Brewers to break team record for payroll in 2014

[HiAndTight]

http://www.mlb.com/news/article/mil/milwaukee-brewers-expect-record-opening-day-payroll?ymd=20140213&content_id=67745494&vkey=news_mil

 

I'm not sure if the Brewers have spent their money as wisely as possible, but there's no question they're reaping the benefit of the increasing TV revenues, both National and the local deals that teams like Dodgers are signing, a large chunk of which goes into revenue sharing.

 

You can agree or disagree with many of Attanasio's signings, but you can't argue he's not willing to pull out the pocketbook to field a winner.

[PrinceFielderx1]

http://www.mlb.com/news/article/mil/milwaukee-brewers-expect-record-opening-day-payroll?ymd=20140213&content_id=67745494&vkey=news_mil

 

I'm not sure if the Brewers have spent their money as wisely as possible, but there's no question they're reaping the benefit of the increasing TV revenues, both National and the local deals that teams like Dodgers are signing, a large chunk of which goes into revenue sharing.

 

You can agree or disagree with many of Attanasio's signings, but you can't argue he's not willing to pull out the pocketbook to field a winner.

 

The payroll can actually be way higher in my opinion. However, they will do it for only a special player.

[HiAndTight]

http://www.mlb.com/news/article/mil/milwaukee-brewers-expect-record-opening-day-payroll?ymd=20140213&content_id=67745494&vkey=news_mil

 

I'm not sure if the Brewers have spent their money as wisely as possible, but there's no question they're reaping the benefit of the increasing TV revenues, both National and the local deals that teams like Dodgers are signing, a large chunk of which goes into revenue sharing.

 

You can agree or disagree with many of Attanasio's signings, but you can't argue he's not willing to pull out the pocketbook to field a winner.

 

The payroll can actually be way higher in my opinion. However, they will do it for only a special player.

 

 

I ABSOLUTELY agree and have been saying so for the last several years. There is really a LOT of money being poured into MLB right now. Of course the TV bubble is going to burst according to some and that money may be sucked out, but whatever.

 

I think the payroll would have been higher in recent years had there been players worthy of paying. Even if you have the money like Detroit, the Prince deal was never a smart one. Greinke may have been. But lets say the Brewers are winning this year and a 1st basemen becomes available. I could see the Brewers adding 7-8 million dollars and reaching 110 in total payroll rather easily.

 

The problem is I don't think this team is that good and that they would have been much better served going through a small rebuilding effort, but that's not what Mark A wanted.

[PrinceFielderx1]

http://www.mlb.com/news/article/mil/milwaukee-brewers-expect-record-opening-day-payroll?ymd=20140213&content_id=67745494&vkey=news_mil

 

I'm not sure if the Brewers have spent their money as wisely as possible, but there's no question they're reaping the benefit of the increasing TV revenues, both National and the local deals that teams like Dodgers are signing, a large chunk of which goes into revenue sharing.

 

You can agree or disagree with many of Attanasio's signings, but you can't argue he's not willing to pull out the pocketbook to field a winner.

 

The payroll can actually be way higher in my opinion. However, they will do it for only a special player.

 

 

I ABSOLUTELY agree and have been saying so for the last several years. There is really a LOT of money being poured into MLB right now. Of course the TV bubble is going to burst according to some and that money may be sucked out, but whatever.

 

I think the payroll would have been higher in recent years had there been players worthy of paying. Even if you have the money like Detroit, the Prince deal was never a smart one. Greinke may have been. But lets say the Brewers are winning this year and a 1st basemen becomes available. I could see the Brewers adding 7-8 million dollars and reaching 110 in total payroll rather easily.

 

The problem is I don't think this team is that good and that they would have been much better served going through a small rebuilding effort, but that's not what Mark A wanted.

 

I've been saying it for quite a few years also. People on the boards said we operated in the red and lost money and that it's unsustainable, we'll reading Mark A comments it sounds like he is willing to do just that should we put together a WS team and do it for multiple years to keep the team in tact.

 

Also, I believe we can actually support a 120 million payroll easily and stay in the positive and go to 125-130 million should be have a WS team even thought that could very well mean red ink on the ledger. Remember guys, you combine the Brewers new team TV deal, with the revenue sharing money from all of these teams above the top luxury tax bracket plus the New MLB tv deal which is 25 million all by itself and you get more than 25 million in additional revenue.

 

This team is being very cautious with it's additional money which is very smart and isn't going to waste it on a old nobody. They are waiting for that additional superstar that they either develop or trade for.

 

Also, you say what about having money to extend guys like Segura, Peralta, Gallardo, and possibly Khris Davis should he do what Melvin said he could do? Take Ramirez and Weeks salary's off the books and you have an immediate 25 million freed up on top of the 25 million in additional freed up revenue. 50 million to do all of that. Then the next year we get 10 million more by Lohse being gone. The Brewers are in a great position financially right now.

