How much money do the Brewers have left to spend?

[Brew crew 92]

A small market is not going to spend $15mil+ on a reliever when their bullpen is already a strength. That is some luxury the biggest markets on the planet can do if they want. Small markets simply don't spend big money on the bullpen and for good reason. If we won't spend $5mil to get a veteran lefty we surely aren't spending three times that for three times as long for a reliever.

 

I am not really against the idea persay (I am a big proponent of super pens, much like what we got to employ last season), but the odds the Brewers sign Kimbrel seems to be in the negatives.

 

Yes understand your thinking, cause a short time ago I would have agreed with it. But after doing some research and realizing that the Brewers revenues have increased more in the last two years than just about any other team in baseball, we have the $ to invest in a player that is arguably the most elite at his position. The old saying you have to spend money to make money. With JJ’s injury among other things I don’t think our bullpen is a strong as you make it out to be at least starting the year. I can’t think of a single player that would help the Brewers more than Kimbrel.

[MrTPlush]

A small market is not going to spend $15mil+ on a reliever when their bullpen is already a strength. That is some luxury the biggest markets on the planet can do if they want. Small markets simply don't spend big money on the bullpen and for good reason. If we won't spend $5mil to get a veteran lefty we surely aren't spending three times that for three times as long for a reliever.

 

I am not really against the idea persay (I am a big proponent of super pens, much like what we got to employ last season), but the odds the Brewers sign Kimbrel seems to be in the negatives.

 

Yes understand your thinking, cause a short time ago I would have agreed with it. But after doing some research and realizing that the Brewers revenues have increased more in the last two years than just about any other team in baseball, we have the $ to invest in a player that is arguably the most elite at his position. The old saying you have to spend money to make money. With JJ’s injury among other things I don’t think our bullpen is a strong as you make it out to be at least starting the year. I can’t think of a single player that would help the Brewers more than Kimbrel.

 

I think this possibility would be much more likely if Kimbrel was a one year deal candidate. Clearly that isn't the case. I don't see any way the Brewers make a major commitment to have what would be a major luxury to make the bullpen better. What if a major need arises next year or midseason? Going to be really hard to get someone, especially if it requires a longer term deal if you tie up $15mil to Kimbrel.

 

As much as I would like to dream I don't think there is any way short term we are going to just start busting out a $150mil+ payroll because we are competing.

[Brew crew 92]

A small market is not going to spend $15mil+ on a reliever when their bullpen is already a strength. That is some luxury the biggest markets on the planet can do if they want. Small markets simply don't spend big money on the bullpen and for good reason. If we won't spend $5mil to get a veteran lefty we surely aren't spending three times that for three times as long for a reliever.

 

I am not really against the idea persay (I am a big proponent of super pens, much like what we got to employ last season), but the odds the Brewers sign Kimbrel seems to be in the negatives.

 

Yes understand your thinking, cause a short time ago I would have agreed with it. But after doing some research and realizing that the Brewers revenues have increased more in the last two years than just about any other team in baseball, we have the $ to invest in a player that is arguably the most elite at his position. The old saying you have to spend money to make money. With JJ’s injury among other things I don’t think our bullpen is a strong as you make it out to be at least starting the year. I can’t think of a single player that would help the Brewers more than Kimbrel.

 

I think this possibility would be much more likely if Kimbrel was a one year deal candidate. Clearly that isn't the case. I don't see any way the Brewers make a major commitment to have what would be a major luxury to make the bullpen better. What if a major need arises next year or midseason? Going to be really hard to get someone, especially if it requires a longer term deal if you tie up $15mil to Kimbrel.

 

As much as I would like to dream I don't think there is any way short term we are going to just start busting out a $150mil+ payroll because we are competing.

 

I just see the bullpen right now differently than some. Not sure Kimbrel as much luxury as necessity. If our early season schedule wasn’t so brutal and JJ good to go it would be different. Our payroll COULD be 150+ Since our current revenue makes us a mid market franchise.

