Does anyone else think we just pocket the money we are saving?

[Mass Haas]

You make an interesting point with this line: What am I missing here? We were 9th in attendance this year, drawing over 3 million fans, yet we rank 17th in payroll of all teams. That gives us about the 3rd lowest fan attendance/payroll ration in the big leagues, making us slightly less cheap than only the Marlins and Padres. Where is all this money going???

I hope when all you local folks factor in 3 million in attendance, you're working with figures that include one of the best overall bargains in ticket prices in all of baseball.

I can promise you that the Red Sox have never had a bobblehead giveaway (or any giveaway of any substance for that matter). There are no discounts when you fill up at the local gas station. There are no budget plans of any sort -- weekday games, April nights, nothing.

Now obviously the Boston market is an extreme example. But you've got it really good there in Milwaukee, I promise you.

3 Million is Awesome! Great job, Brewer fans! But no way does 3 million = 3 million all across baseball.

[Bucky370]

I know he gave up too many homers but say we give Randy Wolf a multi-year, multi-million dollars deal, does anyone think that he will be a significant upgrade over Looper.

 

I have been advocating for Wolf for a couple years now. He has always been a good pitcher whose value was diminished because of injury a few years ago. He has been injury free for some time now and could be had at a reasonable price for his value. I also like the idea of another lefty in the rotation. That helps relieve the workload on the loogys so they are ready to go all year long.

 

A really quick estimate suggests that 90 wins is going to take some overachieving and/or luck, IMO. Maybe the Cardinals and Cubs both fall flat on their face and each win 84 games.

 

I realize you are doing a quick estimate but I think you are underestimating what impact the defense will play. According to the fielding bible rankings Gomez is rated he second best center fielder in baseball. Cameron for comparison is ranked 7th. Hardy was not rated in the top ten at short so I think Escobar will be an improvement there as well. link

 

The cubs are a team with some big contracts to older players with diminishing skills. They over paid for some players wiht the hope of winning in the near future but didn't. Now they have these players who still have to be paid and are going to play but the best that can be hoped of form them is to stay as good as they have been. Which wasn't all that good.

The Cards have to retain all their free agents to remain as good as they were last year or find comparable talent elsewhere. Given the fact they traded away a lot of their minor league talent last year they will have to do so without major help form their system. That means free agency. If they can't retain their free agents they are unlikely to get better ones in FA. They will need to get a little lucky in finding a reclamation project or two if they hope to repeat what they did this year.

You are absolutely correct. Not to mention the differences in TV revenues from Say Boston or NY to Milwaukee and regular advertising. The combination of the low ticket prices on average, and the other revenue sources will not put Milwaukee = to #9 in revenue in baseball. I will admit though, I'd love to see their financials, but being under private ownership, their in business to make money and keep their info private.

 

Some of you forget the days of Selig, or are too young to know. Those were the cheap years, being #13 in payroll is a far cry from being #30 every year!!

[rluzinski]

While I'm sure Mark A. is making money, the kind of analysis being used here to prove he's raking in the cash is way too simplistic. Much of the necessary information to estimate such a thing simply isn't available. Forbe's probably does the best analysis and even they must have to do a lot of guestimations.

 

In the end, the Brewers' ownership group is trying to maximize short and long term profits. If they can do that by spending $85 mil a year and pocketing the rest, they will. Do people expect anything else?

[MJLiverock]

Because TV money is what drives payroll differences more than attendance. I'll look for the link but I just read something yesterday talking about the inaugral season in Miller Park with 2.8MM in attendance and what the revs were. I was looking for info on merchandisng revenue because I figured it probably isn't that much and I remember in that year the Brewers made $14MM on merchandising. Even with the team being more popular today what do you think things like merchandising bring in? I don't know for sure but I doubt it is as significant as many think, maybe $20MM? People tend to think of a $50 sweatshirt as all going to the Brewers when they probably only get a few dollars of that amount.

 

If the average ticket is $30 x 3MM fans is $90MM of revs from tickets. Parking and concessions are run by third parties IIRC. So in the Brewrs case if that $90MM covers payroll then the roughly $30MM from TV and say $20MM from merchandising plus sponsorships have to cover the overhead like travel, Miller Park Expenses, Minor League operations, scouting, taxes, debt service,etc. They probably get some revenue sharing from the luxury tax and national TV rights but I doubt there is the big profit of money flowing throught to the bottom line.

