming 5% annual appreciationand 7% rental yields, this
investment could generate $1.1billion.
What about hedge funds andalternative investments?
Puts 10% into that, that's$57.38 million.
(31:46):
Invests in hedge funds,cryptocurrencies and commodities
like gold and oil.
These could generate returns of12 to 15 annually, projecting
in 210 million dollars in 15years.
That's just maximizing hisinvestment returns.
How much Soto could turn thatmoney into again?
(32:11):
Just enormous multibilliondollars of wealth.
But there's more.
He could build businessenterprises.
This is a secondary growthstrategy for Soto.
He could allocate 20% of hiscontract that's $153 million to
develop scalable businesses likesports ventures.
If he invested $50 million intothat, invest in sports
(32:36):
franchises.
Leveraging 10% annual growth insports team values, this could
result in $200 million over 15years.
How about brand ventures?
Create a lifestyle brandclothing, sports equipment link
to his legacy, capitalizing onendorsement deals.
Projected growth here couldtotal $500 million.
(32:57):
How about media production?
Invest $30 million in that.
Launch a media company focusingon sports content, including
documentaries and podcasts.
With a 25% internal rate ofreturn, this venture could yield
$250 million for Soto.
And last but not least here,real estate development.
If he invests $23 million intothat, he could develop luxury
(33:21):
resorts and mixed-use propertiesin prime locations.
Assuming a 12% return oninvestment, this could generate
an additional $120 million forSoto at the end of the 15 years.
But there's still more Leveragehis brand value with licensing
and endorsements.
He could allocate $38.25million that's 5% for licensing
(33:45):
deals and endorsements so hecould partner with global brands
like Nike and Gatorade andcreate significant product lines
.
Expected revenue from thiscould amount to $80 million over
15 years.
He also could retain liquidityfor flexibility, allocate $38.25
(34:07):
million again that's another 5%as a reserve to remain
adaptable for futureopportunities and challenges and
to achieve his $5 billion goal.
Here it could look like thisHigh growth investments $4.18
billion.
Business ventures could get$1.07 billion, brand licensing
(34:32):
and endorsements $80 million.
Liquidity $38.25 million.
His total estimated net worthat the end of 15 years could be
$5.37 billion.
Now here is his key successfactors.
To make this happen, he has to,of course, hire experts, work
(34:53):
with the top-tier financialadvisors, venture capitalists
and legal counsel.
Of course, he has to bedisciplined, avoid speculative
risk and focus on long-termstrategies.
He has to, of course, leveragehis fame, use his celebrity
status to secure high-valuedeals.
And then tax efficiency,optimize investments through
(35:14):
offshore accounts and taxstrategies Really crucial with
that point there.
So by following thiscomprehensive strategy, juan
Soto could turn his $765 millioncontract into an empire worth
over $5 billion, ensuring hisfinancial independence and
(35:34):
leaving a lasting legacy beyondthe diamond.
So it's official the megacontract model is here to stay.
In Major League Baseball, mikeTrout, bryce Harper about Aaron
Judge, shoei Otani and, ofcourse, juan Soto.
Again, I mentioned Bobby WittJr.
More to come.
Of course, this model is notgoing to go away, and this
(35:57):
Diamondcast explains exactly whyit's never going to go away and
it's only going to get biggerand bigger and bigger, and these
ownerships are going to lookfor these mega superstar guys
like a Soto.
Now of course they don't comealong that often, but when they
do, you want to grab them.
So of course the deal withShoei Otani that the Dodgers did
(36:18):
is now looking like a completebargain.
I mean, shoei Otani'smarketability is far beyond all
those other players Trout,harper, bobby Wood Jr, even
Judge and Soto Ohtani.
The Dodgers are going to be inamazing shape for a long, long
time to come with thisinvestment in Ohtani.
(36:39):
But now the Mets will too, andof course the Yankees with Judge
.
And of course the Phillies havebenefited from Bryce Harper,
the Royals will, with Bobby WoodJr and the Angels.
Of course the Phillies havebenefited from Bryce Harper, the
Royals will, with Bobby Wood Jr, and the Angels, of course,
have really benefitedfinancially from having Mike
Trout on board.
In the competitive world ofMajor League Baseball, signing a
superstar isn't just aboutimproving the lineup.
It's about leveraging thepresence to maximize business
(37:02):
revenue, brand value andmarketability.
The wealthiest teams in aleague know this and are using
it to their advantage.
