Roy Oswalt?

[PrinceEatMeat]

Yep, Oswalt really only wants to play for St. Louis or Texas at this point. He said that all along. I don't see him signing anywhere else. It's just not a smart move from the Brewers standpoint either, mainly due to where the price will go. I'd rather give Estrada or a young pitcher like Peralta a shot than go with Oswalt. There's a point where you need to see what you have for next season. Signing Oswalt for anything beyond this season would also basically end talks of re-signing Greinke. I just don't see it as a Melvin type move to throw millions of dollars at a veteran starter mid-season. Especially when Oswalt has looked less than sharp last season. And HiAndTight, I have no idea who told you signing Ramirez wasn't going to happen. He had interest in the Brewers all along. The odds seemed pretty good of that happening. The K-Rod trade came out of nowhere in a sense, but again it's not like he was out there for a high price. Signing Oswalt just isn't something that Melvin will do. There have been no rumors of it, and Oswalt doesn't have interest in playing here.

 

 

Both were LITERAL quotes from Trwi when the idea of trading for K-Rod came up last year a couple months into the season, and with regard to Aram, it came during last trade deadline when it was suggested the Brewers may target him if he was willing to sign for 10-12 million.

No you have an "idea."

So...the whole, "not gonna happen," nonsense is just that. Nonsense. It may well be unlikely, but but things change. If we're 3 up in a month and someone goes down, while it may be unlikely, it's certainly not impossible that we go after Oswalt. Especially since I see little need for Texas, and if Oswalt at that time looks at the Brewers as a more viable contender with his addition, it's possible.

 

It's just this declaration of what will and won't happen on this board that's taken as fact that's a bit ridiculous at times. FF to June 1st. Carpenter's nerve injury has him out for the year, Waino is still struggling, Lohse has come down to Earth, they're struggling as a team(or they suffer other injuries as they're littered with players who have a high risk of injury as their core pieces offensively in Furcal, Berkman, Freese, Holliday as well as Lohse, Carp, Waino...).

 

See...Brewers lose Yo/Greinke for an extended period of time when they're up a few games in the Central, the Cards stumble and lose a couple of key pieces, none of which is the least bit far fetched, and the Brewers offer him 5 million for the second half....

 

If that scenario played out, there would be an almost 100% chance that he signs with the Cardinals, not the Brewers.

[Roderick]

And where will they get the money for this? Payroll is maxed out and then some. Not happening.

 

Payroll NOT maxed out as Melvin recently stated, and they're coming off a year in which they made nearly 20 million dollars, are looking at an additional 20 in TV revenue, are well ahead of last years pace as far as attendance goes and that's with an increase in ticket prices and parking costs.

 

The Brewers constantly talk about being maxed out and it seems every time they end up with a very solid net revenue, and at the point we're at right now, we've got more money to spend than we've had in a long time.

 

You contradict yourself here. Melvin said they are not maxed out in one paragraph and in the next you say the Brewers constantly talk about being maxed out. Which is it?

 

I assume when you said "net revenue", you meant net income (revenue less expenses). If so, I would like to see where there has been an article that said the Brewers made money the last few years. I am kind of thinking that they probably have lost some money in operations (net income / cash flow), but increased the sales value of the franchise. Which a savvy guy like Attanasio would understand and finance. Which would lead me to believe the Brewers would go more on payroll in 2012 knowing they would have a deficit, but that longterm the value of making the postseason would make up for it.

[endaround]

Forbes had the Brewers at $19.2m in net revenue last year and the Brewers admitted they were profitable. Attanasio has being making a serious amount of operating income off the Brewers.

[monty57]

They had a lot more than $19.2MM in net revenue. Revenue is "money in." If they only had $19.2MM in net revenue, they would barely have been able to pay Prince.

 

Doing a quick search, what Forbes said is the Brewers had $19.2MM of operating income and a team value of $448MM. Operating income is earnings before deduction of interest payments and income taxes (EBIT). After paying their interest (they owe a lot on Miller Park and probably still owe on the purchase of the team, so their interest paid is probably substantial), if the Brewers were profitable they then would have had to pay taxes on that income, so if they indeed made money last season, it probably wasn't much.

