How much money do the Brewers have left to spend?

[adambr2]

There is actually a tangible dollar value that you can put on how much a playoff spot is worth, how much a pennant is worth, how much a World Series is worth to a team. Estimates, anyway, although I'm not sure what the numbers are.

[True Blue Brew Crew]

In 2014 the Brewers payroll was 15th in the league @$110 million. They are committed to $115 million so far this year. Given revenue increases they should be able to add more no problem. I would think they could start the year at $120 if they felt like it.

 

I could have sworn that with deferred payments such as Ramirez, the Grandal signing, and now settled arby cases they're already over 120.

[Eye Black]

There is actually a tangible dollar value that you can put on how much a playoff spot is worth, how much a pennant is worth, how much a World Series is worth to a team. Estimates, anyway, although I'm not sure what the numbers are.

It is an interesting topic (i.e. the tangible dollar value of postseason play).

 

The true answer is obviously much deeper than solely tickets sales, but I was lucky enough to be able to get tickets to Game 163 at Wrigley through the Cubs website. The face value ticket prices were on average much higher than what the Brewers NLDS games were for roughly equivalent seats. I did some rough math at that time and am fairly confident the Cubs pulled in around $5 million in ticket sales revenue from Game 163 alone. Obviously there are operational costs involved, but not a bad pay day for a game that occurred by mere happenstance.

[homer]

In 2014 the Brewers payroll was 15th in the league @$110 million. They are committed to $115 million so far this year. Given revenue increases they should be able to add more no problem. I would think they could start the year at $120 if they felt like it.

 

I could have sworn that with deferred payments such as Ramirez, the Grandal signing, and now settled arby cases they're already over 120.

 

$115 million includes Ramirez ($3million)

https://www.spotrac.com/mlb/milwaukee-brewers/payroll/

 

Although looking at that again, there are a lot of pre-arb blanks so you might be right. My mistake.

[jerichoholicninja]

There is actually a tangible dollar value that you can put on how much a playoff spot is worth, how much a pennant is worth, how much a World Series is worth to a team. Estimates, anyway, although I'm not sure what the numbers are.

It is an interesting topic (i.e. the tangible dollar value of postseason play).

 

The true answer is obviously much deeper than solely tickets sales, but I was lucky enough to be able to get tickets to Game 163 at Wrigley through the Cubs website. The face value ticket prices were on average much higher than what the Brewers NLDS games were for roughly equivalent seats. I did some rough math at that time and am fairly confident the Cubs pulled in around $5 million in ticket sales revenue from Game 163 alone. Obviously there are operational costs involved, but not a bad pay day for a game that occurred by mere happenstance.

 

I could very likely be wrong, but I feel like playoff ticket sale revenue is split between the home team and the league. And quite possibly the visiting team as well. If that's true, we're still talking a lot of money but not as much as it appears to be.

[young guns]

I think that's true about playoff games, but 163 would have been considered a regular season game. Though I don't know if it would have had split profits or not as a special case.

[82brewcrew82]

The profits that Attanasio and the other owners have been getting each year is like crack to them... They are hooked and they aren't giving it up for anything... Where did the $30M for the sale of MLBAM go? Did any go into the salary pot? There is no reason the team can't have a $120-$140M payroll with current revenues/revenue sharing... All the Brewers owners need to do is kick part of their habit... I'm not holding my breath...

 

The evidence increasingly points to this being the correct answer. All MLB teams are profitable. Some MLB teams are immensely profitable. The Brewers have appreciated in value by $800 million since they were purchased by Attanasio. After they couldn't get public money for Maryvale they ate the $60 million cost like it was nothing.

 

The post-2008 Brewers are small market in name only. Their attendance, TV viewership, merchandise sales, etc are all mid-tier or better in MLB. The payroll is starting to reflect that as well. We shouldn't pretend like we are some poor franchise that's struggling to get by. The Indians, Rockies, D-Backs, etc. can all spend $150 million and so can the Brewers.