 

I'd expect a Segura and Gallardo extensions sometime this season. Depending on what Peralta does I'd expect him should he have a good year to be extended as soon as 2015 season. I see the Brewers capitalizing on these young home grown players and keeping their talent like Mark A stresses the team to do. Wouldn't surprise me if they add more years to Gomez's contact in 2015 should he repeat.

 

I'm going to politely disagree with you Hi and Tight and predict that the Brewers have the second best team in the NL Central this season but a top 3-4 team in the NL. Top offense in baseball for sure, and the pitching will be much better than people think it will be. I've heard analysts say the Brewers are the most underrated team heading into 2014.

[Patrick425]

I'm not sure how anyone can say payroll can be higher or that payroll could be $120 million unless they have actually seen the books. Perhaps you are right, but not sure how such claims can be made without really knowing the facts. No one really knows outside of the people who run MLB teams...not even Forbes knows. They can make an educated guess, but they don't know anything for certain. In addition, I think owners are entitled to make a profit if they can. Not just a equity in the team profit, but an actual cash profit.

 

Also, I'm not sure if a "large chunk" of TV deals like the Dodgers have go into revenue sharing. I guess it depends on what you consider a large chunk. Whatever it is, it certainly does not put teams like the Brewers, Pirates, Twins, and Royals on the same level as the Yankees, Red Sox, Dodgers, and Angels.

[Cool Hand Lucroy]

I'm not sure how anyone can say payroll can be higher or that payroll could be $120 million unless they have actually seen the books. Perhaps you are right, but not sure how such claims can be made without really knowing the facts. No one really knows outside of the people who run MLB teams...not even Forbes knows. They can make an educated guess, but they don't know anything for certain. In addition, I think owners are entitled to make a profit if they can. Not just a equity in the team profit, but an actual cash profit.

 

Also, I'm not sure if a "large chunk" of TV deals like the Dodgers have go into revenue sharing. I guess it depends on what you consider a large chunk. Whatever it is, it certainly does not teams like the Brewers, Pirates, Twins, and Royals on the same level as the Yankees, Red Sox, Dodgers, and Angels.

 

I agree for the most part, especially in terms of specifics. What I think PrinceFielder might be onto, though, is the big picture financial health of the organization. I think it's important to recognize that year-to-year profit figures aren't, generally speaking, going to make a huge difference in Mark A's investment. I've always felt that baseball teams operate a lot like blue-chip stocks. Their value will not increase every day, but, over the long haul, they'll appreciate significantly.

 

From a fan perspective, I think the thing to do is ask: Looking at the next 3-5 year period, is this team overextended financially in terms of its contract commitments? Right now, I think the Brewers are doing pretty well by this measure.

[monty57]

I've never seen anyone say the Brewers lost money. In 2012, coming off a year with 3MM attendance and playoff revenues, the Brewers had a $98MM payroll. Attendance that year was 2.8MM, so they dropped payroll to $88MM last year, when they had an attendance of 2.5MM. They get more TV revenue this year, so even with a baseline attendance of 2.5MM, they are able to bump payroll back to around where it was a couple of years ago.

 

If the Brewers brass figured we'd get 3MM in attendance, then the $120MM payroll might be a possibility, but I doubt they assume that. In other words, the increase in TV revenue is largely offset by the decrease in attendance.

 

Going back to last season, I said that the Brewers would probably have a $100MM payroll this season. Just looking at the player contracts, and I figured they pretty much had to (they then traded Axford, leading me to think it could be low-to-mid-90's). My concern is that most of the money is tied up in a few players, so we have to have a lot of league minimum guys just to keep the payroll "down" to $100MM.

 

Even though we are paying more nominal dollars this year, we had a lot more talent on the 2011 and even 2012 teams than we have on the current roster. That's the problem I've been worried about. The limited payroll becomes more limited when you use most of it on a few players, and that is exacerbated when we have a poor farm, so we don't have star players like Braun, Fielder, Hardy, etc playing for league minimum or knocking on the door ready to play for league minimum. We have big question marks at a number of positions, and no depth on the farm at most positions, making us very susceptible to injuries derailing any hopes we may have.

 

I'd expect a Segura and Gallardo extensions sometime this season.

 

They approached Segura last year, and got no response. I have no inside info, but I'd guess that Segura is not going to sign a team-friendly extension. I don't want the team to do a Castro-type overpay, so if he's unwilling to sign a team-friendly deal, we need to go year-to-year with him, and probably should make sure we have a replacement in place so we can trade him sometime in his arby years. Gallardo needs to show that he's got his velocity back. If he does, he's still Brewer "property" for another season if they want to exercise his option. I think Gallardo is the best bet to get traded if some of the prospects show they are MLB-ready, so I don't expect an extension for him.

 

Depending on what Peralta does I'd expect him should he have a good year to be extended as soon as 2015 season.

 

That is much more likely. Extending a pitcher early on is risky, and Peralta is still far from a sure thing, but I'd look at extending him if he is amenable.