So signing a player like JuanSoto not only brings a
championship caliber player tothe roster, it transforms the
financial ecosystem of thefranchise and for owners with
(37:23):
the foresight and resources tomake these moves, the financial
benefits will pay off long intothe future.
Juan Soto's monumental $765million deal with the New York
Mets represent a bet on both thepresent and future.
While the road to recoupingthis staggering sum isn't a
straight line straight line, thecombination of increased ticket
(37:48):
sales, soaring merchandise andlucrative broadcasting deals and
partnerships could make thiscontract a sound investment for
the team for a long time to come.
With Soto leading the charge,the Mets' future looks bright
and perhaps, with a fewchampionships, their financial
future will look even better,will look even better.
Well, what about the next megasuperstar coming up for free
(38:09):
agency?
Could it be Vlad Guerrero Jr?
Right now with the Toronto BlueJays, he could be a free agent
in the next year or so.
If the Toronto Blue Jays don'tsign him to a mega deal, you
know he's going to be lookingfor that.
Toronto Blue Jays don't signhim to a mega deal, you know
he's going to be looking forthat.
So will he be the next one toget this kind of an enormous
(38:31):
contract?
And now we know one.
At least one team is going tosign him to that kind of an
agreement, and who knows whoelse in the future?
So again, thanks so much fortuning in.
That's a wrap of this specialedition of Baseball Classics
Diamondcast.
We'll see you next time as wepick things back up covering all
(38:54):
30 of the Major League teamsand what they did in 2024 and
the look ahead for 2025.
So until then, hope you have afantastic day.
We'll see you next time.
So long, everybody.
Major League Baseball fans, get ready for a close-up
look from the top step of thedugout.
Welcome to the BaseballClassics Podcast.
Covering any season from 1901to the present, We'll explore
exciting pennant races, diveheadfirst, analyzing and even
doing some comparisons that arebound to settle an argument or
(00:24):
start one up.
And now here's your host, DeanPitino.
Speaker 2 (00:33):
Hello again, everybody.
Thanks so much for tuning in tothis Baseball Classics
Diamondcast.
It's always great to be withyou and before we continue with
our series of looking back atall the major league clubs from
the 2024 season and a look aheadat each one, we have a special
episode for you, one that, sincethe signing of Juan Soto, I've
(00:55):
been wanting to put together andbring to you.
So this is a special episode.
Then we'll be picking it upright after this one and we'll
continue through and get allcaught up between now and
December 30th, reviewing all theteams in Major League Baseball
in 2024, the ones that wehaven't covered yet and, of
course, a look ahead for eachone of them.
The winter meetings justconcluded, so there's a lot to
(01:18):
talk about with many of theseball clubs, many of these ball
clubs, but this episode is onethat's going to look at the Juan
Soto $765 million contract froma financial standpoint, in
different angles.
This Diamondcast is going tocover it from the perspective of
what Major League Baseball megawealthy investors, in other
(01:42):
words, owners, have figured out.
You're going to see thiscontinue to be a trend.
It started, of course, back inthe day with Mike Trout and, of
course those of you listeningprobably remember that when
Trout signed years ago to thislong-term mega deal, there
haven't been too many sinceBryce Harper came along, but
(02:03):
this is the new norm now forMajor League Baseball.
You're going to see thisrolling out from wealthy mega
wealthy, I should say baseballowners.
So there's going to be severalways I want to take a look at
this and share with you on thisDiamondcast.
One is what will it take torecoup the $765 million?
(02:26):
Now, of course, there's been alot of articles out there about
what Juan Soto will do for theMets and how it will change the
lineup and all kinds of greatthings, and congratulations to
him and the Mets for bringing inJuan Soto.
But this DiamondCast, I want tolook at it from again the
financial perspective only Notis he worth $765 million.
Will he perform that?
(02:46):
Well?
Certainly, you know he may, butthat's really besides the point
.
I'm going to look at it fromthree perspectives in this
DiamondCast and I think you'regoing to find this to be very,
very fascinating.
One how many World Serieschampionships will it take for
the Mets to win to recoup the$765 million?
(03:07):
And then some what if theydon't win any World Series
championships during his tenure,how will they recoup the $765
million?
And then I want to flip itaround and look at it from Juan
Soto's perspective.
How can he take the $765million he's going to receive
over the next 15 years assumingthere's no opt-outs and turn
(03:30):
that $765 million into $5billion?
So those are the three ways I'mgoing to look at things in this
Diamondcast.