 

They are 17th in payroll because that $30MM the Brewers get from local TV is dwarfed by the local TV contracts of the big market teams ahead of them on the payroll list. There is probably some wiggle room up or down for the Brewers but they could lead the league in attendance every year and still have no where near the money to spend as the Yankees, Red Sox, Cubs, Dodgers, etc. It is just a simple population function and there just aren't enough people in WI or Milwaukee in general to compare to megaplexes like NY, Chicago, LA even with 2 teams in those markets.

 

I do find it comendable that Milwaukee can draw 3MM fans. Anyone who says it isn't a baseball town because of the revenues just isn't thinking through the revenue factors. There is roughly 5.6MM people in the whole state and 3MM walked through the turnstiles at MP. The whole Milwaukee area is about 2MM people to draw from without it being a 1.5 hour drive. Compared to NY with about 19MM people. The Yankees ought to be able to fill a 100,000 seat stadium every day given that huge poplation base and supposed great baseball fans when compared to the Brewers.

[Invader3K]

I think there's truth on both sides. No one here really knows how expensive it is to run a baseball franchise in Milwaukee. Beyond just the $80 million in MLB team payroll, they also have to pay draft picks, pay for scouting and development, pay all their employees, etc.

 

It would definitely be really interesting to see both sides of the ledger.

[joepepsi]

A lot of this would be cleared up if MLB and its teams opened their books to the public. It's easy to suspect they won't because the public would find even the smallest markets are doing just fine financially and diverting more cash to their investors than the average fan would like. Even if the books are cooked until profits are thoroughly steamed out, we can rest assured plenty of people in MLB are making plenty of money.

[RobertR]

Jayson Stark takes a look at this over at ESPN. See http://sports.espn.go.com/mlb/columns/story?columnist=stark_jayson&page=rumblings091119

 

I think more analysis is needed for these numbers, but I think it certainly points to the idea that there are teams turning a solid profit out there. Then again, I'd have expected a team like the Pirates to sell if they weren't turning a profit by now, since they're not getting a newer stadium than the one they already have.

 

Robert

[endaround]

The point is the Brewers turned around less due to the change in ownership and more due to revenue sharing. The Seligs were running a shoe string operation borrowing for the first 2 months of the year to make payroll before the TV money came in June (and how stupid is MLB to do it that way?). This isn't to say the Seligs didn't screw things up from the day Bud decided to become commissioner and let the team flounder for 10+ years. But the market size isn't the hinderence it was in the late 90s and early 2000s.

[RobertR]

I'll add that there are lots of things to be said for long term stability of ownership, which being able to turn a profit encounrages. At least if they're competent, which Mark Attanasio seems to be and Wendy Selig-Prieb seemed not to be. There's more to being a good owner than spending money on free agents. Marketing, helping decide long term strategy and supporting it, and hiring the right people for baseball operations, to name a few things.

 

Robert

[Roderick]

Yes - I think the Brewers pocket too much money - just blogged about it. $80 million is way too low for this year again.

Where is the $80M "again" coming from? The Brewers were probably mid $90M for just the major league club after adding in all the stuff that comes after opening day roster like Lopez, Weathers, callups, etc.

 

And I do agree that the Brewers 3M attendance is not the same as another team's attendance. If you want to figure revenue by attendance across the league you better find an average ticket price, and the Brewers aren't going to touch the bigger cities price they can charge because of demand and cost of living in Boston, New York, San Fran, etc.

[nate82]

You have to remember that all of this money also goes to stadium upgrades, maintenance, and other things that do not show up on the payroll. Player payroll maybe only 13th in the league but that is ignoring every other expense that the Brewers organization occurs. Ticket prices for the Brewers is cheaper than that of what you have to pay to see a game in New York or Boston or any other city.

 

A lot of people complain when the ticket prices for the Brewers go up a dollar or two. There is no comparison between Milwaukee and a major city in attendance.

[RobertR]

You have to remember that all of this money also goes to stadium upgrades, maintenance, and other things that do not show up on the payroll. Player payroll maybe only 13th in the league but that is ignoring every other expense that the Brewers organization occurs. Ticket prices for the Brewers is cheaper than that of what you have to pay to see a game in New York or Boston or any other city.

