Author Topic: MLB financials, NoVA development, Etc.  (Read 1993 times)

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Offline welch

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MLB financials, NoVA development, Etc.
« Topic Start: November 28, 2010, 06:41:36 PM »
In under a decade Lerner will have made enough net gains to completely pay off the team debt and also recover his initial investment, leaving him with a ~$500 million asset and nothing but gravy from that point on.  All of this being done with near zero risk as MLB revenue sharing and the MASN contract provide him with quite a large guaranteed annual profit margin.  It's amazing that the fool can even dress himself.

Where can I find the Nats' financials?

Context:

- few teams in any sport are owned by families that only have the team as income. The NY Giants Maras come to mind, but it's tough to name one after that.

- there might have been a long, long recession in baseball, but all the family-teams were sold: Connie Mack, Bill Veeck, the Griffiths, for instance.

- English Premier League teams are mostly public corporations; several of the biggest reported last year that their owners were subsidizing their teams because team revenue left them in the red. Chelsea and Manchu were some of the biggest losers.

Assumption, therefore, is that a sports franchise is not high margin, and certainly not big business. My back-of-the-envelope guess is that the Nats annual revenues are only about $100 million per year. That seems low, since the Redskins had total players salaries of about $84 million back in '92-93, when the NFL went to their salary cap.

My guess: 30,000 fans per game at 81 games at $25 per ticket. Maybe low on the ticket price, but over-generous on the total fans. Add hot dogs, beer, and souvenirs, and that's still not a lot from game-attendance. I don't remember what the Nats get from MASN, but people complained that it was not enough. Surely, the ratings are not very high with a dead-losing team. While there is some revenue-sharing around the league based on "high-spending" teams, it is not enough that small market teams can bid with the Yankees, or that the Yankees or Mets pay close attention to salaries.

Stretch guess: maybe $150 million per year in revenue.

Offline PowerBoater69

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« Reply #1: November 28, 2010, 06:47:14 PM »
Forbes has annual estimates for every team, but the balance sheets for several teams were leaked to Deadspin last year showing that the Forbes numbers were low.

Offline welch

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« Reply #2: November 28, 2010, 07:01:25 PM »
Forbes has annual estimates for every team, but the balance sheets for several teams were leaked to Deadspin last year showing that the Forbes numbers were low.

What were they?


Offline PowerBoater69

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« Reply #4: November 28, 2010, 07:07:11 PM »
What were they?

1) Google: Forbes MLB revenue 
2) Google: Deadspin Pirates Marlins revenue

That should do it.

Offline comish4lif

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« Reply #5: November 28, 2010, 07:29:49 PM »
What were they?
Scott Boras and Rob Manfred went at each oe rearlier in the year, over a quote from Boras stating that some of the small market teams had $80-90m in revenue before selling a ticket.

Jayson Stark ran the numbers and found $80m to be a reasonable position on money recieved form the MLB central fund, revenue sharing, advanced media and local tv and radio.

http://sports.espn.go.com/mlb/columns/story?columnist=stark_jayson&page=rumblings091119&campaign=rss&source=MLBHeadlines

Don't the Nats get $25m from MASN regardless of the number of viewers?

Offline welch

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« Reply #6: November 28, 2010, 07:30:54 PM »
1) Google: Forbes MLB revenue 
2) Google: Deadspin Pirates Marlins revenue

That should do it.

Thanks...I'm looking, and wondering how close my ballpark guesses are to reality.

Offline PowerBoater69

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« Reply #7: November 28, 2010, 07:47:02 PM »
Don't the Nats get $25m from MASN regardless of the number of viewers?
The MASN contract has the Nats receiving increased payments every year for some amount of time.  It started at ~$20 mil and has moved up into the $25 mil range.  I'd like to see details but I'm not sure if they have ever been published.  Must be nice to buy into a business that guarantees you revenues north of $100 million annually while allowing you to keep expenses a significant amount lower.

Offline welch

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« Reply #8: November 28, 2010, 07:57:06 PM »
It looks like the Pirates, first up on the DeadSpin list, made about $14 million on revenues of about $145 million in 2008. Is that about right?

Skipping a lot of the chump-change ins and outs, it appears that the Pirates got about $39 million in revenue sharing. Gate receipts were roughly the same, and they picked up substantial chunks of revenue from national broadcasting. They pay almost nothing to rent the new ballpark...which is consistent with the "arrangements" that various New York teams have gotten from NY City, (New York State?), and the State of New Jersey.

