Brewers profit in 2011?

[liveforoctober]

Hello people who know numbers.

I saw the little blurb on the interview with Attanasio about $$ and playoff payouts and everything and Attanasio didn't answer any questions really. I became really curious as to accounts receivable and payable for the Crew for the 2011 season. Does anyone have any projections?

Also, beyond the regular season, is there a projection to how much each post season series will bring into the team? Are there past seasons to pull that sort of info from? I'm just curious as to whether this season simply allows us to keep our payroll about where it is or if we will be able to raise it a touch.

[logan82]

They will probably lose money according to Schlesinger. At least that is what they said before the season.

[RockCoCougars]

I'm sure that their accountants can and will make the books show a loss for the year.

[endaround]

The Brewers have been rolling in money. They likely will again. Keep in mind they get a large chunk from the league now.

[thebruce44]

Since the books are closed, this is about the best we can do short of Mark's past comments and guesswork from fans:

 

http://www.forbes.com/lis...ukee-Brewers_337147.html

 

Forbes shows little operating profit for them compared to the rest of the league. Last year, with their increased payroll due to sunken costs in Hall and Looper, they expected to lose money. This year the payroll went back to the low 80s while they drew 3 mil fans so I expect they will be right back in that $10 mil profit they are always in. Next year when the new TV deal kicks in, and with increased season tickets, they should be able to raise the payroll to at least $90 without the possibility to lose money if they collapse.

[kramnoj]

The team financials that were leaked from other teams is probably going to give us the best information. For example, we can look at the Angels information as seen here http://ca.deadspin.com/56...cial-documents/gallery/1

 

(Please note, the documents themselves are fine, but the site is Deadspin, so other posted stories aren't family friendly.)

 

 

 

The 2009 Angels had $12M revenue just from the playoffs. That team had Net Income for 2009 of $10.7M. They certainly aren't an exact match, but I thought they might be the closest comparison to this years Brewers.

[WV Brew]

A little bit off this topic, but the Brewers spent $890,597 per win (using the USAToday numbers). This was good enough for 10th best in MLB and the best among teams with equal or better records.

 

Top 5 were TB, KC, Ariz, Clev and Pittsburgh.

Bottom 5: Yanks, Red Sox, Twins, Cubs and Phils. Always good to see the Twinks and Cubs in that category.

 

The Yankees spent $2,089,578 per win. Red Sox, Twins and Cubs all spent more than $1.7 million per win to not make the playoffs.

[brwrsfan]

The further we go in the playoffs, the more money we make. I fail to see with attendance at an all time high, making the playoffs and selling tons of merchandise how this team didn't make money this year. Seems almost impossible.

[rluzinski]

The further we go in the playoffs, the more money we make. I fail to see with attendance at an all time high, making the playoffs and selling tons of merchandise how this team didn't make money this year. Seems almost impossible.

If they can't make money when they make the playoffs with an $80 mil payroll, they never will.

[RockCoCougars]

Depending on how they decide to depreciate the new scoreboard and other improvements at Miller Park, they likely could turn a small profit into a loss as far as the books and the IRS are concerned.

[JUNT4twan]

So, do baseball owners do whatever they can to cover up profits through accounting practices, even though they really actually made a good chunk of money? It still amazes me that every owner in professional sports refuses to disclose their books while they continually complain they are losing money. If ownership is such a money-draining effort, I highly doubt these people would be in the business.

[thebruce44]

So, do baseball owners do whatever they can to cover up profits through accounting practices, even though they really actually made a good chunk of money? It still amazes me that every owner in professional sports refuses to disclose their books while they continually complain they are losing money. If ownership is such a money-draining effort, I highly doubt these people would be in the business.

What business doesn't do this. In the past we have been given a relative figure for opening day payroll where if they do well and sell out the second half they can go up to $86-87 and probably still pull in a $10 mil profit. We've also been told that a $90 mil opening day payroll means they could to lose money.

 

Thats probably the best we can do, but I don't think there is any reason to think the owners are in this for a yearly profit. They are all successful business men and are sitting back watching the franchise value skyrocket should they ever choose to sell.

[Invader3K]

Yeah, sports owners traditionally make their biggest money when they sell the team. Year to year, I don't think someone like Attanasio is pocketing huge sums of money from the team's profits. Most of that money gets reinvested in the ball club.

[foamboy1]

They will make money this year - how much will be dependent upon their run into the postseason.

 

They have made money every year since Attanasio has acquired the team - at least in cash flow. The "value of the player contracts" at the time of the transaction can be amortized over some period of time - I think it's four or five years now. So "losses" can be claimed/manufactured/taken if necessary.

 

I would estimate the team was in line to make about 10 million or so before this playoff run, maybe a bit higher.

[SoCal Brew Crew Fan]

I'm not so sure the playoffs are such a windfall. The players do get their cut of the revenues and I believe much of the revenues are split among the teams.

 

The Brewers are probably a breakeven operation after financing costs. Mark A and the ownership group deserve a ton of credit for plowing most the revenue gains back into the team and the fans deserve a ton of credit for attending, spending and in the case of the stadium subsidizing....this doesn't happen without all sides pulling their weight. The ownership group has probably made a fair amount of money on paper through appreciation of the value of the team and through debt paydown which has enhanced their equity...and they deserve it. They put their capital at risk when they could have bought something else and so far it has worked out.

 

If the owners were just in it for pure cash flow for themselves, they would be better off following the Marlins or Dodgers models...take the rev share or the TV money and pocket it. They haven't done that.

