Despite year-over-year revenue gains and robust earnings, the economic downturn has finally caught up with the Indianapolis Indians. For years, the AAA baseball franchise has steamed along with solid attendance and annual profit exceeding $1 million. Profit of $1.23 million for 2008 was recently reported by team officials.
But now, stockbrokers making a market in Indians stock are showing less confidence in the franchise’s thinly traded stock. The franchise also has pulled back the reins on its stock buyback offer. The Indians board reduced its stock buyback price from the $21,832 per share it offered last year to $21,328. Market makers are pulling back much harder.
Even though the stock has traded at a 52-week high of $25,000 and a 52-week low of $23,250, market makers are currently offering only $17,500 to $17,250 per share. Since there are 767 outstanding shares remaining, that puts a paltry price tag of $13.4 million on the franchise. The team’s buyback offer values the team at $16.4 million.
Sports business experts predict the value of the franchise will rebound whenever general market and consumer confidence returns.