So I think you're going toreally find this interesting
because it's going to give yousome real deep perspective into
the minds of these mega wealthyowners and why they're doing
(03:52):
what they're doing.
I mean, of course, we had ShoeiOhtani last year, got signed,
of course, by the Dodgers, andeverybody was like, oh my gosh,
this crazy money and this lengthof time.
But what I'm about to sharewith you in this Diamondcast,
you're going to see exactly whythese owners are not only doing
it now, but they're going tocontinue to do this.
But of course, it takes asuperstar ballplayer in order to
(04:17):
pull this off.
So let's dive into this episodein just a moment, but first I
want to remind you let's diveinto this episode in just a
moment, but first I want toremind you head on over to
baseballclassicscom slashdiamondbutte Again.
Everything you need to knowabout what's happening in Major
League Baseball is all rightthere.
One website, it's easy tonavigate.
I guarantee you won't find thison any other website.
(04:41):
It doesn't matter which one yougo to.
If you go to mlbcom, mlb TradeRumors, I mean all the rest of
them, and they're all greatwebsites.
They're great services.
So this is certainly not aknock on them.
But what we're doing isdifferent.
We're curating all of thecontent.
We scour social media, we scourall these sites.
We bring it and we organize itfor you so you can consume it so
(05:05):
much easier.
You will love it.
Again, it's our free service,no login.
It's our way of saying thankyou to all of the Baseball
Classics customers we've hadthroughout the decades thousands
of them and of course, all thenew customers coming up that
will come into Baseball Classics.
We have great things for youahead.
(05:25):
But let's get back now to thisepisode.
But of course, first make sureyou head on over to
baseballclassicscom slashdiamond view again, free service
.
Tell your friends about it.
You won't be disappointed.
And with the winter meetingsthat took place this past week,
my goodness, we had so manyupdates to put on there.
But again, all all veryorganized for you Rumors, trades
(05:46):
that took place, free agentsignings how much?
Right now, there's been wellover $1.6 billion spent on free
agent signings alone.
As I record this, it's onlyDecember 12th.
I mean there's more to go, soit'll easily pass $2 billion
plus.
These are just free agentsignings.
So, again, the kind of moneythat is being spent out there
(06:08):
and you're going to see why inthis Diamond Cash.
So let's dive in.
Here we go.
In an era where sports teams areincreasingly regarded as
business ventures rather thanmere athletic organizations,
major League Baseball's mostfinancially savvy owners have
cracked a powerful code.
Securing a single megasuperstar can yield outsized
(06:32):
returns in ways the average fanmight not even realize.
So this is what's happening nowand again, it's the new norm
that you're going to see movingforward in major league baseball
.
This isn't just about improvingthe roster and sure it has a
lot to do with that but it's notjust about that.
It's about changing the entireeconomic trajectory of a
(06:56):
franchise.
So when steve cohen wanted toget soto and said he would
outspend anybody, thisDiamondCast is going to explain
what he was thinking, what isbehind his thinking, and others
like him that are signing thesemega superstars to these big
contracts.
So, when you think about it, theimpact of landing a Juan Soto
(07:18):
or a Shoei Otani or a Mike Trout, bryce Harper, bobby Witt, jr
this isn't just confined to whatthey can do with a bat or a
ball.
These players are brand dynamoscapable of transforming their
teams into much more thancompetitors.
They become the driving forcebehind an entire business
(07:39):
ecosystem.
The real question, then, is notwhether these players are worth
the price tags, but how theirpresence affects the financial
landscape surrounding the team.
Now let's look at severalangles here.
So the impact on ticket sales.
(08:01):
So, when we look at the impacton ticket sales from these mega
superstars and what typicallytakes place, this is what we see
happening.
So, for example, let's assumethat Juan Soto draws an
additional 10,000 fans per game.
(08:23):
An additional 10,000 fans pergame.
Well, that's the case, and eachticket, let's say, averages $50
.
So, over the course of 81 games, that's an extra $40.5 million
in revenue annually, and if hestays healthy, that's money that
(08:44):
keeps coming in for the wholelength of his contract.
Now, when a superstar like JuanSoto joins a team, ticket sales
aren't just bolstered, theyskyrocket.
Teams experience an immediatebump in attendance that they
haven't seen in either theirhistory of their franchise or in
(09:07):
a long time.
So it's not just for big gamesor weekend series Fans flock to
see generational talent likethis, even when the team is in
the middle of a rebuilding phase.
