Baseball Team Profitability from 2005-2006

[EastonBlues22]

Not my work, but an excellent short thread that I thought you might find interesting.

 

LINK

[NewUserName]

The Yankees spent 50 million more than they earned last year. wow. I know they are the most valuable franchise in baseball but at some point that is really going to hurt.

 

The Cubs were top ten in operating revenue without the luxury of a really good TV(partial schedule) and Radio deal that they could have if they bid them out. Probably no other fan base supports their team better.

[EastonBlues22]

The Yankees spent 50 million more than they earned last year. wow. I know they are the most valuable franchise in baseball but at some point that is really going to hurt.

 

The Cubs were top ten in operating revenue without the luxury of a really good TV(partial schedule) and Radio deal that they could have if they bid them out. Probably no other fan base supports their team better.

After reading the threads on this board the last two days, that choice of words kinda gave me a chuckle...but I don't argue that the Cubs have some very good fans. The reason why I read this board so often is because the quality of discussion is generally very good.

 

I also noticed that the Cubs owners were one of the ones spending below their predicted amount based on revenue...bottom ten if I remember right. Now whether that can be interpreted as a general stinginess on their part, or more optimistically as a predictor that they might be expanding payroll next year (a return to the mean so to speak), is a matter of speculation.

 

Regardless, I thought the discussion led to some interesting illuminations about relative profit for different clubs, and the stadium deals that different clubs have around the MLB. Good stuff.

[Warpticon]

I initially read this as "Baseball Team Profanity from 2005-2006" and figured the Cubs had to be at the top, easily.

[DivineBovine]

What do we make without the money laundering operation known as WGN? Explain how one of the most popular teams in sports with one of the biggest and most loyal fan bases in one the the top sports markets in the country makes less than the Padres and the Reds?

 

The Trib should sell the team then. Obviously they are completely inept financially.

[EastonBlues22]

What do we make without the money laundering operation known as WGN? Explain how one of the most popular teams in sports with one of the biggest and most loyal fan bases in one the the top sports markets in the country makes less than the Padres and the Reds?

 

The Trib should sell the team then. Obviously they are completely inept financially.

I'm going to guess that Wrigley Field itself has plays a significant role in that.

[minnesotacubsfan]

What do we make without the money laundering operation known as WGN? Explain how one of the most popular teams in sports with one of the biggest and most loyal fan bases in one the the top sports markets in the country makes less than the Padres and the Reds?

 

The Trib should sell the team then. Obviously they are completely inept financially.

I'm going to guess that Wrigley Field itself has plays a significant role in that.

 

Who OWNS Wrigley? Does the Trib take in all the proceeds from a game (ie Tix, concessions, etc?) Is there any money owed on Wrigley, or is essentiaully paid for?

[jjgman21]

Wrigley came with the Cubs when the Trib bought them. I'm guessing the only payment they have to make is taxes, upkeep, and renovations.

[EastonBlues22]

I didn't necessarily mean on payments owed, but more on the relative lack of revenue generating luxury boxes, smaller overall capacity, higher costs for upkeep due to its age, etc...

[RonnieWooWooSanto]

I didn't necessarily mean on payments owed, but more on the relative lack of revenue generating luxury boxes, smaller overall capacity, higher costs for upkeep due to its age, etc...

 

They also have very little advertsing(signage) compared to other professional teams.

 

The rotating advertising thigamajigga behind homeplate, Bud Light Bleachers and the Walter E. Smythe dugout. And the few advertisers(United Airlines and such) that appear on the electronic boards.

[Fro]

I didn't necessarily mean on payments owed, but more on the relative lack of revenue generating luxury boxes, smaller overall capacity, higher costs for upkeep due to its age, etc...

 

We're fine as far as capacity goes with the bleacher expansion

 

New Busch - 44,000

Miller Park - 43,000

Great American Ballpark - 42,000

Wrigley Field - 41,000

Minute Maid Park - 41,000

PNC Park - 38,000

[EastonBlues22]

I didn't necessarily mean on payments owed, but more on the relative lack of revenue generating luxury boxes, smaller overall capacity, higher costs for upkeep due to its age, etc...

 

We're fine as far as capacity with the bleacher expansion

 

New Busch - 44,000

Miller Park - 43,000

Great American Ballpark - 42,000

Wrigley Field - 41,000

Minute Maid Park - 41,000

PNC Park - 38,000

It's not just how many, but how many in what price range.

 

Anyway, like I said, I don't know for sure...it's just a guess as to why some of that expected revenue might be "missing."

[DivineBovine]

What do we make without the money laundering operation known as WGN? Explain how one of the most popular teams in sports with one of the biggest and most loyal fan bases in one the the top sports markets in the country makes less than the Padres and the Reds?