Still about right?

I'm hoping Deadspin has the Yankees or Mets, because Washington is closer to NYC as a market...fewer people, but higher median income, I would guess.

Edit: nope. Closest is the Los Angeles Angels / Anaheim Angels, or whatever they are now called.


Offline PANatsFan

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« Reply #9: November 28, 2010, 08:01:28 PM »
MLB Trade Rumors has the Nats interested in Jesse Crain - maybe some relievers are already on the way out in trade . . .

Offline MarquisDeSade

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« Reply #10: November 28, 2010, 08:08:34 PM »
MLB Trade Rumors has the Nats interested in Jesse Crain - maybe some relievers are already on the way out in trade . . .

I'm sure he enjoyed being run out of MPLS on a rail.

Offline tomterp

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« Reply #11: November 28, 2010, 08:59:20 PM »
The MASN contract has the Nats receiving increased payments every year for some amount of time.  It started at ~$20 mil and has moved up into the $25 mil range.  I'd like to see details but I'm not sure if they have ever been published.  Must be nice to buy into a business that guarantees you revenues north of $100 million annually while allowing you to keep expenses a significant amount lower.


Did you actually read any of the financial statements linked in the Deadspin article?

On revenue of $136m, Marlins had net income of less than $4m.  Hardly rolling in the dough, and the Marlins reported player compensation of a mere $43m, showing there are significant other expenses in running a ballclub that people tend to forget about.

Furthermore, they ended 2009 with only $3.4m in cash, hardly a large amount for a business that also reported $17m in accrued payables, current liabilities and player bonuses.  

The Marlins statements revealed a business with thin margins and a need to manage expenses and the timing of payments closely, with narrow margin for error (such as missing revenue forecasts).

Online HalfSmokes

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« Reply #12: November 28, 2010, 09:06:09 PM »
The Rays are the most telling- by fielding a competitive team and slightly increasing payroll, they likely lost money this year

Offline tomterp

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« Reply #13: November 28, 2010, 09:08:38 PM »
The Rays are the most telling- by fielding a competitive team and slightly increasing payroll, they likely lost money this year

Those financial statements are a mother lode of information.  I think we could infer quite a bit about the Nats' operations by studying a couple of those examples. 


Offline Lintyfresh85

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« Reply #14: November 28, 2010, 09:12:48 PM »
Did you actually read any of the financial statements linked in the Deadspin article?

On revenue of $136m, Marlins had net income of less than $4m.  Hardly rolling in the dough, and the Marlins reported player compensation of a mere $43m, showing there are significant other expenses in running a ballclub that people tend to forget about.

Furthermore, they ended 2009 with only $3.4m in cash, hardly a large amount for a business that also reported $17m in accrued payables, current liabilities and player bonuses. 

The Marlins statements revealed a business with thin margins and a need to manage expenses and the timing of payments closely, with narrow margin for error (such as missing revenue forecasts).

What about the Pirates with an income of over 12.5 million?

Don't get it twisted on the Marlins either. In 2008, they put a profit of 29 million. It's not like every single year is only a 3.4 million profit.

Offline tomterp

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« Reply #15: November 28, 2010, 09:24:14 PM »
What about the Pirates with an income of over 12.5 million?

Don't get it twisted on the Marlins either. In 2008, they put a profit of 29 million. It's not like every single year is only a 3.4 million profit.

I haven't had a chance to look at any of the other teams, but will over the coming weeks.

Did you see why the Marlins profit plunged?  The single largest reason was they increased player compensation from $29.7m to $43.0m.  It also looks like they incurred a new cost titled "ballpark related expenses", which might be cost related to the new ballpark they've been trying to get.

But if increasing player comp to $43m puts you at the edge of profitability, then people who accuse the franchise of milking the large league payments (over $80m) are missing the overall picture. 

Offline Potomac Cannons

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« Reply #16: November 28, 2010, 09:32:58 PM »
MLB Trade Rumors has the Nats interested in Jesse Crain - maybe some relievers are already on the way out in trade . . .

Which would help explain the Kimball and Carr tryouts in the AFL then additions to the 40 man.  Pretty decent position of strength to solidify deals with.

Offline PANatsFan

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« Reply #17: November 28, 2010, 09:38:33 PM »
I'm sure he enjoyed being run out of MPLS on a rail.