Think about the Mets and Soto'smonumental $675 million
contract.
What they've figured out isthat securing a player of this
(09:27):
caliber opens the floodgates toan influx of fans who might
never have considered buyingtickets to see a struggling team
.
The return on this investmentis felt quickly.
Now what about merchandisingsales?
There's an immediate revenuegrowth with this kind of
assigning.
(09:48):
For a team like the Mets, witha market as large as New York,
these sales can run into thetens of millions.
In the case of Soto, his jerseysales alone could easily
contribute tribute an extra $20million in revenue annually, and
that quickly adds up to, say,$200 million or more over the
(10:10):
life of his contract.
This is money that doesn'tdepend on wins or losses.
It's driven by a singular starwho can ignite passion among
casual fans and diehards alike.
But the ticket revenue is justthe tip of the iceberg.
When Major League Baseball megawealthy investors sign a
superstar, they're not justadding to the roster, they're
(10:31):
adding a walking talking brand.
Players like Soto don't justwear jerseys, they become
walking advertisements.
Jerseys, hats, memorabiliabearing their name fly off the
shelves, providing an additionalsource of income.
A superstar has the ability tocreate a cult personality around
their brand.
This is just an estimate,though it's possible.
(10:54):
The Los Angeles Dodgers sawaround $1.7 million to $2
million in sales just fromjersey sales and hat sales in
the first 24 hours after theysigned Shoei Otani, now
broadcasting and media, soturning fame into fortune.
(11:14):
For a team like the Mets, whohave a massive national and
international audience, theincreased visibility could mean
an additional $50 millionannually from television deals
and advertising.
Again, this is an additional$50 million Over the course of
Soto's 15-year contract.
That's $750 million.
(11:36):
In essence, a superstar bringswith him an army of eyeballs.
That translates into purebusiness revenue.
The value of the team itselfskyrockets, and it's not from
just having a strong on-fieldproduct.
It's from the attention andmarketability the player brings.
But it doesn't stop at theballpark.
(11:59):
Signing a superstar doesn'tjust generate more ticket sales
and merchandise revenue.
It makes the team more valuableacross multiple platforms,
especially broadcasting.
With a player of Soto'smagnitude, every game becomes
more than just a contest ofathletic skill.
It becomes an event.
Television ratings increase andwith them the value of
(12:21):
broadcasting rights.
Sponsorship deals again, theseare a magnet for corporations
when you bring in a superstarlike this.
So the Mets are likely to see10 to 20 million dollars more in
additional sponsorshipsannually.
That's a huge return oninvestment, especially when you
consider that these sponsorshipscan be long-term, locking in
(12:44):
revenue for many years beyondthe player's stay.
Sponsorships and partners areanother area where signing a
superstar pays dividends.
Every big player has corporatepartners flocking to them.
When a team adds a megastarlike Soto, they add an ability
to leverage those connectionsfor even more lucrative
(13:07):
sponsorships.
The team gets to negotiatebetter deals with companies who
want to tap into the increasedexposure.
Those companies want to beassociated with a winning brand,
and a superstar is the best wayto ensure your team is seen in
the right light.
Now, playoff and postseasonrevenue so turning the star into
(13:30):
an annual payday for yourfranchise.
So even without a World Seriestitle, the postseason brings a
wealth of opportunities toincrease revenues.
Superstars are not onlycatalysts for regular season
attendance.
They provide the addedincentive to fill the stands
during the most critical time ofthe year.
This is a business strategythat mega-wealthy owners are
(13:54):
keenly aware of.
Even one or two playoffappearances can result in $15 to
$20 million in additionalrevenue from ticket sales,
television deals andsponsorships.
The more consistently a teamcontends, the more guaranteed
playoff appearances they willhave, and with each the revenue
(14:15):
grows.
And, of course, there's theundeniable power of a superstar.
So, in the end, signing aplayer like Juan Soto isn't just
about filling out the lineupcard with a generational talent.
It's about reshaping theeconomic environment surrounding
the franchise.
Major League Baseball megawealthy investors know that,
(14:36):
while the price may be steep,the returns are even more
substantial.
These teams are investing intheir brand, in their visibility
and in their future success,not just on the field but in
their balance sheets.
So while it's easy to look at acontract worth $765 million and
(14:56):
question its validity, thetruth is it's likely a bargain
when you consider all theancillary benefits.
What a mega wealthy investor inMajor League Baseball has
figured out is that the impactof just one superstar goes far
beyond the metrics ofperformance.