 

and possibly Khris Davis should he do what Melvin said he could do

 

I love extending guys when they're early in their careers, but Davis willl really need to show something to merit an extension. Extensions in the pre-arby years are for guys that are pretty sure bets to be really good MLB players (Braun, Tulo, Longoria). Davis has never been highly regarded by scouts coming up. That doesn't mean he won't be a good MLB player, but he needs a few good MLB seasons under his belt before I'd look at extending him, as there is too much risk in guaranteeing 7-8 years to a guy who may not even end up being an everyday MLB player.

 

I'm going to politely disagree with you Hi and Tight and predict that the Brewers have the second best team in the NL Central this season but a top 3-4 team in the NL. Top offense in baseball for sure, and the pitching will be much better than people think it will be. I've heard analysts say the Brewers are the most underrated team heading into 2014.

 

PFx1, I really hope you are right. I think they're going to have a fight on their hands to get third place in the Central, but I really hope you are right.

[owbc]

Payroll only matters relative to what other teams are spending. Inflation adjusted, it's not the highest payroll in team history. A $100 million payroll in 2014 is the same as $92 million in 2011, $88 million in 2008, or $73 million in 2005. They will never be in the top half of the league in payroll under the current revenue system and most likely will hover somewhere around 20th as they have for the past decade.

 

The good thing about inflation is that it makes the contracts from a few years ago look less burdensome now. Melvin's long term extensions and arbitration buyouts were mostly brilliant. They've managed to save enough money to be able to continually bring in mid-range free agents, which is not something that every small market team is capable of. So by that measure, the TV money arrived at a great time in order to avoid feeling the squeeze that we feared would come in the years after going "all in" in 2011.

 

So of course the Brewers are in good financial health. So are about 25 other teams. Money is flowing right now in MLB.

[TigerUppercut]

Payroll only matters relative to what other teams are spending. Inflation adjusted, it's not the highest payroll in team history. A $100 million payroll in 2014 is the same as $92 million in 2011, $88 million in 2008, or $73 million in 2005. They will never be in the top half of the league in payroll under the current revenue system and most likely will hover somewhere around 20th as they have for the past decade.

 

The good thing about inflation is that it makes the contracts from a few years ago look less burdensome now. Melvin's long term extensions and arbitration buyouts were mostly brilliant. They've managed to save enough money to be able to continually bring in mid-range free agents, which is not something that every small market team is capable of. So by that measure, the TV money arrived at a great time in order to avoid feeling the squeeze that we feared would come in the years after going "all in" in 2011.

 

So of course the Brewers are in good financial health. So are about 25 other teams. Money is flowing right now in MLB.

 

 

They've got this part of the "Cardinal equation" down. Now they need to hit on some draft picks and Dominican signings with more regularity. With Seid in place, the draft will always be a concern for me. He's been terrible at the top of the draft where it counts.

[HiAndTight]

I'm not sure how anyone can say payroll can be higher or that payroll could be $120 million unless they have actually seen the books. Perhaps you are right, but not sure how such claims can be made without really knowing the facts. No one really knows outside of the people who run MLB teams...not even Forbes knows. They can make an educated guess, but they don't know anything for certain. In addition, I think owners are entitled to make a profit if they can. Not just a equity in the team profit, but an actual cash profit.

 

Also, I'm not sure if a "large chunk" of TV deals like the Dodgers have go into revenue sharing. I guess it depends on what you consider a large chunk. Whatever it is, it certainly does not put teams like the Brewers, Pirates, Twins, and Royals on the same level as the Yankees, Red Sox, Dodgers, and Angels.

 

3.4 billion dollars from the Dodgers deal goes into revenue sharing. 34 percent of these teams deals do in many cases. So..I'm pretty sure I'd call that a large chunk.

 

And you're right. Nobody knows for certain, it is an educated guess, and I've spent some time trying to educate myself, and the owners absolutely do have every right to earn a profit. But there is soooo much cssh pouring into MLB right now. The one thing I can say fairly confidently is that tue bubble will burst on these huge TV deals in the near future.

[HiAndTight]

I've never seen anyone say the Brewers lost money. In 2012, coming off a year with 3MM attendance and playoff revenues, the Brewers had a $98MM payroll. Attendance that year was 2.8MM, so they dropped payroll to $88MM last year, when they had an attendance of 2.5MM. They get more TV revenue this year, so even with a baseline attendance of 2.5MM, they are able to bump payroll back to around where it was a couple of years ago.

 

If the Brewers brass figured we'd get 3MM in attendance, then the $120MM payroll might be a possibility, but I doubt they assume that. In other words, the increase in TV revenue is largely offset by the decrease in attendance.

 

Going back to last season, I said that the Brewers would probably have a $100MM payroll this season. Just looking at the player contracts, and I figured they pretty much had to (they then traded Axford, leading me to think it could be low-to-mid-90's). My concern is that most of the money is tied up in a few players, so we have to have a lot of league minimum guys just to keep the payroll "down" to $100MM.

 

Even though we are paying more nominal dollars this year, we had a lot more talent on the 2011 and even 2012 teams than we have on the current roster. That's the problem I've been worried about. The limited payroll becomes more limited when you use most of it on a few players, and that is exacerbated when we have a poor farm, so we don't have star players like Braun, Fielder, Hardy, etc playing for league minimum or knocking on the door ready to play for league minimum. We have big question marks at a number of positions, and no depth on the farm at most positions, making us very susceptible to injuries derailing any hopes we may have.