Let me add to this. One of the things that I'll never, ever forgive previous ownership for was how dirty and ill maintained County Stadium was in the last few years. Not keeping the place at least clean was, in my mind, pretty contemptuous of the paying customer and showed precisely where their priorities were. That was a cheap organization that was second class in every way by the end. Attention to detail and customer service is one thing the new organization really gets. The Brewers aren't going to win every year, but they can control the customer experience in all other ways and, so far, the Attanasio regime has been first class in that regard. It probably costs them extra, but I, for one, appreciate it.

 

Robert

[endaround]

They gave up maintaining County Stadium in order to show they needed a new stadium and when the financing went through they cut back even further.

[MJLiverock]

To be fair the expenses for the big city teams run higher as well offsetting some of the higher ticket prices. Everything costs more in NY vs. Milwaukee from groundskeepers to city taxes. It is another of the things people tend to forget when comparing cities and bemoaning the prices of tickets and trying to compare apples to apples. I would bet that as a percentage of income the higher prices for tickets in NY aren't any higher than in Milwaukee. Just using a simple cost of living calculator at bankrate.com yields an equivalent wage of $50,000 in Milwaukee to $88,000 in Brooklyn, $78,000 in Queens, and $107,000 in Manhattan. At the same time the utilities are about 25% higher in NY vs. Milwaukee so just keeping the stadium lights on cost them substantially more.

 

On a side note on why owners own a team if they dont' make a lot of money. I always think about it like owning a highly coveted piece of real estate like say on a lake. There is a very limited number of teams available so the owners may not make a lot of cash flow in any one year but over time as the value of the team increases due to scarcity of the resource and the sell the team down the road for 2x or 3x what they paid for it, that is where the money is made and why some of these small market teams are good buys.

[Baldkin]

team	marketing	research
	Avg.	Pct.	Avg.	Premium	Soft	Hot	Pct.
Team	Ticket	Change	Ticket	Beer2	Drink2	Dog	Parking	Program	Cap	FCI	Change
NYY	$72.97	76.30%	$510.08	$6.00	$3.00	$3.00	$23.00	$5.00	$25.00	$410.88	49.40%
Boston	50.24	0.30%	162.82	7.25	4	4.5	27	5	20	326.45	0.20%
Cubs	47.75	10.00%	239.44	6	3	3	25	5	20	305	18.60%
NYM	36.99	8.60%	149.54	5	3.5	4.75	18	5	20	258.97	3.10%
CWS	32.28	6.60%	64.98	6.5	3	3.25	23	4	13	224.11	4.40%
Philadelphia	31.1	10.00%	65.86	6.75	3.75	3.75	12	5	15	219.9	10.20%
Washington	30.63	-7.10%	192.89	6	4.5	4.5	5	5	15	215.52	-4.70%
LAD	29.66	0.00%	222.38	6	3.5	5	15	5	16	221.64	0.00%
St.Louis	29.43	0.40%	64.38	7	5	4	10	2.5	16	214.72	-1.20%
Houston	28.73	3.60%	48.41	5	4.25	4.75	15	4	13	209.93	5.00%
Detroit	27.38	8.30%	69.74	6.25	3.5	3.5	15	5	15	205.02	7.80%
MLB AVG	26.64	5.00%	96.93	5.92	3.44	3.7	12.4	3.72	15.03	196.89	3.20%
Seattle	25.53	0.00%	58.61	5.25	3	4.25	17	3	10	184.62	-5.10%
Oakland	24.31	-3.40%	50.46	5.5	2.5	3.5	15	5	15	187.23	-1.80%
Baltimore	23.42	-1.80%	42.86	5	2	2.5	8	5	12	163.68	2.40%
San	23.28	-2.40%	64.23	8.75	3.75	4.25	20	5	25	222.63	-1.90%
Cleveland	22.12	-3.10%	61.62	5.5	5	4.25	12	1	15	180.49	-1.50%
Minnesota	21.7	5.00%	119.41	6.5	4	3.5	6	2	15	169.81	7.40%
Milwaukee	20.98	5.50%	38.65	5	2.25	2.75	8	0	12	145.92	3.10%
LAA	20.05	-3.50%	62.06	4.5	3	3	8	3	6.99	141.18	-2.00%
San	20.01	-27.00%	46.39	6.5	4.25	4	4	5	16	172.04	-14.70%
Colorado	19.5	0.00%	36.5	5.5	3.25	3.25	8	5	14	161	0.60%
Texas	19.41	6.80%	53.44	5	3	2.75	8	4	12	150.64	-0.10%
Kansas	19.38	13.30%	87.38	6	4	4	6	5	12	161.52	6.90%
Cincinnati	19.19	-1.10%	62.06	5	1	1	12	4	15	144.76	-8.60%
Toronto	19.1	3.50%	55.13	5.4	3	3.8	12	4	15.99	166.39	4.40%
Florida	19.06	2.00%	70.36	7	3	5	8	5	15	170.24	3.60%
Tampa	18.35	6.50%	59.82	8	5	5	0	0	18	165.4	20.80%
Atlanta	17.05	0.00%	44.98	6.75	4.25	4.25	12	0	15	157.69	0.30%
Pittsburgh	15.39	-9.90%	42.67	4.75	2.5	2.5	10	5	12	135.06	-4.10%
Arizona	14.31	-10.30%	60.7	4	3.5	2.75	10	0	7	114.24	-29.80%