It's a business engine thatdrives the financial success of
(15:20):
an entire franchise.
Now let's take a look at how theMets can make the best of their
mighty investment in Juan Soto,and the first thing we're going
to look at is how many WorldSeries Championships does it
take to recoup a $765 millioninvestment in Juan Soto for the
(15:42):
Mets?
So again, it's not just aboutwhat Soto will do for the Mets
on the field.
His presence will generateenormous revenue through
increased attendance,merchandise sales and media
attention.
If we break down the financialimpact of a championship season,
the math begins to tell aninteresting story.
(16:02):
Now here's a breakdown of howthe Mets might recover their
investment and estimated numberof championships required.
Number one increased ticketsales and attendance.
Winning a World Series is amonumental event and it's safe
to say it would raise the barfor the Mets' attendance figures
(16:23):
for years to come.
A mere ultra-conservative10,000 additional fans per game,
paying an average of $50 perticket, can generate a
remarkable $40.5 million perseason, as I mentioned earlier.
But multiply that by twochampionships let's just say
over a 10-year period we'relooking at approximately $81
(16:46):
million per title just in ticketsales Merchandise revenue.
Soto is not just a player Again, he's a brand.
A World Series win could sendjersey sales through the roof
and with Soto leading the charge, the Mets could see an extra
$20 million in merchandise sales.
Annually Over the course of,say, 10 years, this translates
(17:09):
to an additional againadditional $200 million in sales
.
Split that across just twochampionships, that's a
substantial $100 million pertitle in merchandise revenue
Again additional revenue forthem.
Number three media and broadcastrevenue.
(17:30):
The true value of winning WorldSeries goes beyond ticket sales
and merchandising.
It's about the exposure andbrand recognition A championship
boosts TV ratings, leading tomore lucrative local deals and
higher advertising revenue.
The Mets could easily see $50to $100 million in additional
(17:53):
broadcast-related revenue afterjust one title.
And number four sponsorshipsand partnerships.
Nothing sells like a winner.
World series titles attract newsponsors and enhance existing
relationships.
A mess championship could bringan additional 10 to 20 million
dollars in sponsorships, furthersolidifying their financial
(18:17):
future.
So now recouping the $765million, let's do some quick
math.
If you take into account therevenue generated from ticket
sales, merchandise, broadcastdeals and sponsorship, we see a
total of approximately $271million per World Series
(18:38):
championship.
To make good on that $765million investment, the Mets
would need to secure at leastthree World Series championships
yes, three.
So let's assume $81 million inticket revenue per championship,
$100 million in ticket revenueper championship, 100 million
(18:58):
dollars in merchandise revenueper championship, 75 million
dollars in broadcast revenue perchampionship and 15 dollars in
sponsorships per championship.
So for a single world serieswin that could the return.
Total return again could beabout 271 million to To reach or
exceed $765 million.
(19:19):
Three championships would benecessary to fully justify the
signing from a financialstandpoint.
Now, of course, there'snon-financial considerations, so
let's not forget the tangiblebenefits that could bring, or go
beyond the cold hard cash.
His value to the Mets extendsto the realm of legacy building,
(19:39):
consistent playoff appearancesand the buzz of having one of
baseball's best on their team.
These are things you can't puta price tag on, though for Mets
fans a few more championshipswould certainly help.
So we just looked at it fromthe perspective of how many
World Series championships wouldit take for the Mets to be able
to recoup that $765 million andits three World Series
(20:03):
championships?
But then I asked myself thisquestion what about if they
didn't win any World Serieschampionships during the entire
length of the Soto contract?
Would they be able to recouptheir investment?
So let's take a look at thatand you'll see how these numbers
work out.
So in a game where statisticsoften reign supreme, the
(20:25):
financial numbers behind some ofMajor League Baseball's most
significant contracts providejust as much intrigue as any
batting average or ERA.
Take, for example, the historiccontract of Juan Soto, the
young superstar who's about toembark on a 15-year journey with
the New York Mets a $765million journey to be exact.
(20:47):
While his on-field performanceis expected to dazzle, his
presence also promises to shakethe very foundation of the Mets'
financial future.
But how many championships willit take for the Mets to see a
return on that monumentalinvestment?
If the New York Mets don't winany World Series titles over the
(21:07):
course of Juan Soto's 15-year$765 million contract, they
would still be able to derivesignificant value from the
investment, while World Serieswins would certainly increase
revenue streams across severalareas.