 

HiandTight, you accuse people on this site of speaking in difinitives and calling that "ridiculous" and "nonsense," but you've posted this incorrect information multiple times in several threads while calling it difinitive fact. We're all here to enjoy ourselves and talk Brewers. Sometimes that leads to all of us saying ridiculous things or mis-stating facts, so let's make sure we keep everything nice.

[3and2Fastball]

Team value of the Brewers now as compared to when Mark A bought the team is considerably higher. No doubt that the experience of being the Brewers owner is a profitable endeavor.

 

But even if they do have money to spend, I wouldn't spend it on Oswalt. Too many age/injury concerns

[HiAndTight]

Maybe Melvin could sweeten the deal with some Wisconsin farmland or a shiny new vehicle from Oshkosh Truck

 

http://sports.espn.go.com/mlb/news/story?id=2265422

 

Seriously, if Oswalt can still pitch, he could be a possibility later this season. I doubt we'll want to spend the money (or if we even have the money to spend), but anything can happen, so it's not out of the picture that we'd sign Oswalt for the second half of the season. If Oswalt's healthy, it would be like making a big mid-season trade without giving up any talent in return.

 

With the Narveson injury, we could be heading into next season with only one returning starting pitcher, which could really make this an "all in" year. If that's the case, I could see Melvin/Attanasio emptying the coffers to do everything they can to win in 2012.

 

 

 

I understand and agree with most of your points, but these is this idea, put out there by Mark A namely, that the Brewers have their feet planted squarely on that black and red line.

 

By all indications, that's not true.

 

I've said this a dozen times, but after spending 95 million last year, they made 19.2 million dollars.

They've raised ticket prices nearly 10 pct, they're drawing better this year, breaking every attendance record for every milestone that passes them by, and they have a new TV deal which adds 20 million in revenue, and a new radio deal kicking in next year. Not sure how much that will add.

 

But with nearly 20 million in profit from last year, 20 million in TV money coming in, nearly 10 pct more in ticket revenue even just at last years standards, a standard they're passing pretty substantially at this point...I don't see them having to empty their coffers.

 

Now I'd like to see Mark A and Doug Melvin go wild in the international market the next year or two before that is subjected to the international draft, and then pay off their debts(though that may not make fiscal sense as I know Mark A has generated income simply by re-doing his loans at lower interest rates 3-4 times already.

 

But as hard as this is to believe, even at 103 million, the Brewers are not at their payroll limit, and Melvin has recently talked about payroll flexibility, ie, the Brewers DO have room in their budget to add payroll.

 

I remember a discussion long ago in which I predicted 95 million for last year, 100 this year and then 110 by next year. I think people underestimate the revenue we're generating, as well as Mark A's will to win.

 

Of course I'm the same guy who thinks if Greinke leaves they should do a complete rebuild, slash their payroll, invest that into the farm system and take all their assets that aren't long term pieces and move them to help their rapid rise in the farm system rankings...which by the way, after a full season of Hall and then Thornburg at AA and AAA bringing the scouting community around to the nonsensical idea that he's not a good athlete and that he can't make it as a starter...along with Bradley and Jungman, I think our system will be closer to the top 10 than the 23 they're at right now. Not to mention Scooter continuing to absolutely rake. Although there will always be questions until he steps onto Miller Park and performs there....

[Baldkin]

The 19.2 million was not what they made last year. It has been explained to you previously, I suggest you have a read.

[HiAndTight]

They had a lot more than $19.2MM in net revenue. Revenue is "money in." If they only had $19.2MM in net revenue, they would barely have been able to pay Prince.

 

Doing a quick search, what Forbes said is the Brewers had $19.2MM of operating income and a team value of $448MM. Operating income is earnings before deduction of interest payments and income taxes (EBIT). After paying their interest (they owe a lot on Miller Park and probably still owe on the purchase of the team, so their interest paid is probably substantial), if the Brewers were profitable they then would have had to pay taxes on that income, so if they indeed made money last season, it probably wasn't much.

