Disney’s ‘Blockbuster’ Angels Are Still for Sale

Minutes after the Anaheim Angels won the American League championship Sunday, Walt Disney Co. Chairman Michael Eisner compared the club to a hit movie.

“We’re in the business of blockbusters, and this is our blockbuster,” Eisner boasted as the players whooped it up in the clubhouse.

The difference, of course, is that Eisner is not trying to sell his studio, which makes money. He is trying to unload the team, which ranks in the lower end of in baseball’s economic scale. Not even a World Series victory, according to analysts and academics, is likely to reverse the Angel’s financial losses.

In other words, the Angels’ surprise season probably means more to long- suffering fans than it does to potential buyers sniffing around the club.

“The baseball team and its history and long-term prospects in Anaheim, that’s what’s going to determine the sale value,” said Rod Fort, a sports economist at the University of Washington. “What the Angels represent is a long-term economic asset that every once in a while gets in the playoffs.”

Disney executives, for their part, seem unwilling to wait. Last month, then-Angel President Paul Pressler said of the team: “It isn’t a strategic asset.”

Disney first made it known three years ago that the team no longer fit into its long-term strategy. During sales negotiations, the company set a price of $300 million and couldn’t find a buyer.

Now, major league sources say, Disney might entertain bids in the $180-million range, and three potential buyers have emerged: Mexican billionaire Carlos Peralta, who already owns pro baseball teams south of the border; the Nederlander family, one of the last private major entertainment impresarios in the U.S., which already books events at Anaheim’s Arrowhead Pond; and former baseball Commissioner Peter Ueberroth, whose investment group was outbid by Disney for the Angels in the mid-1990s.

“What someone is likely to pay for a franchise is a function of what they see the future cash flow being,” said David Carter of Los Angeles-based Sports Business Group. “You could make the argument that the further the Angels advance, the more money they’ll be able to make next year, in terms of season ticket sales and group sales, and in maybe enticing an additional sponsor or two that might have been sitting on the fence.”

But that would help only so much.

Before qualifying for the playoffs, the Angels were projecting an $18-million loss this season despite a 15% increase in attendance. Last year, when about $9 million from major league baseball’s revenue-sharing program was figured in, the Angels broke even, according to figures MLB provided to Congress.

Getting to the World Series could mean $13 million to $16 million in extra revenue, the amount that baseball officials say was generated by the Arizona Diamondbacks and New York Yankees in last year’s Fall Classic. Even with those additional millions, the Angels project a money-losing season this year. The team could lose even more next season if it has to bump up players’ salaries to keep the team intact.

The biggest financial spike probably will occur next season, when club officials expect season ticket sales to rise to more than 15,000 from 13,000 this season, and fan interest could lead local broadcaster KCAL Channel 9 to air more Angels games, increasing the team’s television revenue.

The Angels’ winning ways are about the only bright spot for Disney, which has seen a steep drop in its stock. Shares closed Monday up 8 cents at $16.08 on the New York Stock Exchange, down from the 52-week high of $25. Disney’s ABC network also has struggled for viewers, and even its theme parks -- particularly California Adventure -- have suffered.

Selling the Angels, and the Anaheim Mighty Ducks hockey franchise, won’t right the ship, but it could signal to Wall Street that Disney is ready to throw some things overboard.

Three years after Disney bought its first stake in the Angels, after the death of founding owner Gene Autry, it bought the rest. The company has been disappointed ever since. The Autry family sold in part because it could no longer afford the team’s escalating losses in a baseball world run financially amok.

Disney’s core businesses are movies, television and theme parks, not professional sports franchises. Disney hoped to use the Angels as anchor programming for a planned ESPN regional cable network but was outmaneuvered by Rupert Murdoch’s Fox television network, which bought the Los Angeles Dodgers and sewed up long-term television contracts for both the Angels and the Ducks.

Also important to Disney was that the teams stay in Anaheim and help solidify the region as a multiple-purpose entertainment destination -- one reason it spent $100 million to renovate Edison Field. Then came the recession and the collapse of the tourism industry in the wake of the Sept. 11 terror attacks.

Although the Angels are among Disney’s highest-profile assets at the moment, the team plays a minor role in a corporation with $25 billion in annual revenue. In that mix, the Angels account for less than half a penny of every Disney revenue dollar.

According to Carter, a major league baseball franchise is generally valued at about 2.5 times its annual revenue, which for the Angels was about $91.4 million last year. That would put the team’s value at $228.5 million. Forbes magazine estimated the value at $195 million this year.

Yet economist Fort said a straight valuation based on revenue tends to undervalue a professional sports franchise because of how a team fits in with its owner’s other holdings. A team that loses money at the gate could ultimately mean huge profit if its owner also runs the cable network that broadcasts the games and thus snags local ad revenue.

“There are a lot of other values to having a particular team in the stable of properties,” Fort said. “This is true for every baseball owner I can think of.”

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Times staff writers Bill Shaikin and Helene Elliott contributed to this report.