There are several key factorsthat could contribute to a
return on that $765 millioninvestment.
(21:30):
So to provide an estimate ofhow much the New York Mets could
recoup from their $765 millioninvestment in Juan Soto over 15
years, let's break down eachcategory with reasonable
financial assumptions.
Now, these figures are roughestimates based on historical
data, industry averages andSoto's status as a top tier
(21:53):
player.
All right, ready, let's dive inagain.
This is how they could recoupthe $765 million.
So, number one, let's go back toincreased ticket sales and
attendance.
Now again, we covered alreadythat he would likely bring in an
additional 10,000 fans for 81home games.
(22:16):
With an average ticket price of$50, that's going to generate
$40.5 million per season inadditional ticket sales.
So over 15 years that would be$607.5 million.
So again we're talking about675 million dollar contract.
(22:38):
Just ticket sales alone couldalmost reach that amount.
However, let's say this isreduced over time as the novelty
of soda wears off.
Assuming it dropped like 10every five years, the total
revenue might be closer to 548.8million over the full 15 years.
(22:58):
Still an enormous amount ofadditional revenue from Juan
Soto just on ticket sales alone.
So that's 675, 548.8 million ofit is covered in additional
ticket sales.
Now what?
What about merchandise revenue?
So a player like Soto,especially after a World Series
(23:19):
appearance not necessarily achampionship win, just an
appearance can significantlyincrease merchandise sales.
Assuming Soto drives an extra$20 million per year in sales
due, to, say, jersey sales,collectibles and other
memorabiliaia, over 15 years itcould be 20 million a year.
You multiply that times 15,that's an additional 300 million
(23:44):
dollars.
Again, this would likely leveloff after the first few years
but still could result in about250 million over 15 years due to
sustained popularity andconsistent sales.
So just in ticket sales andrevenue alone, the Mets will
easily be able to go beyond the$765 million that they invested
(24:07):
in Juan Soto.
But there's of course there'smore.
What about media and broadcastrevenue?
His presence of course willelevate the Mets' TV ratings and
it'll translate into morelucrative local TV deals,
advertising revenue andincreased exposure for national
broadcasts.
An estimate forbroadcast-related revenue from
Soto's impact, let's say it's$50 to $100 million per World
(24:32):
Series win, but without titles.
So again, let's say WorldSeries appearances.
So let's assume the Mets stillsee an additional $25 million
per season from Soto's mediapresence.
Again, this is due to nationalbroadcast sponsorships and
increased local TV viewership.
So here's the math Over 15years, assuming that revenue
(24:55):
increases slightly over time.
Again, this is medium broadcastrevenue 25, let's say it's just
25 million a year.
That's times 15, that's $375million just from Soto.
Again we talked about WorldSeries, wanted to be 50 to 100
million, but again, no titles.
Let's just call 25 million.
(25:16):
So again, 25 million times 50,it's 375 million.
Now we still have more.
We have again we have to goback to sponsorships and
partnerships.
So world series championshipagain would bring major
sponsorships.
But even without titles, soto'smarketability would likely
attract new deals.
For example, a potential $15million per year in additional
(25:38):
sponsorships could be realisticgiven his popularity and the
Mets' increased exposure.
$15 million a year times 15years $225 million in additional
revenue.
Now this figure, of course,would likely fluctuate based on
the team's performance andSoto's marketability over time,
but could still represent asolid return of, let's say, $200
(26:01):
million over 15 years.
Now there's even more Enhancedbrand value and legacy.
The Mets' overall brand valuewould still increase due to his
global appeal, the global appealof Soto.
The Mets' team value wouldlikely increase significantly
(26:24):
over the 15 years, potentiallyincreasing by 5% annually.
If the Mets' franchise valueincreases by an estimated $300
million over the next 15 yearsdue to Soto's influence, that
can be factored into the overallreturn $300 million increase in
the Mets franchise value and ofcourse, it could go way, way
(26:45):
bigger than that.
Again, we're being conservativehere.
So there's $300 million more.
How about playoff revenue?
So his presence certainly couldlead to multiple postseason
appearances for the Mets.
I don't think there's anybodythat would question that.
I mean, the Mets, of course,made it to the playoffs without
(27:07):
Soto.
Imagine now they have Soto.
So even if the Mets don't win aWorld Series championship,
sustained playoff appearanceswould still bring additional
revenue.
So assuming three to fivepostseason appearances in 15
years, with average playoffrevenue, including higher ticket
prices, of $15 million perappearance, the Mets could gain
$15 million per postseason times.