 

HiandTight, you accuse people on this site of speaking in difinitives and calling that "ridiculous" and "nonsense," but you've posted this incorrect information multiple times in several threads while calling it difinitive fact. We're all here to enjoy ourselves and talk Brewers. Sometimes that leads to all of us saying ridiculous things or mis-stating facts, so let's make sure we keep everything nice.

 

 

 

First of all, what in the world do you mean that if they "only," made 19.2 million dollars in "net," revenue they would hardly be able to pay Prince? Do you know what "net," revenue is? NET revenue is the total revenue your team has accumulated AFTER all business expenses and cost of operating. So AFTER THEY paid Prince and AFTER they paid everyone else.

 

You're confusing GROSS income and net income. Look up the difference between the two. Gross is how much you make before you pay anyone, net is how much you are left with after all your bills are due.

 

So your lecture takes a ugly turn right there. Especially for someone preaching to me about making "definitive," statements.

 

And finally, I'm keeping everything, "nice." You're the one talking down to me while confusing gross and net revenues and missing the entire point. Forbes had had that exact same figure around 10 million in pervious years. Last year as the Brewers drew roughly what, 3.4 million fans to the stadium to watch 168 Brewers game, they greatly exceeded those numbers, ie, more money.

 

Oh, and while you accuse me of going around and insulting people, perhaps you could cite these examples where I was unprovoked and attacked someone, something only you thus far has come out and even mentioned as I have not a single warning in my PM's about any type of complaints.

[HiAndTight]

Either way, we can nitpick all we want using vague numbers and guess at what the expenses may be, or we can use what's right in front of us and what has been used on this board(forbes) for years while it supported the opinion of the board.

 

Despite record payrolls, our income went up substantially. Next year we have in place revenue streams that will allow that revenue to grow substantially more. It's difficult to envision a scenario in which the Brewers aren't about 30 million dollars further in the black next year when combining this years gate receipts as well as our new TV deal.

[RockCoCougars]

It's a private business, and until any of us see the audited financials, any numbers bandied about are just conjecture. I have no doubt that Attanasio and his group have done very well with this investment. As long as they are in the black (which is almost a certainty), they are doing great in this economy. I say that because you have to add the unrealized gains on the franchise value to all the profits that they have reaped. A positive revenue stream paired with an appreciating investment is a solid position.

 

To me, the bottom line here is that I won't shed any tears for the Attanasios if someone is pleading poverty on their behalf. It's time for them to step up to the plate and retain one of their own stars once they hit free agency (so far, they are 0 for 2 on CC and Prince). That player is Greinke, and spending money on Oswalt would impede that.

[monty57]

Do you know what "net," revenue is?

 

Yes, and it's different than net operating income. Net revenue typically refers to a company's revenue net of discounts and returns. Net revenue generally does not account for the cost of goods sold, general and administrative expenses or other costs (those are typically incorporated in the operating income calculation). In my example, Prince's salary is a "cost of goods sold." So again, if the Brewers net revenues (revenues minus discounts and returns) were only $19.2MM, they would barely have been able to afford to pay Prince last year.

 

You're confusing GROSS income and net income.

 

No, you're confusing revenue and operating income. I think you're also confusing both of them with profit.

 

as I know Mark A has generated income simply by re-doing his loans at lower interest rates

 

You don't generate income by reducing a cost. You could increase profit, but again profit is different than income.

 

You're the one talking down to me while confusing gross and net revenues and missing the entire point.

 

I'm not talking down to you, nor am I missing any pertinant points. I'm simply trying to correct your errors. You apparently do not understand the difference between operating income and revenue, so I explained it. After your reply, I still don't believe you understand the difference and I don't believe you want to learn what the difference is. That's fine, but at least please recognize that you don't understand what you're posting.

 

perhaps you could cite these examples where I was unprovoked and attacked someone

 

I didn't say you "attacked someone," I said "HiandTight, you accuse people on this site of speaking in difinitives and calling that "ridiculous" and "nonsense," but you've posted this incorrect information multiple times in several threads while calling it difinitive fact. We're all here to enjoy ourselves and talk Brewers. Sometimes that leads to all of us saying ridiculous things or mis-stating facts, so let's make sure we keep everything nice."