 

I'd expect a Segura and Gallardo extensions sometime this season.

 

They approached Segura last year, and got no response. I have no inside info, but I'd guess that Segura is not going to sign a team-friendly extension. I don't want the team to do a Castro-type overpay, so if he's unwilling to sign a team-friendly deal, we need to go year-to-year with him, and probably should make sure we have a replacement in place so we can trade him sometime in his arby years. Gallardo needs to show that he's got his velocity back. If he does, he's still Brewer "property" for another season if they want to exercise his option. I think Gallardo is the best bet to get traded if some of the prospects show they are MLB-ready, so I don't expect an extension for him.

 

Depending on what Peralta does I'd expect him should he have a good year to be extended as soon as 2015 season.

 

That is much more likely. Extending a pitcher early on is risky, and Peralta is still far from a sure thing, but I'd look at extending him if he is amenable.

 

and possibly Khris Davis should he do what Melvin said he could do

 

I love extending guys when they're early in their careers, but Davis willl really need to show something to merit an extension. Extensions in the pre-arby years are for guys that are pretty sure bets to be really good MLB players (Braun, Tulo, Longoria). Davis has never been highly regarded by scouts coming up. That doesn't mean he won't be a good MLB player, but he needs a few good MLB seasons under his belt before I'd look at extending him, as there is too much risk in guaranteeing 7-8 years to a guy who may not even end up being an everyday MLB player.

 

I'm going to politely disagree with you Hi and Tight and predict that the Brewers have the second best team in the NL Central this season but a top 3-4 team in the NL. Top offense in baseball for sure, and the pitching will be much better than people think it will be. I've heard analysts say the Brewers are the most underrated team heading into 2014.

 

PFx1, I really hope you are right. I think they're going to have a fight on their hands to get third place in the Central, but I really hope you are right.

 

No, they've never said they've lost money to my knowledge, but they've indicated they might on a couple occasions after particular moves, and then never said one way or the other. Just intimated they'd be willing to at the time of the moves (CC for instance).

 

Second, I don't believe they cut their payroll because their attendance dropped, I just don't think there were any moves that made sense. They also had their own TV deal to make up for the difference, but I think they would have spent the money had there been someone that made sense to sign.

 

Either way, It very, very rarely works out well when you are as top heavy and reliant on good luck as this team. To your point about not having the impact prospects. This team needs to be extremely lucky and hope several guys in their 30's can all (at least almost all) perform as well as they have in recent years with only a few guys coming up that even in a best csse scenario can really be expected to jump in and make major contributions like Braun, Prince,Yo, Hardy and company coukd have.

 

That said, most of the deals are good enough that we could easily trade virtually anyone if the team struggles. Lohse, Yo, Aram and Weeks only have a year left, and even Garza signed a pretty fair market deal.

I doubt we re-sign Yo either way though. Love what he's done, but I see him slipping a bit, and in a perfect world he'd have 70 to 80 more starts by the time any new deal would kick in. But we'll see.

 

Love Mark A's commitment, just think it'd be better served by saving the money for when we looked better positioned and we needed to really go for it. Nothing wrong with building up a Packers like fund f8r such a team hopefully in the near future.

[HiAndTight]

Payroll only matters relative to what other teams are spending. Inflation adjusted, it's not the highest payroll in team history. A $100 million payroll in 2014 is the same as $92 million in 2011, $88 million in 2008, or $73 million in 2005. They will never be in the top half of the league in payroll under the current revenue system and most likely will hover somewhere around 20th as they have for the past decade.

 

The good thing about inflation is that it makes the contracts from a few years ago look less burdensome now. Melvin's long term extensions and arbitration buyouts were mostly brilliant. They've managed to save enough money to be able to continually bring in mid-range free agents, which is not something that every small market team is capable of. So by that measure, the TV money arrived at a great time in order to avoid feeling the squeeze that we feared would come in the years after going "all in" in 2011.

 

So of course the Brewers are in good financial health. So are about 25 other teams. Money is flowing right now in MLB.

 

 

I don't possibly know how you can say they will never do this or that. I would bet you didn't foresee them going from 27 million in 2005 to 101.2 in 2012.

 

And given that their front office has said this year will break their record, I have little doubt they have a budget around 105 which could rise if they do manage to stay in contention.

I also don't see how our payroll is ONLY matters relative to what other teams are doing. Would it mean that much more if the Dodgers were spending 100 million rather than the 260 in adjusted payroll they're spending?

 

Anyway, I think some people have a fixed idea of what the Brewers can do and have pigeonholed them in a bit, and need to qualify anytime they exceed that.

 

Regardless, I saw a lot of predictions(and do every year) that the Brewers could only spend 80 or 85 million and they're once again blowing those figures out of the water.