This is spot on. There was an article somewhere today that said the Reds payroll was going to be in the 130-135mil mark. No way should the fan base be trying to justify anything less. If they choose to spend less its an ownership decision to favor profit.

[Patrick425]

Interesting how some seem to have some pretty specific numbers regarding baseball revenues. Would you mind posting those financials that you somehow obtained, I'd be curious to see them. Also, [sarcasm]how horrible that an owner would want to make a profit on an investment. What's this world coming too![/sarcasm]

[Oxy]

Then again, Machado isn't coming here.

 

If we offered him a 1 yr/$40M contract he might blink. There is a non-zero probability of this happening, but it might be less than 1%.

 

I don't think I want to operate a franchise like that, but the Grandal deal already opened the door to that type of thinking.

 

If for whatever reason we don't have a WS caliber team on July 15th, he and Grandal would both be dealt anyway.

[RollieTime]

To hopefully put some of this payroll debate to rest...

 

Brewers 2017 Numbers

 

Payroll $69 million

Attendance was 2.6 million

Profits $67 million

Payroll + Profits= Break Even at $136 million

 

Brewers 2018 Numbers

 

Payroll $121 million

Attendance was 2.8 million. Let’s say an average ticket is $30 for the 200,000 additional tickets sold. That’s another $6 million before taxes. So let’s say that’s $4 million more in profits.

Break even was $136 million + $4 million in additional ticket sales= $140 million.

 

Looking at this, their profits in 2018 was probably around $19 million. That’s before the profits from the playoffs. The revenue is between $20-$30 million, but that’s not straight profits. It’s probably fair to say you could tack on another $10 million in profits.

 

$140 million to break even + $10 million in playoffs= $150 million for break even during 2018 season.

 

$150 million-$121 million payroll= $29 million in profits for 2018.

 

I have never thought that Mark was in it just to make profits. I think this shows that he isn’t just padding his pocket book. It’s expected that a business owner would want some type of profit at the end of the year. The Brewers payroll was at $121 million even before Mark knew we would be in the playoffs to get the additional profits. He’s putting as much money into the Brewers that he can and I hope this exercise could maybe give people a better look into what the Brewers could reasonably do this season. I could see them pushing it a little more toward the break even point and stretching the payroll to around $130-$135 million by season’s end, but going beyond that wouldn’t make much sense financially. Of course, he could spill over some profits from this past season and push it to about $145 million tops, but that would be putting them very close to going in the red.

 

As it sits right now, their payroll is around $120 million. They need to leave a little room to make trades during the season to make a push for the playoffs and have payroll space for all the guys shuffling up and down as well. All those guys need to get paid too.

[Oxy]

Interesting how some seem to have some pretty specific numbers regarding baseball revenues. Would you mind posting those financials that you somehow obtained, I'd be curious to see them. Also, [sarcasm]how horrible that an owner would want to make a profit on an investment. What's this world coming too![/sarcasm]

 

I think everybody's been happy with MA as an owner. Taking a loss every 8 or 10 years in order to make a serious run at a WS might cut into his profits a little bit. Then again, maybe not, that's kinda the point of the discussion.

[KeithStone53151]

Im curious where your profit number is coming from of 67 million. Is that documented somewhere?

[RollieTime]

Im curious where your profit number is coming from of 67 million. Is that documented somewhere?

 

It was Forbes’ annual study of MLB team valuations of the Brewers for the 2017 season. They estimated the Brewers’ profits at roughly $67 million.

 

https://www.cbssports.com/mlb/news/the-yasmani-grandal-signing-shows-why-the-brewers-might-be-the-most-opportunistic-team-in-mlb-these-days/

 

“Forbes' annual study of MLB team valuations ranked the Brewers 24th in revenue, at $255 million for 2017. Despite that modest revenue stream, Forbes estimates the Brewers' profit at $67 million for that season, the seventh-highest mark in all of baseball.”

