Steinbrenner vs. Stocks: Yankee Returns

In 1973, George Steinbrenner headed a group that bought the then-slumping New York Yankees for $8.9 million. On Tuesday morning, Steinbrenner died at the age of 80 following a heart attack. During the years in between, his team made 10 trips to the World Series, winning seven times. In April, Forbes Magazine named the Yankees the most valuable baseball team, estimating its worth at $1.6 billion -- more than 197 times Steinbrenner's original price.

That's obviously a giant increase, but let's take a closer look at what kind of return it is after factoring in time. The numbers can sometimes deceive, after all. Manhattan was famously purchased by the Dutch from American Indians in 1626 for goods worth just over $1,000 in today's money. (Forget the $24 figure that's often cited. It comes from a 19th century estimate, and so must be indexed for inflation.) Manhattan has 14,528 acres, and the choicest acres are probably worth $90 million as unimproved land, according to a 2008 study by the Federal Reserve Bank of New York. Even if we assume that all of Manhattan's acres are as valuable as its best ones (I assure you they're not), that yields a total value for the island's land of $1.3 trillion. That's a 5.6% annual return, compounded -- and the real figure is surely lower. In other words, the Dutch might have overpaid. (more)