[Baldkin]

Payroll only matters relative to what other teams are spending. Inflation adjusted, it's not the highest payroll in team history. A $100 million payroll in 2014 is the same as $92 million in 2011, $88 million in 2008, or $73 million in 2005. They will never be in the top half of the league in payroll under the current revenue system and most likely will hover somewhere around 20th as they have for the past decade.

 

The good thing about inflation is that it makes the contracts from a few years ago look less burdensome now. Melvin's long term extensions and arbitration buyouts were mostly brilliant. They've managed to save enough money to be able to continually bring in mid-range free agents, which is not something that every small market team is capable of. So by that measure, the TV money arrived at a great time in order to avoid feeling the squeeze that we feared would come in the years after going "all in" in 2011.

 

So of course the Brewers are in good financial health. So are about 25 other teams. Money is flowing right now in MLB.

 

 

I don't possibly know how you can say they will never do this or that. I would bet you didn't foresee them going from 27 million in 2005 to 101.2 in 2012.

 

And given that their front office has said this year will break their record, I have little doubt they have a budget around 105 which could rise if they do manage to stay in contention.

I also don't see how our payroll is ONLY matters relative to what other teams are doing. Would it mean that much more if the Dodgers were spending 100 million rather than the 260 in adjusted payroll they're spending?

 

Anyway, I think some people have a fixed idea of what the Brewers can do and have pigeonholed them in a bit, and need to qualify anytime they exceed that.

 

Regardless, I saw a lot of predictions(and do every year) that the Brewers could only spend 80 or 85 million and they're once again blowing those figures out of the water.

 

For being competitive in free agency, your pool of FA money compared to everyone else's pool of FA money is all that truly matters -- well, that and market, location, state taxes, and.... you get the picture.

 

The only real reason they are breaking the team payroll record this year is the infusion of the new national TV deal, which went up nearly 25 million in 2014.

[logan82]

Regardless, I saw a lot of predictions(and do every year) that the Brewers could only spend 80 or 85 million and they're once again blowing those figures out of the water.

Please quote your source.

[Patrick425]

3.4 billion dollars from the Dodgers deal goes into revenue sharing. 34 percent of these teams deals do in many cases. So..I'm pretty sure I'd call that a large chunk.

 

 

I just never heard this (34%?). I just tried searching, but couldn't find anything that talked about how much teams share from their TV contracts. So, I'm not sure where you are getting this from. I found this article from 2012 that states: "The money from each team’s local TV deal is mostly kept by the team. "

 

http://www.letsgotribe.com/cleveland_indians_2012_2013_offseason/2012/10/31/3581100/new-mlb-tv-contracts-to-impact-salaries

 

Money may be "pouring into MLB", but that doesn't mean that every team is reaping the same benefits. I think it means that the rich are getting richer and are driving up the prices for FAs. Even if High and Tight is correct (and I don't think he is) and that "34% of TV deals get shared in many cases". That would mean that out of the $340 million per year that the Dodgers are getting, $115 million goes to revenue sharing. Let's say that there are 25 teams that share equally in the revenue sharing money. I'm not sure if that is anywhere close to the truth, but for argument sake that means the Brewers would get about $4.6 million of that...enough to pay for K-Rod and couple of pre-arb guys. Not really what I consider a "huge chunk". Meanwhile LA still has an extra $225 million per year on their TV contract alone which I'm guessing is 8-10 times the amount of TV contracts for teams like the Brewers, Pirates, and Royals.

[FVBrewerFan]

You also have to consider the value of the franchise, not just how much money is made/lost in any given year.

 

To use an extreme example, if the value of the Brewers has gone up $100MM since Mark A bought the franchise, doesn't matter much is he loses $2MM on the balance sheet in any given year.

[CheezWizHed]

To use an extreme example, if the value of the Brewers has gone up $100MM since Mark A bought the franchise, doesn't matter much is he loses $2MM on the balance sheet in any given year.

 

Thats a pretty great way to run out of cash flow...Businesses do not run this way. Sure, they could get loans to run the daily operations based on the value of the business going up, but its also a good way to flush your profits down the interest drain.

[monty57]

You also have to consider the value of the franchise, not just how much money is made/lost in any given year.

 

To use an extreme example, if the value of the Brewers has gone up $100MM since Mark A bought the franchise, doesn't matter much is he loses $2MM on the balance sheet in any given year.

 

Depends on the situation. The Brewers are a limited partnership, so if the expenses outweigh the revenues, it's on the owners to come up with the money. Asking the owners to dip into their own pockets is tough. Much of a "rich business owner's" net worth is not liquid, so it's not like they just keep millions sitting in the bank. I don't believe Attanasio is a billionaire, and probably half his net worth is his equity in the Brewers, and a large part is his stake in other private business interests (TCW), which he probably doesn't want to sell. He probably doesn't want to sell his house to pay for a first baseman, so it's not that easy to just come up with millions of dollars for a player. Some owners can and will do it (Tigers), but it's not that common, and certainly not something anyone wants to do on a regular basis.