 

In this post, you said: "It's just this declaration of what will and won't happen on this board that's taken as fact that's a bit ridiculous at times." and "So...the whole, "not gonna happen," nonsense is just that. Nonsense." (Calling someone's post ridiculous or nonsense isn't nice)

 

...and then "I've said this a dozen times, but after spending 95 million last year, they made 19.2 million dollars."

 

That's a definitive statement which is false. They didn't "make $19.2MM" unless you consider operating income to be profit, which it is not. You don't seem to like other posters' opinions when posted in definitive terms (it's ridiculous nonsense), but you defend your positions with the same incorrect "fact" over and over again as if it were definitive proof, which it is not.

 

In another post you said your "point obviously went over my head," and my comments are "asinine." That's not really nice. I don't think you'd call it nice if I said your posts in this thread are asinine, and my comments are going over your head even though I'm sure it's more accurate in this case than it was when you said it to me.

 

So again, we're all here to root for the Brewers and have fun. Please don't call someone else's post "nonsense" and then post an incorrect "fact" as your defense as to why other people are spouting "nonsense." We have a lot of intelligent posters here, and I respect their opinions even if I don't always agree with them. I've learned a lot by reading what other posters have to say. I've realized that often I've been wrong and sometimes probably even ridiculous, but I find it better to explain why someone is incorrect than to tell them what they are saying is nonsense/asinine/ridiculous or any other derogative term.

[MJLiverock]

"First of all, what in the world do you mean that if they "only," made 19.2 million dollars in "net," revenue they would hardly be able to pay Prince? Do you know what "net," revenue is? NET revenue is the total revenue your team has accumulated AFTER all business expenses and cost of operating. So AFTER THEY paid Prince and AFTER they paid everyone else. "

 

 

Actually Net Revenue is usually used for Revenue net of any pass throughs that a company collects as part of their revenue stream but aren't really their own. Or less any direct selling expenses like sales commissions that are paid out right off the top before figuring out costs and expenses of the underlying good. Things like Parking and Concessions are probably the culprits in the Brewers example. They collect those items in the course of their business operations but they are not the Brewer's revenues and the amount they have to pass on is netted out of the gross revenues.

 

I have never ever in all my years of analyzing company financials heard of anyone using the term net revenue as a the net profit or EBIT or EBITDA of a business which are terms related to money left after expenses are paid. I'd say Monty57 is 100% correct in his breakdown of the financials usage. 19.2MM of operating profit is not a net revenue figure and as pointed out net operating profit is also know as EBIT (earnings before interest and taxes) the Brewers have a substantial amount of debt generating interest expense and there would be taxes due on any earnings left after paying that interest. I don't know the terms of their debt deal, i.e. if they are on an interest only deal or amortizing the principal over some amount of time. If they are on an interest only deal they may from time to time take money to pay down the principal which is a cash flow report item and not even necessarily on the income statement.

[HiAndTight]

It's a private business, and until any of us see the audited financials, any numbers bandied about are just conjecture. I have no doubt that Attanasio and his group have done very well with this investment. As long as they are in the black (which is almost a certainty), they are doing great in this economy. I say that because you have to add the unrealized gains on the franchise value to all the profits that they have reaped. A positive revenue stream paired with an appreciating investment is a solid position.

 

To me, the bottom line here is that I won't shed any tears for the Attanasios if someone is pleading poverty on their behalf. It's time for them to step up to the plate and retain one of their own stars once they hit free agency (so far, they are 0 for 2 on CC and Prince). That player is Greinke, and spending money on Oswalt would impede that.

 

 

I agree 100 pct. And we won't know they're exact revenue numbers, but Forbes is the best source we have, and they made a significant jump last year from being around the 10 million dollar area to the 19.2 million.

 

Obviously they're are other area's that money has to go to, just as the 20 million in TV money, and the additional ticket revenue this year won't go directly to the Brewers payroll, but it will continue to have a positive impact on the Brewers payroll.

