Show us the money!

Unless we are able to actually look at the team’s books its pretty hard to know exactly where the money goes. Sure player salaries was $90 million, but what about coaching and training staff. How about the costs to transport the team around the country throughout the season.

I’m not claiming to be an expert and I could be wrong. To me, it just seems a bit presumptive saying the ownership is pocketing $60 million when its very difficult for us to know all the facts involved.

I know Mark A bought the brewers because he loves baseball but he is a smart business man and needs to have a nice return on investment too.

Also as stated above you cant really call out a company based on only half of the story. Like any company I am sure the brewers need to pay for a multitude of small things that add up to a lot of money.

So for the Brewers, they are probably getting a big fat check from MLB Fox Sports Wisconsin totalling somewhere in the $60 million range. Factor in tickets and concessions, parking, merchadise, they are making a ton of money. The ticket sales alone probably puts them in the $90 million range alone, figure another $30 million for concessions, and $60 million for merchandise.

Do you have a source for your estimates are they just guesses? The $60M from Fox Sports seems especially high considering as of last year the Brewers had the lowest TV contract in baseball. I’ve always been curious myself and wondering where you’re getting these figures from.

Is the BA piece you are referring to online somewhere?

http://www.brewcrewball.com/2009/11/17/1161176/question-regarding-revenue-sharing

But you’re forgetting that some of that money is coming from the Brewers themselves. The Brewers are probably paying roughly $20MM in revenue sharing. Granted, they’re getting more back, but the more revenue we have, the smaller that gap becomes.

I’d just ask that you consider Stark’s potential biases and sources when you read that article. I think his numbers are inflated and that he’s being used as a mouthpiece of the larger market teams to defuse any building resentment over the Yankees essentially buying a title last year. This article also ignores the fact that some mid-market teams are kicking into the revenue sharing pool from which that “huge check” is distributed, so even if the Brewers are getting a check for 90 million, the net gain from that dispersal is significantly less than that.

I’m not married to the idea of a cap, but I do think more extensive revenue sharing (particularly of local media contracts) and a salary floor would do a great deal to distribute a larger portion of the income generated by MLB to the players (who are the show, in the end) and increase competitiveness across the board. It certainly would increase attendance, interest, TV/Radio audiences and thus revenue in places like Pittsburgh and Kansas City, which would be good for the game long term.

Not that I expect any of that to happen. The larger market owners have a death grip on the economic structure of baseball and the only way they’ll relinquish it is if strife with the MLBPA and eventually congress gives them no other choice.

I have to be this guy every time the concept of lowering ticket prices comes up.

TICKET PRICES HAVE NOTHING TO DO WITH THE TEAM’S EXPENSES. The supply of tickets is fixed, so the price is determined entirely by demand for the tickets. If they lowered ticket prices, they’d just be harder to get. The ticket price is set, theoretically, at the revenue-maximizing point; that is to say, when you, for example, raise the price of tickets, there’s a force raising your revenue, because you get more for each ticket, but there’s also a force lowering your revenue, because you sell fewer tickets. The goal is to balance those forces out, and find the point where revenue is maximized. The key thing here is that the point where revenue is maximized has nothing to do with expenses.

Sorry, I know that was only a tangential point, but it’s a pet peeve of mine.

I will make it rain!

(1) the numbers forbes publishes, while not correct, are directionally so. it’s worth checking out their business of baseball/ team profitability. keep in mind it only goes down to OM, so you don’t see the costs between OM (or EBITDA as their footnote explains) and NI, which may include tax and debt service, among other things (D&A, possibly a dividend).
(2) gate receipts are a notable portion of revenue, but not a key driver. for a mid-market team, it’s probably 1/4 of revenue, plus or minus. that varies by a number of factors.
(3) on the expense side, payroll is maybe half of revenue. other major league operations (team travel, supplies, field personnel, medical staff, etc), player development costs, marketing costs, G&A, stadium ops, all add up and could take up the “remaining” revenue amounts.
(4) at the end of the day, you can’t really expect mark a to be an altruist and make no money off his investment. it may not be a high return endeavor, but he should get some sort of return, in addition to the appreciation of the franchise’s value over time.

My estimates have payroll at $83.85M as of right now.

Mark A. has shown he’s willing to go up to around $90M with a player acquisition mid-season (and presumably not counting potential bonuses and incentives), so if my arb estimates aren’t actually high (I think they probably all in almost all cases, but that’s a good thing), then you’re looking at being able to play with around $6M in-season.