[Baldkin]

Sorry for the double post. Every time I tried to edit, it messed up the formatting.

 

Anyway... above is the market research for the pre-2009 season. You simply cannot compare the Brewers 3 million fans to the Yankees 3 million fans or the Red Sox or the Cubs or... whomever else.

 

The Brewers have shown they are unafraid to add salary to make a push during a given season (CC, and Lopez/Weathers) spending right up to their limit would cripple their ability to do just that.

[kramnoj]

If anyone is interested in seeing an example of the total cost of non player expenses, this article gives some outdated information: http://www.baseballprospectus.com/article.php?articleid=1325

 

This article is from 2002, and the least that teams spent was $35M and there were a few that spent over twice that much. The lowest percentage seems to be about 31% of operating revenue, and 2 teams were over 75% of that.

[logan82]

I think part of the Yankess deal with the city included not having to pay taxes on the property for the stadium. That was included at one point. I am not sure if it was in the final deal.

[sbrylski]

Wasn't there a report out in the last six months that said the Brewers got the most dollar per metro resident out of their fanbase?

[hawing]

Wasn't there a report out in the last six months that said the Brewers got the most dollar per metro resident out of their fanbase?

I don't remember for sure, but I firmly believe our non-metro household contributed enough to the Brewers to cover a few metro residents.

[BrewersSuperCollector]

I'm pretty sure the Cardinals are at the top every year with attendance per capita.

[logan82]

St. Louis is a pretty small market. Much larger than Milwaukee, bu still pretty small.

[HiAndTight]

No we aren't up to 25 million to spend, you must also figure in the raises to everyone currently under contract

You must also figure that the Brewers were willing to spend more money last year, but were simply unable to add a starting pitcher.

 

They've also had steadily rising revenues.

 

It's anyone's guess as to what they'll actually spend, but I don't think it's difficult to imagine the Brewers spending 20 million this off-season.

[HiAndTight]

Wasn't there a report out in the last six months that said the Brewers got the most dollar per metro resident out of their fanbase?

Yes there was. I don't recall where I saw that, but I know exactly what you're talking about.

 

I think this next season is going to be very, very telling for the financial future of this franchise. Do the Brewers draw 3 million? 3.1? If they can do that coming off a poor year, it will, IMO, give management the confidence to go out and spend next year when the three amigos come off their payroll.

 

If they sink to say 2.4, 2.5 we're obviously going to have to make some cuts.

 

I guess I have the confidence that the Brewers will continue to be a big draw and with a little bit of luck can find ourselves back in playoff contention next year.

[snyttri]

?I'm pretty sure the Cardinals are at the top every year with attendance per capita.?

 

Local Cardinals fans are very supportive but they still benefit from having earned fans in a number of states in earlier decades while the Brewers are pretty much limited to Wisconsin. On the other hand large metro area teams like the A's and White Sox have limited fan bases because most metro residents are loyal to the other baseball franchise. The White Sox, unilke the Brewers, seem to be incapable of drawing 3 million.

 

Here is interesting an article on baseball economics by a part-owner of a Padres minor league team who also sits on the Padres Board and teaches Sports and the Law at UCSD Law School. It centers on why a cap will not work.

 

http://tinyurl.com/ycsmjyy [Open in new window]

 

?I challenge you to come up with a salary cap structure that will work in a league where the Yankees have revenues of $375 million (not including their revenues from owning the YES Network) while the Marlins have revenues of $139 million. How much should they spend on players??