 

 

And I think the future of the Brewers hinges on signing Greinke. He's 0-2 as you say, but we weren't really "in it," with either of those two. I think management has to be aggressive with Greinke and offer him a big time deal right now so he doesn't get to free agency. Otherwise I could easily see him pitching for the Dodgers or the Cubs next year getting paid more than the Brewers are capable of paying. Or the Red Sox despite his struggles at Yankee's stadiums that I really don't put much stock in.

[HiAndTight]

"First of all, what in the world do you mean that if they "only," made 19.2 million dollars in "net," revenue they would hardly be able to pay Prince? Do you know what "net," revenue is? NET revenue is the total revenue your team has accumulated AFTER all business expenses and cost of operating. So AFTER THEY paid Prince and AFTER they paid everyone else. "

 

 

Actually Net Revenue is usually used for Revenue net of any pass throughs that a company collects as part of their revenue stream but aren't really their own. Or less any direct selling expenses like sales commissions that are paid out right off the top before figuring out costs and expenses of the underlying good. Things like Parking and Concessions are probably the culprits in the Brewers example. They collect those items in the course of their business operations but they are not the Brewer's revenues and the amount they have to pass on is netted out of the gross revenues.

 

I have never ever in all my years of analyzing company financials heard of anyone using the term net revenue as a the net profit or EBIT or EBITDA of a business which are terms related to money left after expenses are paid. I'd say Monty57 is 100% correct in his breakdown of the financials usage. 19.2MM of operating profit is not a net revenue figure and as pointed out net operating profit is also know as EBIT (earnings before interest and taxes) the Brewers have a substantial amount of debt generating interest expense and there would be taxes due on any earnings left after paying that interest. I don't know the terms of their debt deal, i.e. if they are on an interest only deal or amortizing the principal over some amount of time. If they are on an interest only deal they may from time to time take money to pay down the principal which is a cash flow report item and not even necessarily on the income statement.

 

 

 

Gross income usually is the money someone or something has earned before any deductions such as taxes, expenses, or promotion has been deducted. If you are receiving money after such expenses have been deducted, you are receiving money based on NET income.

 

So the statement that if our "net," revenue was "only," 19.2 million dollars, we'd hardly have enough to pay for Prince makes absolutely no sense whatsoever.

 

Second, the 19.2 million dollar figure is roughly twice the figure Forbes has had us operating at over the last several years, a number that's almost a 100 pct certainty to go up this year.

 

So my point, AGAIN, without nitpicking it, and a point that was backed up by Melvin when he recently said the Brewers have payroll flexibility, is that the Brewers are not maxed out, and they do have a significant amount of additional revenue coming in-in the future.

 

It's as if some just want so much to be right that the Brewers are broke they need to nitpick these points while telling me, "I have been corrected," and then posting links back to the same thread we're currently in.

 

So the bottom line is the Brewers are set to see a huge revenue boost next year.

 

 

But this is the same argument I've been having with "the Bruce," for the last 4-5 years when I literally used 95, 100 and 110 as the payroll numbers I predicted the Brewers would be at 2011/12 and 13. Anyone really doubt the Brewers are going to be able to carry a payroll of 110 next year?

[monty57]

HiandTight, both MJLiverock and I have posted dictionary definitions of net revenue, so are you not reading what MJLiverock and I are writing when we define net revenue, or do you not understand what we've written? We both work in the financial field and from what you've written, your understanding of the Forbes article is incorrect.

 

Again, here is what I put in my last post:

 

Net revenue typically refers to a company's revenue net of discounts and returns. Net revenue generally does not account for the cost of goods sold, general and administrative expenses or other costs (those are typically incorporated in the operating income calculation). In my example, Prince's salary is a "cost of goods sold." So again, if the Brewers net revenues (revenues minus discounts and returns) were only $19.2MM, they would barely have been able to afford to pay Prince last year.

 

How does that not make sense?

 

But the Forbes article doesn't mention net revenue, that is a term you mistakenly used when referencing Forbes' operating income number. I defined operating income in my previous post. You seem to be interchanging financial terms and assuming they all mean "profit." I run two businesses, and I wish my net revenues were my profits. Unfortunately, they're not the same thing.