Five appearances an extra $75million.
(27:29):
So the total estimate of therevenue that could come in over
15 years without a world seriestitle looks like this.
So the of the increased ticketsales, of course that we talked
about is, let's call it just 550million dollars.
You've got the merchandiserevenue at 250 or 50 million
(27:53):
medium broadcast revenue 375million.
Sponsors, sponsorships 200million.
Brand value increase 300million.
Playoff revenue 75 million.
Total estimated return is $1.75billion.
That's without winning a WorldSeries.
(28:15):
So over that period of 15 yearsit would do incredibly well
with having Soto and the $765million contract.
So about a billion dollarswould be their return on this
investment.
It's amazing.
So that's even again withoutwinning any World Series titles.
(28:38):
They could, of course, stillderive the substantial financial
benefits of bringing Soto inthrough, of course again, these
ticket sales, merchandisingrevenue, the media broadcast
revenue, sponsorships, brandvalue increase, playoff revenue
Again, that could be a prettyconservative number.
So what about the other side ofthe coin?
(28:59):
How about from Juan Soto'sperspective?
What was he thinking about whyhe needed to sign this kind of a
deal?
Of course he's passed up otherdeals that were offered to him
in the past, including one fromthe Washington Nationals that
was just under a half a billion.
From the Washington Nationalsthat was just under a half a
(29:20):
billion.
So turning a $765 millioncontract into a $5 billion
empire over 15 years, it's anambitious, yet achievable goal
for Soto.
So Soto may be thinking thisway right, how do I take?
I mean, 765 million?
Of course is, you know,multi-generational wealth, but
you can imagine what if you canturn that into 5 billion.
(29:41):
So here's a step-by-stepapproach that he could use to
turn $765 million into $5billion over 15 years.
So number one Soto couldmaximize investment returns.
This is a core growth strategy75% of the $765 million that
(30:15):
would be $573.75 million intohigh growth investments to
harness compounding returns.
So the stock market.
You could invest in ETFs 40% ofthat.
So $229.5 million.
Invest in a diversifiedportfolio of high growth stocks,
including sectors like tech,healthcare and green energy.
With an average annual returnof 10%.
This would yield $1.44 billionin 15 years.
(30:39):
What about private equity andventure capital?
You could take 25% of that,that's $143.44 million million.
Invest that in emergingstartups with potential for high
returns.
Focus on disruptive industriessuch as ai and biotech.
Targeting 10x returns on 10percent of investments.
(31:01):
This strategy could produce11.43 billion.
What about real estateinvestments?
25% of this goes to real estateinvestments.
That's another $143.44 million.
He could build a diverse realestate portfolio with commercial
, residential and luxuryvacation properties.
(31:23):
Leverage loans to acquireassets worth $500 million
properties.
Leverage loans to acquireassets worth $500 million.
Assuming 5% annual appreciationand 7% rental yields, this
investment could generate $1.1billion.
What about hedge funds andalternative investments?
Puts 10% into that, that's$57.38 million.
(31:46):
Invests in hedge funds,cryptocurrencies and commodities
like gold and oil.
These could generate returns of12 to 15 annually, projecting
in 210 million dollars in 15years.
That's just maximizing hisinvestment returns.
How much Soto could turn thatmoney into again?
(32:11):
Just enormous multibilliondollars of wealth.
But there's more.
He could build businessenterprises.
This is a secondary growthstrategy for Soto.
He could allocate 20% of hiscontract that's $153 million to
develop scalable businesses likesports ventures.
If he invested $50 million intothat, invest in sports
(32:36):
franchises.
Leveraging 10% annual growth insports team values, this could
result in $200 million over 15years.
How about brand ventures?
Create a lifestyle brandclothing, sports equipment link
to his legacy, capitalizing onendorsement deals.
Projected growth here couldtotal $500 million.
(32:57):
How about media production?
Invest $30 million in that.
Launch a media company focusingon sports content, including
documentaries and podcasts.
With a 25% internal rate ofreturn, this venture could yield
$250 million for Soto.
And last but not least here,real estate development.
If he invests $23 million intothat, he could develop luxury
(33:21):
resorts and mixed-use propertiesin prime locations.
Assuming a 12% return oninvestment, this could generate
an additional $120 million forSoto at the end of the 15 years.
But there's still more Leveragehis brand value with licensing
and endorsements.