[kramnoj]

Here is a good breakdown of how playoff revenue is split: http://www.boston.com/spo...fs_not_ticket_to_riches/

 

In the best-of-five divisional series, 60 percent of the ticket revenue from the first three games goes to the players from both teams, who decide how to divide it among themselves and some other team employees. Another 1.6 percent is collected for the umpires. That leaves 38.4 percent of the gate revenue to be split evenly between the teams.

 

That figure will drop the closer the Sox get to the World Series; in the American League Championship Series and World Series, players get 60 percent of ticket sales from the first four games.

 

....

 

The commissioner's office also gets a 15 percent cut of ticket sales from the World Series.

...

 

Players for the 2006 World Series champion St. Louis Cardinals split more than $20 million, with 48 players and team employees getting full shares of $362,173 and 23 others getting undisclosed "partial shares." The American League champion Detroit Tigers divided a pool of $13.3 million among 39 people who got $291,667 each. Fifteen others got lesser amounts.

 

By comparison, the Cardinals and Tigers took in just shy of $6.8 million each from the entire playoffs.

[Roderick]

If they can't make money when they make the playoffs with an $80 mil payroll, they never will.

I don't think that is close. I have $94M on the 25 man roster. The biggest difference may be that some sites don't pick up Braun's $10M signing bonus. Add: injury and September callups ($1M), Parra/Stetter injury, buyouts ($4M Suppan, Davis, Zaun, Hoffman, Riske). So I see $100M

[Roderick]

selling tons of merchandise

Are we sure each team retains its own licensing money for its merchandise, or does all of MLB pool the revenue and then split it back to the teams? Because if it is pooled then it really wouldn't be a windfall for the Brewers.

[kramnoj]

I've heard that teams get to keep most, if not all of the money from merchandise it sells in it's team store, but stuff at other locations is split between all clubs.

[JohnBriggs12]

There is a tremendous amount of costs in running a team other than player payroll and these can vary significantly from year to year. You have payroll for management, coaches, administrative personnel, stadium workets, etc, signing bonuses for draft picks, travel expenses for flying, and lodging, costs with spring training, minor leagues etc and no they don't keep all the money from merchandise it sells in a team store. They have to pay the companies that supply the merchandise and the clerks that work in the stores.

 

A long playoff run will be very beneficial.

[kramnoj]

no they don't keep all the money from merchandise it sells in a team store. They have to pay the companies that supply the merchandise and the clerks that work in the stores.

 

I guess I could have included the word profits, but figured it would assumed in the context of the last part of the sentence when compared to merchandise sold outside the stadium.

[monty57]

One of the accountants on here can correct me if I'm wrong in any of this, but here's my understanding of things:

 

The Brewers are set up as a limited partnership, so the General (or Managing) Partner - Attanasio - makes the decisions, but all partners split the profits (or losses) according to their ownership percentage. In other words, if the Brewers make a profit or loss, the owners claim their share of that profit or loss on their taxes. Most of the partners are likely high income earners, so they actually like the team to show a loss every now and then which they can write off of their income, as long as they are reasonably certain they will eventually garner either increased future income, or a larger long-term capital gain, which is taxed at a lower rate. For the first years of the new ownership, they put a lot of money into ballpark improvements which would allow for increased future revenues (the extra seats on field level in RF, the advertising "ribbons" LaRussa likes so much, the NYCE club, etc).

 

The bottom line is that the organization is a private company, so unless they tell us, we won't know what their books look like. However, I think Attanasio & his group know how to run a business and make money, and (importantly for the fans) realize that putting a good product on the field is one of the best ways to increase (now maintain) their revenues.

 

Finally, the new TV deal will help boost annual revenues, and therefore will likely mean a bump in payroll (if past history means anything). The playoff money will be a one-time thing, so I'd be pretty cautious about counting on that to boost future payrolls (at least beyond 2012).

[logan82]

Playoffs usually mean an increase in attendance and TV/radio revenue. The TV and radio deals are locked up for a while and I think attendance is close to maxed out so the increased revenue from making the playoffs most teams experience is probably a one time thing for us.

[Roderick]

I've heard that teams get to keep most, if not all of the money from merchandise it sells in it's team store, but stuff at other locations is split between all clubs.

So you are saying that the year-round sales from Kohls, Shopkos, etc is pooled. I know the Brewers make a hefty profit on the stadium stores, but that must be chump change considered to the national licensing. So I assume the Brewers won't be pulling in millions over what they budgeted as merchandising revenues.

 

Likewise, they also don't see a drop in merchandising revenue when the wins (and clothing sales) are down.

[MJLiverock]

I found one article stating that as of late July MLB reported sales of Brewer Merchandise were up 12% over last year.

 

I found an old ESPN article from 2007 that mentioned two items I hadn't seen spelled out before, each team contributes $5 million annually to a pension fund, and each team adds $5 Million to the Commissioner's fund( or MLB operations depending on the name) annually. But they added this bit of information

 

Central fund (includes national TV, radio, Internet, licensing, merchandising, marketing, MLB International money): Each team, from the Marlins to the Yankees, gets the same central-fund payout. And that check comes to slightly over $30 million per team if you deduct the $10 million in pension and operations fees, or just over $40 million if you don't.

 

Here is a great little article from Hardball Time attempting to quantify the value of team (his example is actually the Brewers) http://www.hardballtimes....ue-of-ball-clubs-part-3/