[OnTheBlack]

We are in unchartered territory with payroll. I see us somewhere between $115 and $120 million payroll depending how you count the min salaries, with at least a few million possible in incentives. With how low payroll was the prior couple years, the imminent new tv deal, extra revenue coming from increased ticket prices and likely increased attendance due to the team being good, and baseball generally having much more revenue than past years...I personally could see us around $150 million without losing money, assuming the Brewers contend. We certainly won't open that high and might not even push payroll that high with mid-season acquisitions. That's my opinion on absolute max payroll. I think it would be unlikely we add more than $10 million in payroll at this point to open the season.

 

 

There is no way in the world the Brewers could add 67% to their payroll! Nobody knows what the tv deal will be, except it will be less than 1/4 of the Cubs or Dodgers deal. Increased attendance won't bring much, and costs are increasing. Their MAX will be around $117-120M for this year. Right now I too think they are at that sum, so unless a trade of Anderson and/or Thames comes to pass, Stearns is done.

 

First, there's a big difference between what we can do and what Mark A. is willing to do, and I guess that's what we'll find out. Mark A. has a $700M net worth. If he wants to push the payroll to $150M this season and he anticipates $140M in revenue, he could operate at a $10M loss if he felt the long-term investment was worth the price. He absolutely COULD do it if he wanted. Doesn't mean he would, but he could. Making the playoffs is worth a great deal of revenue to a franchise. A World Series, especially for Milwaukee, is worth far more in potential revenue.

 

There is more to it than just "we have X amount of dollars to spend on payroll this year." If you have several 1 year expiring contracts, he could say, "Ok, we can go to $140M this year, but next year we need to be around $100M." There's a lot of different factors at play, and the big picture covers more than just one season. We were up around $100M at times in the Melvin era when we were looking to contend, and other times when we were rebuilding we were closer to $60M, because in the bigger picture it didn't need to be more than that. It doesn't mean we had that much less to spend that year.

 

 

So....let me see if I can wrap my head around this. You're saying there is nuance and that people without the exact numbers and without knowing exactly what Mark A is thinking can't say with absolute certainty what we can or cannot do? Interesting...

[coolhandluke121]

It's the wrong question in my opinion. They're not being cheap at all. They're just prioritizing sustainability. You can't go out handing out Lowrie-type deals every time you have a need. You gotta wait for better opportunities. Who knows what other needs and opportunities will arise? You gotta preserve your flexibility. The Lowrie/Cobb/king's ransom for an all-star opportunities will pretty much always be there. The Brewers are much more discerning than most teams and that's why they're so successful (relative to their market and how recently they went through a rebuild).

 

I don't see them signing anybody after Grandal, but that's because it's hard to get such good value, not because they're cheap. I'm very confident they'll add payroll if the right opportunity comes along. If there was another Aramis Ramirez situation, for example, I think Mark A would catch the first flight he can to sign the deal, no matter what he's doing at the time.

[82brewcrew82]

Mark A. bought the team so he can do what he wants. I don't begrudge him one iota for making his money but I'm not going to buy into the fallacy that there isn't financial room to do more. We may not know the exact numbers but there is more than enough information publicly available to make some very well educated guesses. Profits are rising while player costs are going down (not to mention the rising cost of the fan experience). No doubt about that anymore and a big labor fight is brewing over it. Mark A. may not WANT to spend more, but he almost certainly CAN spend more. Choosing not to is deciding in favor of profit. I have no stake in whether that is right or wrong but I'm not going to pretend it isn't a choice much less a choice that doesn't exist.

 

Now, deciding to spend that in the most value conscience way is what this organization does so the fact that they haven't acquired their guy(s) yet is not concerning to me. If we haven't learned that DS has his price for things and will not budge from that price then we aren't paying attention. If there is value to be had that considerably upgrades the team, he will make the move if Mark A will allow it under the teams "budget".

[BillScottCanRake]

Does anyone know how many owners/investors have a stake in the Brewers? Mark A is the face of ownership but isn't the sole owner or the sole investment stakeholder, correct?