[MJLiverock]

Not to belabor the point because I think it all stems from just a mix up in using net revenue in place of net profit when referencing the Forbes article but...

 

The reason payroll wouldn't be possible if net revenue was only $19.2MM is because that is all they money they would have to cover $90MM+ in payroll and all the expenses of running the team.

 

Net revenue is a top line item above COGS on an income statement. The gross margin or gross profit you reference is the the amount left after taking COGS from the Net Revenue. Then all the expenses like salary, travel, etc. come out for the net profit.

 

A few examples: http://www.wikinvest.com/metric/Revenue

Revenue is the total amount of money a company takes in before any expenses.

 

Net Revenue is the amount of a company's gross revenue plus all negative revenue items. For instance, in the retail industry, gross revenue includes all sales made by a retailer during the accounting period. Net revenue, however, will also exclude the costs associated with items like refunds on returned items, discounts and other negative sales revenue items.

 

Often times, net revenue can refer to revenue a company receives after it pays its partners. For example, Google (GOOG) arrives at net revenue by subtracting Traffic Acquisition Costs (TACs) from its gross revenue. TACs are comprised of payments made to its Adsense network partners (Google ads displayed on third-party websites are subject to a revenue sharing program), as well as fees related to non-conventional partnerships (such as Google being the first search engine listed in the Mozilla Firefox built-in search toolbar).

 

This is a subtle difference from Cost of Goods Sold (COGS) - in the case of TACs, these are costs directly related to generating revenue (which is then split between different partners). COGS, on the other hand, refers to overhead and "manufacturing" costs related to the production of goods sold. Analogously, Google's COGS would include expenses incurred in data center operations.

 

Or from the SEC's website on intro to investing http://www.sec.gov/investor/pubs/begfinstmtguide.htm

At the top of the income statement is the total amount of money brought in from sales of products or services. This top line is often referred to as gross revenues or sales. It’s called “gross” because expenses have not been deducted from it yet. So the number is “gross” or unrefined.

 

The next line is money the company doesn’t expect to collect on certain sales. This could be due, for example, to sales discounts or merchandise returns.

 

When you subtract the returns and allowances from the gross revenues, you arrive at the company’s net revenues. It’s called “net” because, if you can imagine a net, these revenues are left in the net after the deductions for returns and allowances have come out.

 

Moving down the stairs from the net revenue line, there are several lines that represent various kinds of operating expenses. Although these lines can be reported in various orders, the next line after net revenues typically shows the costs of the sales. This number tells you the amount of money the company spent to produce the goods or services it sold during the accounting period.

 

The next line subtracts the costs of sales from the net revenues to arrive at a subtotal called “gross profit” or sometimes “gross margin.” It’s considered “gross” because there are certain expenses that haven’t been deducted from it yet.

 

*****

Back on topic again, the $19MM operating profit still doesn't include interest expenses which there are some, the question is how much? Nor does it address any principal paydowns of the debt which would also come out of that $19MM. Even $150MM in debt at 6% would require an annual interest payment of $9MM taking a bite out of that $19MM, the debt may be interest only so no principal payments required and the ownership group may just want to keep the debt and only pay it off if the team is sold at some future point, or they may have to throw some token amount at the principal each year depending on what they negotiated in their loan terms. A 20 or 30 amortization plan of the principal could cause another $5MM to $7.5MM cash need from that $19MM that wouldn't show in the operating profit because principal payments are an after tax item but could very well figure into their budget of how much they really have to spend.

[CheezWizHed]

[sarcasm]Who let the bean counters post???[/sarcasm]

[PrinceEatMeat]

http://brewernation.mlblogs.com/2012/05/06/brewers-may-have-offered-contract-to/

 

Probably nothing of significance, but just to throw fuel onto the fire. This link mostly pertains to a possible offer to Lee, but an interesting snippet is at the end, "In the same message, I was told that the Brewers are also tossing around the idea of making a contract offer to a certain free agent starting pitcher." I'd guess that pertains to Oswalt. Not that he'd be interested, or that the Brewers will end up making an offer, just thought it was interesting to see.