Slow moving FA market, collusion?

[twobrewers]

Profit can come before expenses and after expenses.

Really?

 

If you are going to argue the definitions of words - how about using a dictionary?

 

Profit: the excess of returns over expenditure in a transaction or series of transactions ; especially : the excess of the selling price of goods over their cost

 

Income is all the money you take it. Profit is what you make after expenses.

 

(You fellas have quite a few errors in your logic and definitions - but I don't really want to turn this even more off topic that it already is)

[MNBrew]

And MLB owners take on almost no risk. They get their stadiums paid for and the league would never allow a team to go bankrupt again, they'll pull an Expos first.

Whew. I think you're painting with an extremely broad brush. I believe the blame is mutual and with the balance really somewhere down the middle. I'm not suggesting you're wrong for casting stones at the owners. But such broad-brush statements that suggest a total mistrust of the owners and total defense of the players don't give fair justice to the complex and thoroughly "gray area" issue that the MLB labor situation really is.

 

The owners have doled out plenty of foolish contracts over the years that they technically didn't have to give, to be sure, with any number of other questionable moves that would give most folks serious reason to question anything from their business acumen to their basic intelligence. At the same time, you can't blame any business owner for wanting to ensure a profit margin in any scenario. They didn't gain the financial wherewithal to become owners by being total financial dunderheads.

 

In all reality, the MLBPA -- first under Marvin Miller and then under Donald Fehr -- knows full well how strategically successful and dominant their grip has been on the owners. Not that the owners didn't still eventually sign the contracts. But when the players clearly had the upper hand, the owners knew eventually the players weren't going to come out on the short end of the stick. But the players and their union haven't always helped themselves, either. Yes, they've done an admirable job of bringing up players' salaries to levels reasonably in line with the revenues of the sport. But they've also been obnoxious about crying foul and using some of their highest paid members to protest quite publicly, and all in the name of keeping a lid off the top of the market, all while the less-well-off majority's well-being and best interests really weren't given much consideration. The MLBPA has evolved from a LABOR union (remember when B.J. Surhoff's rookie salary was about $38K? of course that still didn't count fringes & benny's like his substantial daily per diem or the cost to his owner for his medical care & insurance, work-related travel & lodging costs, etc.; but still, that was pretty small jing for the dough MLB was making) into an ENTERTAINMENT union with standards or at least stated negotiation points that should make any self-respecting LABOR union NOT want to consider themselves a related organization.

 

And on the later running discussion point, the fact is that any team's paying at least a few hundred employees at least something respectable over 80 games' worth of dates, plus lots of year-round staffing that never takes the field but who is completely essential for running a MLB team. The fact is, that's a whole lot of overhead you just can't throw aside when discussing gross revenues, net profits, expenses, and any other related terms.

 

Nate, I appreciate the passion & sincere thought behind your points. But I think you discredit yourself and your points when you ignore the dictionary and invent your own definitions, and even more so when your definitions are the opposite of the correct ones.

[phxMILWfan]

I try not to split hairs but how about just using the word that Webster and the rest of us use instead of the one you like to use. Profit is what you have left after expenses... that is what we all accept to be true. I don't mind if someone uses the wrong term here or there but the frustration you're showing over the rest of us not understanding led me to chime in.

[PKBadger]

As a finance major, this thread is making my brain bleed.

 

There is virtually nothing associated with ticket sales that is a fixed cost. For example, the Brewers could fire my account executive tomorrow, or they could hire more staff if demand warranted. They could buy less paper to print the tickets on if they found that more people were doing the "print at home" option, or purchase it from a different paper company that offers better prices (Dunder Mifflin?). These are variable costs.

[RightFieldCoder]

No that isn't a good comparison at all. A better one would be me growing some vegetables in my backyard and then selling them to you. I already pay taxes on the land I am using so it doesn't matter if I grow those vegetables or not I am still going to have to pay the land taxes anyways. 100% income right there from the sale of the vegetables.

But you had to invest money to buy the seeds. You also had to invest money or time into growing those seeds. This is very similar to the printing of tickets. The more tickets you sell, the more ticket brokers you need to have working and the more concessions you need to have running and the more parking attendants you need to hire. On Thursday afternoons not every concession stand is open (ie the one near the new kids area on the field level.), but they are open for every Cub, Twins, or weekend game. When the Angels and Indians played at The Keg, there was a large problem from understaffing which shows that increased attendance does require increased expenses.

[monty57]

Yes but I don't use income or profits when talking about gains or losses. Operating income and other defintions are what I use to define what the company has made or loss. Profits and income are one in the same to me. Income has a lot of definitions and different terms defining which stage it is in. Profit is money coming and income is money coming. They are both broad terms and are interchangeable. Profit can come before expenses and after expenses.

Nate, please understand that there are a number of bankers, accountants, financial advisors, etc that visit this site. If you are going to continue to argue the point, you have to note that the terms and logic you are using are not correct. Saying that in your mind profit and income are the same is like someone coming on this site and saying a base hit and an out are the same thing. Someone who understands the terms will try to correct the inaccuracy. If the attempt to correct the inaccuracy is ignored, some of our "brains begin to bleed" (to steal Kegstand's term).

I believe the concept you're going for is fixed costs vs. variable costs, but as kegstand mentioned, I don't think you're using it correctly. A fixed cost is something the Brewers will pay no matter what. If baseball were not to be played this year, the Brewers would still need to pay things like the rent for their facilities, salaries of retained staff, property taxes, etc. Varible costs are things that can, well, vary, and wouldn't necessarily be paid if baseball weren't played this year.

Regardless, all of the expenses need to be added up and all of the income needs to be added up, and the net result will be the profit or loss for the team. Parking is a component of their income and their expenses, but it is still part of the bigger picture. You are correct that there are areas other than ticket sales where teams make money. Please cede the point that there are also areas other than player salaries where teams rack up expenses.

[logan82]

Gross profit vs Net profit maybe?

[endaround]

No he's talking marginal cost. The marginal cost of an additional ticket is as close to zero as possible so P>MC. You do have costs that jump up with ticket sales , ie say you need 1 usher for every 2000 tickets sold above 20K.