Dude, look, we shouldn't be posting here unless it's about Jeter or payroll, sheesh.

Offline MarquisDeSade

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« Reply #18: November 28, 2010, 10:17:26 PM »
Dude, look, we shouldn't be posting here unless it's about Jeter or payroll, sheesh.

Sorry, my memory slipped again...

Offline MarquisDeSade

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« Reply #19: November 28, 2010, 10:21:09 PM »
I'm sure this guy for the Denver Post is a "media hack" but it looks like some other clubs are dumpster diving for Webb and Crain:

http://www.denverpost.com/rockies/ci_16729259

Offline PowerBoater69

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« Reply #20: November 29, 2010, 05:40:26 AM »
Did you actually read any of the financial statements linked in the Deadspin article?

Nope, but I read a number of articles that put the profit number much higher than what you listed.  The Marlins are also under fire for only paying $150 million toward the building of their new ballpark, which makes Lerner's deal look even sweeter.

http://www.miamiherald.com/2010/08/25/1790865/outrage-simmers-over-marlins-stadium.html
http://www.nytimes.com/2010/08/24/sports/baseball/24pirates.html

Offline Evolution33

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« Reply #21: November 29, 2010, 07:30:34 AM »
Did you actually read any of the financial statements linked in the Deadspin article?

On revenue of $136m, Marlins had net income of less than $4m.  Hardly rolling in the dough, and the Marlins reported player compensation of a mere $43m, showing there are significant other expenses in running a ballclub that people tend to forget about.

Furthermore, they ended 2009 with only $3.4m in cash, hardly a large amount for a business that also reported $17m in accrued payables, current liabilities and player bonuses. 

The Marlins statements revealed a business with thin margins and a need to manage expenses and the timing of payments closely, with narrow margin for error (such as missing revenue forecasts).

Speaking of other expenses I would love to see the electric bill for a ballpark.

Offline Evolution33

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« Reply #22: November 29, 2010, 09:03:31 AM »
http://sports.yahoo.com/mlb/news;_ylt=AqZ8pkqzDWSCSKcjfHqbBqURvLYF?slug=jp-hotstoveresetdodgers112610

I am putting this here because I think it is important to look at the list of remaining free agent starters at the bottom. With Vazquez now off the list the only guys that aren't trying to come back from injury are Lee, Pavano, and De La Rosa. Lee most likely won't come here, most fans don't trust Pavano to stay healthy, and De La Rosa is an overpay according to most experts. So really it looks like the choices are to take a flyer on a former ace like Webb or Penny and hoping they get healthy or to do nothing.

Trading might be the best way to go, but that market has yet to really develop so that we know who is available outside of Greinke.

Offline tomterp

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« Reply #23: November 29, 2010, 10:19:21 AM »
Nope 

Then I suggest you do so before commenting.

I read a number of articles that put the profit number much higher than what you listed. 

Why would you place any credence in second hand speculation when the actual statements are available?  Many, if not most, "journalists" share a cultural aversion to math or related topics, and you should place very little stock in the partial, incomplete and/or misleading numbers they might present.

As an FYI to you and others who have been misusing the term "balance sheet", the balance sheet is one of the four primary financial statements, and presents the major components of assets, liabilities, and equity as of a specific point in time (say, October 31, the end of the Marlins' fiscal year).    It does not present the revenue and expenses for fiscal period, because that job is directly addressed by the "Statement of Operations", (or "Statements" when more than one period is presented).   This statement is also synonymously referred to as the "P&L", for Profit and Loss, or "Income Statement". 

In the case of the Marlins or any other team, a 3rd statement is also highly relevant and informative - the "Statements of Cash Flows".  This can provide insight into where the money is coming from, or going, to conduct operations.  Are owners being forced to sustain operations through cash infusions?  Or are they withdrawing tens of millions in profits?  How much is going towards the new stadium?  Etc. 

Additionally, there are over 35 pages of notes to the financial statements, which can provide context and additional useful information, a drill-down into topics of interest.

Online HalfSmokes

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« Reply #24: November 29, 2010, 10:27:44 AM »
My problem with all of these statements is one of the largest liabilities is debt, and one of the largest expenses is servicing that debt. call me a pinko commie or whatever, but this reminds me of a leveraged buyout being used to take over a perfectly healthy company then slowly killing it with the cost of servicing the debt