 

The most likely option would be to borrow money against the Brewers, which I'm sure is the most common financing option by owners in the red. You are correct that this isn't the end of the world if it happens once, but it does add to the team's financing costs, so it could limit future payrolls. Any business needs to turn a profit over time, or it will go under, and banks aren't going to just keep dishing out loans to a company losing money. As to the value of the franchise skyrocketing, that wouldn't happen if the team was constantly losing money. Who would want to buy into a business venture that was going to cost them millions of their own dollars every year?

 

This is the main reason the MLB scrutinizes potential buyers before they allow the sale of a team. They don't want some yahoo to come in there and bankrupt his team, likely causing the other owners /teams to come in and bail him out lest the sale of the team in bankruptcy court lower the value of all the other franchises. That and they don't want Mark Cuban to be an owner :-)

[sveumrules]

This is a very exciting development. Since spending money is directly proportional to winning baseball games we should likewise set a franchise record in victories.

[FVBrewerFan]

Agreed Monty. The Brewers aren't the fed govt, they can't just print money. They can't lose money year after year. But they can lose money every once in a while without the sky falling.

 

I will differ with one thing you said, that the Brewers value woudn't be high if they were losing money every year. Not entirely true. A big part of the value of the franchise is the BREWERS, not necessarily the MILWAUKEE Brewers.

[monty57]

Agreed Monty. The Brewers aren't the fed govt, they can't just print money. They can't lose money year after year. But they can lose money every once in a while without the sky falling.

 

I will differ with one thing you said, that the Brewers value woudn't be high if they were losing money every year. Not entirely true. A big part of the value of the franchise is the BREWERS, not necessarily the MILWAUKEE Brewers.

 

Depends on how "iron clad" that contract Wendy Selig-Preib always talked about really is :-)

 

At the end of the day, we Wisconsin fans are very fortunate to have three professional sports teams. That three million people turned the gates at Miller Park in 2008, 2009 and 2011, and 2.5MM attended last year after some poor baseball in 2012 and 2013 is testament to the fact that Wisconsin has some really good sports fans. As much as I've disagreed with some of the Brewers' moves, I do understand that they need to keep attendance up. If that falls too much, we really might face some lean years as Brewer fans.

[DoubleSwitch]

3.4 billion dollars from the Dodgers deal goes into revenue sharing. 34 percent of these teams deals do in many cases. So..I'm pretty sure I'd call that a large chunk.

 

 

I just never heard this (34%?). I just tried searching, but couldn't find anything that talked about how much teams share from their TV contracts. So, I'm not sure where you are getting this from. I found this article from 2012 that states: "The money from each team’s local TV deal is mostly kept by the team. "

 

 

http://mlb.mlb.com/pa/pdf/cba_english.pdf

 

on the top of page 121

 

34 percent of every teams local revenue is put in a pot and evenly distributed among every team

 

also the top 15 markets forfeit and increasing chunk of their revenue sharing money as the years go on. It was 25% last year, 50% this year, 75% next year and all of it in 2016, so the Brewers are getting an increasingly large chunk of that money as time goes on.

[owbc]

We discussed this a few months ago, but since some people are still saying the Brewers somehow might not make money this year:

 

Why can the Brewers payroll go up $25 million this year? Because they have an extra $25 million in revenue coming in that they didn't have last year.

 

Forget the local TV deals, the real money for the Brewers (and just about everyone else) is in the National TV deal which starts this year. Nobody knows exactly how much the Brewers are getting from the new deal, but it's up to $50 million per season because the deal is worth $1.5 billion per year, split equally 30 ways. That's a net gain of $25 million per season since the new deal is double the old deal.

 

In other words, Garza, K-Rod, the future Segura contract, etc. are all covered just with the extra TV money with plenty of money left over.

 

Now--some other teams haven't spent this money yet. Mark A. is a good owner and is investing the extra money in his team right away. Other owners might be waiting--some of the contracts are going to be incredible next year when some teams are sitting on two years worth of this money. Finally, some owners will just pocket the money--I doubt the Marlins payroll is going to climb much.

 

My feeling is that eventually the market will force everyone to spend money and you will see everyone's payroll climb. Local revenue is going to keep falling behind, but fortunately it doesn't matter as much thanks to Selig's progress on revenue sharing.

[Eye Black]

This Ken Rosenthal interview with Mark Attanasio is excellent. Some explanation of the financials and probably the best insight into his exact involvement in the Lohse and Garza signings that I have seen published...

 

Highlights from my interview with Brewers owner Mark Attanasio at the SABR Analytics Conference on Friday:

 

Attanasio, who made his fortune in money management and capital investment, bought the Brewers in 2005 for a reported $223 million.

 

ROSENTHAL: Why did you decide to buy a baseball team?

 

ATTANASIO: It has always been a passion of mine. I was a really mediocre high school player. That's probably stretching it a bit -- a JV player. My cousins seem to recollect that when I was in law school that I said I wanted to buy a baseball team and that was a goal. By the way, if it was a goal, it was really a crazy goal.

 

When I first got involved with the Brewers, I thought, "Gee, it would be really neat to make a small investment in the commissioner's team, get known to the folks in the sport over 20 years. Then, when I was ready to retire in my mid-60s, maybe I could become a controlling owner of a team, who knows."