 

The Trib should sell the team then. Obviously they are completely inept financially.

I'm going to guess that Wrigley Field itself has plays a significant role in that.

 

Who OWNS Wrigley? Does the Trib take in all the proceeds from a game (ie Tix, concessions, etc?) Is there any money owed on Wrigley, or is essentiaully paid for?

 

That's the excuse that the Trib always uses. I don't buy it. The Cubs do well in attendance despite Wrigley and have high ticket prices. TV and radio always make up the bulk of revenue for any given team. Look at the Yanks.

[jjgman21]

there may not be alot of luxury boxes, but there is other streams of revenue. they have the rooftop revenue, ridiculous concession prices, 99% capacity at the second highest tickest price in all of baseball. also, if I'm not mistaken, all the licensing for Wrigley Field, as opposed to the Cubs, belongs to the Trib, not MLB. so every Wrigley souvenir, memorabilia, T-shirt, etc. puts a chunk of change in their pocket.

 

c'mon guys, the Trib is a corporation. if Wrigley wasn't generating plenty of money for them, what would any corporation in the country do? no corporation is going to keep an asset that houses another asset because the first asset is "good for baseball."

[LeftCoastCubFan]

Oh, noes! Just what the world needs now is another Cubs don’t spend enough/Tribune makes too much thread.

 

First, any chart that ranks the Yanks and Boston at the bottom of a financial ledger is very flawed to begin with. You really can’t include franchise value increases on a year to year basis as part of profit. They are just estimates, and can change quickly based upon current business conditions. Also, Forbes mainly based it on revenues. With revenues growing of course the franchise value increases.

 

My take on the Cubs revenues and expenses from last year:

 

89 mil in gate receipts

30 mil in shared MLB Revenues (national tv, internet, etc)

4 mil in shared merchandising (shared with MLB and MLBPA)

88 mil all other revenue (no real breakdown of this but includes local broadcasting, concessions, parking, rooftop fees, advertising, interest on bank accounts, and any other revenue)

 

-------

 

211 mil total revenues

 

117 mil in player expenses (including benefits and bonuses)

32 mil revenue sharing payment

54 mil other expenses (again no real breakdown available but it includes Wrigley maintenance, Baker/Hendry/MacPhail salaries, all employees salaries and benefits, travel, toilet paper, property taxes, utilities, debt service and all other business expenses)

 

-----

 

203 mil total expenses

 

=====

 

8 mil operating profit (pretax profit)

 

Nothing there is out of line, and nothing shows that the Trib is running the Cubs as anything other then at a break even enterprise. In fact if you take out the 2 New York teams and Boston which has revenue streams you can’t compare to any other teams, the Cubs had the highest player expenses last year then the remaining 27 teams. Spending has not been an issue; results have (on the field not the business).

 

The Yankees spent 50 million more than they earned last year. wow. I know they are the most valuable franchise in baseball but at some point that is really going to hurt.

 

Not as much as it seems. Steinbrenner owns 38% of the YES Network, so about 70 or 80 mil of broadcast revenues are going there so he is making money there. He has always been profitable until 2004 and likely 2007 where he’s taking a bit of a hit, but he knows he has a limited spending window. The Yankees will get killed in the next CBA. The 80 mil or so they give up this year in revenue sharing and luxury tax will look like chump change with the next basic agreement. That’s why you haven’t seen them tacke on long term contracts the last few years.

 

I also noticed that the Cubs owners were one of the ones spending below their predicted amount based on revenue...bottom ten if I remember right.

 

Explain this on to me. The Cubs were 5th in revenue and 4th in player expenses. How are they being frugal?

 

What do we make without the money laundering operation known as WGN?

Every big market team defers revenues to broadcasting outlets. For the Cubs it may be 10 to 20 mil a year. But with Boston it's 40. The Mets 50. The Yankees 80.

 

You can't blame the teams. They are not doing it now to avoid sharing it with the small market teams who are taking it for profit. They are paying teams in Pittsburgh, KC, Tampa, and Florida likely close to 40 mil each this year and they aren't spending it to improve the product.

[EastonBlues22]

I also noticed that the Cubs owners were one of the ones spending below their predicted amount based on revenue...bottom ten if I remember right.

 

Explain this on to me. The Cubs were 5th in revenue and 4th in player expenses. How are they being frugal?

Relatively speaking, they are more frugal than about 20 other owners (based on predictions from data in that thread) because they're underspending their predicted amount based on revenues by about 6.5 million. Boston is second in revenue and second in payroll...but they still don't crack the top ten in "owner generosity."

 

This thread was not started, nor ever intended, to be an indictment of the Cubs ownership. I just thought it was interesting.