 

Would it be fair to speculate those other stakeholders have some say in how much the team spends and what sort of profits are "acceptable"? Or does Mark A have complete autonomy to make budgetary decisions?

[KeithStone53151]

Does anyone know how many owners/investors have a stake in the Brewers? Mark A is the face of ownership but isn't the sole owner or the sole investment stakeholder, correct?

 

Would it be fair to speculate those other stakeholders have some say in how much the team spends and what sort of profits are "acceptable"? Or does Mark A have complete autonomy to make budgetary decisions?

 

I know definitively that someone in the Marcus family, or Marcus Corp, has a minority stake. I would expect there are others with a minority stake as well. I'm sure they have a platform to make their voices heard, but Mark A certainly has more than half the stake in the Brewers and is the one making decisions.

[xisxisxis]

I think everybody's been happy with MA as an owner. Taking a loss every 8 or 10 years in order to make a serious run at a WS might cut into his profits a little bit. Then again, maybe not, that's kinda the point of the discussion.

I'm not against the Brewers owners making money every year. I just think if you're pulling in $30M+ in profit EVERY year that at some point it would be nice for that "great" ownership to maybe only take home $5M for a couple of years to get the additional pieces to maybe win a world series. We were 1 game away last year from being in the series, we didn't lose many pieces from that team and I think now is the time the owners should be willing to take less of a profit home. Josh Harrison isn't that type of move, Jed Lowrie would have been, Marwin Gonzalez would be...

[umphrey]

Wasn't our payroll pretty low 2015-2016 or 2016-2017? I was hoping they would bank some of that cash for years like this one.

[KeithStone53151]

I'll add to the discussion from Forbes, the $67 million number is operating income not net income. There is quite a bit else below the line that impacts end of day profitability.

[coolhandluke121]

Yeah, appreciation in the investment is really important to consider, and there are lots of other intangibles like tax deductions. I'm pretty sure baseball owners can still claim depreciation on players or something like that, and it's the only sport where that happens.

 

He could spend more. I don't have any problem with anyone wanting them to. My problem is that you often don't get better by doing so, and on the contrary you actually get worse because you're usually signing older players who are already past their peak. And then at some point you can't spend anymore, and you've just created more problems than you've solved. Wanting to sign Darvish is a simple example. They could have done it instead of getting Chacin, and where would they be now? So although they can afford to spend more, there's just no reason to do when you can be just as successful (if not more so) when they don't.

[reillymcshane]

This is a sensitive topic to many people - people complaining about millionaire players one one side, and millionaire/billionaire owners on another.

 

No matter what you think, please try and be calm and respectful in the discussion - and stay on topic. Don't call people idiots or whatever. Don't attack them personally. It does nothing to help the conversation. It just stokes anger and derails the subject matter.

 

Thank you.

[3and2Fastball]

In the most recent Baseball America podcast on the Brewers prospects, Haudricourt said that on the day the Brewers acquired both Cain & Yelich, that when Stearns told Mark A about also signing Cain after trading for Yelich, Mark's response was "are you sure we need both of them?"

 

Maybe I'm reading to much into that, but to me, that says plenty about Mark.

[RollieTime]

In the most recent Baseball America podcast on the Brewers prospects, Haudricourt said that on the day the Brewers acquired both Cain & Yelich, that when Stearns told Mark A about also signing Cain after trading for Yelich, Mark's response was "are you sure we need both of them?"

 

Maybe I'm reading to much into that, but to me, that says plenty about Mark.

 

Mark may have thought that Braun, Yelich, Phillips, and Santana were going to be productive enough without Cain. I think a lot of people had higher standards for Santana coming off his 30 homer season. I personally was surprised when Cain was signed and didn’t think we exactly needed him either. I think it’s fine for an owner to question a move like that. Even if Mark questioned it at first, he came around to the idea since the Brewers actually pulled it off and signed Cain. I think what they actually did do speaks more than just what was discussed.