 

The commissioner's family then shifted to doing a full sale of the team. I was a money manager, investment banker. One of the things they taught us was that when you bid on something, it's a non-binding indication of interest.

 

If you want it, you need to put out a high number. If you put out a low number, they bounce you out of the process. And if the team ends up selling at a low number and you're out of the process, it's hard to say, "Gee, I would have paid that." There is a lot of that in sports. There are 122 sports teams and probably 122,000 individuals who would say, "I would have paid that for that team."

 

I knew generally what number they wanted. A lot of folks were in the $150 million to $180 million range at that time. I said, $200 million. The next thing I know, I'm in the finals with three or four other bidders. At that point, I thought, "When are you ever going to get an opportunity to buy a major-league baseball team? You'd better get it done."

 

ROSENTHAL: How did you learn that you were the winning bidder?

 

ATTANASIO: They had a very buttoned-up process (the sale was conducted by Allen & Co. on behalf of the Brewers). They told me that they would call me by certainly 4 or 5 o'clock West Coast time. They were having their board meeting and their vote.

 

I leave the office early. I sit in my study at my home. At 4 o'clock, I'm ready. There were a couple of other serious bidders. 5 o'clock, the phone doesn't ring. 6 o'clock, the phone doesn't ring. I was getting a little uncomfortable. I thought this might not be working out.

 

So I went downstairs. I have a small gym in my house. I got on the treadmill and got rid of the anxiety. In the course of getting rid of my anxiety, I was kind of preparing my concession speech. This was the commissioner's team. I wanted to be gracious, of course.

 

I go back upstairs. I sit in my office. It's 7 o'clock and the phone still hasn't rung. But at least I have my concession speech ready now. The phone finally rings. 'Mark, it's Steve Greenberg, Allen & Co.' I say, 'Hi, Steve.' And then there is just silence. I think (former Brewers executive) Wendy (Selig, Bud's daughter) was on the phone, too.

 

There was complete silence. He doesn't say anything. I'm very uncomfortable. I say, 'Now, I know how a Miss America candidate feels.' And Steve, completely deadpan, right on cue, says to me, 'We're not going to have any tears, are we?' I say, 'No tears.'

 

And he says, 'We have three questions to ask you.' I think the first was about price. Now relative to the bidding process, the two points of advice I can give everyone would be first, indicate a high level and second, if you're down to this final call and they say they have a few questions to ask you, the answer is always yes. Will you bump the price? Yes. I think he may have asked that last. And then he said, 'OK, you've got it.'

 

I said, 'I've got it? And he said, 'Oh yeah, you're going to be the new owner of the Milwaukee Brewers.' I let out this scream that you could hear throughout my house. Poor Steve, he had to listen to all this. The only other time I can recall being that excited is when Carlos Gomez scored the winning run in that playoff round (the 10th inning of Game 5 of the 2011 Division Series).

 

ROSENTHAL: Over the years, there have been times when you have been hands-on, maybe more hands-on than most owners. When do you know it is the proper time to exert more influence than you otherwise might?

 

ATTANASIO: I don't know that you ever know when the right time is. I was saying last night to a couple of our colleagues, as I've been in the sport coming up on 10 years, I worry sometimes that I'm getting bounded too much by convention.

 

When I insert myself into the process a little bit, it's a function of two things: Passion, and in some cases, I was I was too inexperienced to know better, but it turned out to be the right move. Now I worry because I have experience to draw on, and I'm more patient -- I don't know that (general manager) Doug (Melvin) would think I'm more patient -- that I don't insert myself the way I might have before.

 

You don't really know, but one of the nice things about working with Doug, one of the things he told me from the very beginning, going back to the Orioles when he worked for Peter Angelos, he felt like the owner is like a factory owner. If the factory owner wants to put a new machine in, it's his business. The GM running the factory can give you his thoughts. But if I want to do something, he's always been supportive of that. In most cases, he has agreed with what I want to do. But he's supportive of the owner coming in and doing something.

 

ROSENTHAL: The last two offseasons, you have signed a starting pitcher late. All teams work with a budget, but from the outside it appears, 'Ah, the owner just decided he wanted the player.' How did the (Kyle) Lohse and (Matt) Garza decisions come about? How did you make them work financially?

 

ATTANASIO: Teams do have a budget. Going back to 2009, we used to have very rigid budgets. I don't want to be (critical). It is so hard to be a major-league player. If you throw one pitch, I'm totally respectful of it. But that year, because we were fitting in a budget, we had four average pitchers. I remember Doug -- he's got a good sense of humor -- that year he was telling the media, "Four of a kind beats two aces." Well, we found out that year that four of a kind may beat two aces in poker, but it does not beat two aces in baseball. It was one of those years.

 

With experience in the sport, I determined that you need depth, but it was more important to have players who were difference-makers. The budget is kind of there. We've run the team financially responsibly. We can't always stretch the budget the way a large-market team can, but we can stretch the budget -- we stretched the budget when we traded for Zack Greinke (in December 2010). But it gets more attention when you sign a free agent.