He could allocate $38.25million that's 5% for licensing
(33:45):
deals and endorsements so hecould partner with global brands
like Nike and Gatorade andcreate significant product lines
.
Expected revenue from thiscould amount to $80 million over
15 years.
He also could retain liquidityfor flexibility, allocate $38.25
(34:07):
million again that's another 5%as a reserve to remain
adaptable for futureopportunities and challenges and
to achieve his $5 billion goal.
Here it could look like thisHigh growth investments $4.18
billion.
Business ventures could get$1.07 billion, brand licensing
(34:32):
and endorsements $80 million.
Liquidity $38.25 million.
His total estimated net worthat the end of 15 years could be
$5.37 billion.
Now here is his key successfactors.
To make this happen, he has to,of course, hire experts, work
(34:53):
with the top-tier financialadvisors, venture capitalists
and legal counsel.
Of course, he has to bedisciplined, avoid speculative
risk and focus on long-termstrategies.
He has to, of course, leveragehis fame, use his celebrity
status to secure high-valuedeals.
And then tax efficiency,optimize investments through
(35:14):
offshore accounts and taxstrategies Really crucial with
that point there.
So by following thiscomprehensive strategy, juan
Soto could turn his $765 millioncontract into an empire worth
over $5 billion, ensuring hisfinancial independence and
(35:34):
leaving a lasting legacy beyondthe diamond.
So it's official the megacontract model is here to stay.
In Major League Baseball, mikeTrout, bryce Harper about Aaron
Judge, shoei Otani and, ofcourse, juan Soto.
Again, I mentioned Bobby WittJr.
More to come.
Of course, this model is notgoing to go away, and this
(35:57):
Diamondcast explains exactly whyit's never going to go away and
it's only going to get biggerand bigger and bigger, and these
ownerships are going to lookfor these mega superstar guys
like a Soto.
Now of course they don't comealong that often, but when they
do, you want to grab them.
So of course the deal withShoei Otani that the Dodgers did
(36:18):
is now looking like a completebargain.
I mean, shoei Otani'smarketability is far beyond all
those other players Trout,harper, bobby Wood Jr, even
Judge and Soto Ohtani.
The Dodgers are going to be inamazing shape for a long, long
time to come with thisinvestment in Ohtani.
(36:39):
But now the Mets will too, andof course the Yankees with Judge
.
And of course the Phillies havebenefited from Bryce Harper,
the Royals will, with Bobby WoodJr and the Angels.
Of course the Phillies havebenefited from Bryce Harper, the
Royals will, with Bobby Wood Jr, and the Angels, of course,
have really benefitedfinancially from having Mike
Trout on board.
In the competitive world ofMajor League Baseball, signing a
superstar isn't just aboutimproving the lineup.
It's about leveraging thepresence to maximize business
(37:02):
revenue, brand value andmarketability.
The wealthiest teams in aleague know this and are using
it to their advantage.
So signing a player like JuanSoto not only brings a
championship caliber player tothe roster, it transforms the
financial ecosystem of thefranchise and for owners with
(37:23):
the foresight and resources tomake these moves, the financial
benefits will pay off long intothe future.
Juan Soto's monumental $765million deal with the New York
Mets represent a bet on both thepresent and future.
While the road to recoupingthis staggering sum isn't a
straight line straight line, thecombination of increased ticket
(37:48):
sales, soaring merchandise andlucrative broadcasting deals and
partnerships could make thiscontract a sound investment for
the team for a long time to come.
With Soto leading the charge,the Mets' future looks bright
and perhaps, with a fewchampionships, their financial
future will look even better,will look even better.
Well, what about the next megasuperstar coming up for free
(38:09):
agency?
Could it be Vlad Guerrero Jr?
Right now with the Toronto BlueJays, he could be a free agent
in the next year or so.
If the Toronto Blue Jays don'tsign him to a mega deal, you
know he's going to be lookingfor that.
Toronto Blue Jays don't signhim to a mega deal, you know
he's going to be looking forthat.
So will he be the next one toget this kind of an enormous
(38:31):
contract?
And now we know one.
At least one team is going tosign him to that kind of an
agreement, and who knows whoelse in the future?
So again, thanks so much fortuning in.
That's a wrap of this specialedition of Baseball Classics
Diamondcast.
We'll see you next time as wepick things back up covering all
(38:54):
30 of the Major League teamsand what they did in 2024 and
the look ahead for 2025.
So until then, hope you have afantastic day.
We'll see you next time.
So long, everybody.
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