 

In my investments, I focus on opportunity. Usually the best time to be a buyer in the market is when there is either a fear or nobody else is buying. And usually, they're connected. What happened with Kyle, the new CBA had this rule about giving up a draft choice. And giving up a draft choice evolved in our sport from giving up a lottery ticket to giving up your first born. GMs were not going to give up that draft choice. Didn't matter.

 

We had the 17th pick that year. You can actually do some work and say, "What are the odds of the 17th making it to the big leagues? What are the odds of that pick being a six-year big leaguer?" Which is about 5 percent.

 

It's a little more nuanced. Your farm system is currency for trades. If we didn't have a good farm system, we couldn't have traded for Zack Greinke. It's not as binary as that. Which is some of the challenges with analytics generally, whether you look at it from baseball or look at it from making an investment, people want to get to a binary: "If it's this, then it's that." And it's usually more complicated. We were also making a decision not to restock our farm system, which needed some re-stocking.

 

You look at that and you look at what kind of discount that you think you're getting in the market that Kyle Lohse would have commanded after being 16-3. The final overlay in how did it come about is, I came down to Arizona. We did a tour of the Dodgers' and White Sox's stadium. We played the White Sox that day, and our guys just got smoked. I thought there were going to be dents in the wall. It was brutal.

 

I met with Doug afterward and said, "We've got to get one of these pitchers. We can't just go through a season like this." We all love this sport. What's great about this sport is that there's hope. For folks in Wisconsin . . . there's nothing nicer than spending a summer day at Miller Park. But if you know that there is just no chance you're going to win, that is not OK with me. I was very concerned. I wasn't kidding myself to think if we get Kyle Lohse, it's going to change things. I just had to bring up the quality of the product we were giving our fan base.

 

When the deal was first announced, everyone looked at it as a bad deal because we gave up the draft choice. Now folks are mostly writing about it as a good deal, which it was. ...

 

Scott (Boras) told me, by the way, that on Kyle, I set a record. The prior record was with John Mozeliak and the Cardinals. (Boras) had made like 19 phone calls to get him to say yes. He made 31 or 33 phone calls to me. We had 33 conversations on Kyle. I think that defines persistence.

 

ROSENTHAL: OK, what about Garza?

 

ATTANASIO: Matt is different. We've been focusing on pitching, and in between, we've very quietly done some things to build up our farm system ... So then (we're) thinking, how can we get better? Nez Balelo, who is Ryan Braun's agent, we're talking in California. Actually, it was at Ryan's wedding. He was talking about how maybe one of his (clients) could come into our bullpen. The price was high for us. It wasn't going to work.

 

I started walking away and I said, "Well, anybody else?" I literally started walking away. He said, "Matt Garza." I spun around and said, "How about Matt Garza?" He told me generically what kind of situation Matt was looking for.

 

Well, (manager Ron) Roenicke was there. I walked over to him, sat down and said, "Ron, how about Matt Garza?" He goes, "Yeah!" So the next morning, I called Doug and said, "How about Matt Garza?" Doug's first question was, "Isn't he too expensive?"

 

... This was early December, then all the way through. It was a whole process. I counted -- when we did the Greinke trade, I think we had 14 or 16 people work on that in some way. ... Likewise with Matt, I never counted to that extent. But it was a huge number.

 

The information that came back on Matt was that he was a good guy. All of the managers who he had pitched before liked having him. We were able to get a good picture. It took probably two months or upwards. Some of it was the amount of time it took us to do the work. And some of it, if you look at free agency over the last several years, again from an analytics standpoint, there are better deals to be had later -- the Rays are brilliant at this, actually. They do a bunch of January signs and they are all good signs.

 

We really were comfortable with our pitching this year. We've got 20 guys for 12 spots who have pitched well at the major-league level. But Matt changed the whole dynamic, we feel.

 

ROSENTHAL: The local broadcast revenue challenge. Your deal is locked in. Yet, it's going to be dwarfed by other deals. How do you make it work?

 

ATTANASIO: It goes through 2020. At that time, we made a short-term extension of eight years. I wanted to do it as short as we could. FOX wanted to do it for as long as they could.

 

It's one of the reasons the CBA negotiations are so important. Commissioner Selig and his negotiating team last time . . . they were trying to vector to competitive balance. It's critical. Notwithstanding this disparity in broadcast revenues, we've had terrific competitive balance.

 

We calculate this year that 17 teams have their highest payroll ever. That includes us, the A's, the Rays, the Padres, Baltimore, Colorado -- the Dodgers are an outlier -- Pittsburgh. That's all working. We need to figure out how to compete against that backdrop. It's an increasing challenge, no doubt.

[DoubleSwitch]

Really interesting interview. The reliever they were talking about being too expensive is most likely Chris Perez, that's the only Nez Balelo represented reliever on the market this year from what I could find. He ended up getting less money than K-Rod. Personally I'd rather have K-Rod, but I'm sure there are some here who will disagree.