[Brew crew 92]

A small market is not going to spend $15mil+ on a reliever when their bullpen is already a strength. That is some luxury the biggest markets on the planet can do if they want. Small markets simply don't spend big money on the bullpen and for good reason. If we won't spend $5mil to get a veteran lefty we surely aren't spending three times that for three times as long for a reliever.

 

I am not really against the idea persay (I am a big proponent of super pens, much like what we got to employ last season), but the odds the Brewers sign Kimbrel seems to be in the negatives.

 

Yes understand your thinking, cause a short time ago I would have agreed with it. But after doing some research and realizing that the Brewers revenues have increased more in the last two years than just about any other team in baseball, we have the $ to invest in a player that is arguably the most elite at his position. The old saying you have to spend money to make money. With JJ’s injury among other things I don’t think our bullpen is a strong as you make it out to be at least starting the year. I can’t think of a single player that would help the Brewers more than Kimbrel.

 

I think this possibility would be much more likely if Kimbrel was a one year deal candidate. Clearly that isn't the case. I don't see any way the Brewers make a major commitment to have what would be a major luxury to make the bullpen better. What if a major need arises next year or midseason? Going to be really hard to get someone, especially if it requires a longer term deal if you tie up $15mil to Kimbrel.

 

As much as I would like to dream I don't think there is any way short term we are going to just start busting out a $150mil+ payroll because we are competing.

 

Just wanted to finish some thoughts from kimbrel thread

I’m old and some people as they get older get sentimental and look at the past with more fondness than they probably should. With that said I hope the brewers can win the World Series while Bud Selig Is still alive AND Bob Uecker still calling brewer games. How great would that be! Father Time is a tickin

[homer]

Just so everyone is on the same page, the most recent Forbes valuations (which are best guess estimates but still pretty thorough) has the Brewers at 7th in baseball in operating income (+$67 million). This was BEFORE the 2018 season and based on 2017 payroll numbers which were much, much lower than 2018. See below:

 

2018 salaries

https://www.spotrac.com/mlb/milwaukee-brewers/payroll/2018/

 

2017 salaries

https://www.spotrac.com/mlb/milwaukee-brewers/payroll/2017/

 

So with trades, signings, and in season acquisitions they were on the hook for roughly $40 million more last year than the year prior if I'm reading that correctly. Guessing they will be just slightly higher than that this year.

 

2019 salaries

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

 

Also, when does Aramis Ramirez come off the books? Nice gig, ARam.

[BrewFan130]

2018 was the last year of Aramis Ramirez’s deferred contract. He was paid $3 million in 2017 and 2018.

[Brew crew 92]

Just so everyone is on the same page, the most recent Forbes valuations (which are best guess estimates but still pretty thorough) has the Brewers at 7th in baseball in operating income (+$67 million). This was BEFORE the 2018 season and based on 2017 payroll numbers which were much, much lower than 2018. See below:

 

2018 salaries

https://www.spotrac.com/mlb/milwaukee-brewers/payroll/2018/

 

2017 salaries

https://www.spotrac.com/mlb/milwaukee-brewers/payroll/2017/

 

So with trades, signings, and in season acquisitions they were on the hook for roughly $40 million more last year than the year prior if I'm reading that correctly. Guessing they will be just slightly higher than that this year.

 

2019 salaries

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

 

Also, when does Aramis Ramirez come off the books? Nice gig, ARam.

 

2017 profit > 67 mil.

2018 profit > 47 mil not incl playoffs(fangraphs estimates 20-30 mil)

 

Very conservative extra 20 mil in revenue offset by 40 mil higher payroll

 

2019 > projection > Extra 150,000 attendance > extra 10 mil revenue

 

2019 >109+47+10 = 166 mil payroll this year to break Even

 

2018 playoff revenue not used >20-30 mil

[PeaveyFury]

It's worth noting for those not familar with accounting that operating income is NOT net profit, as it does not account for taxes or interest expense.

[homer]

It's worth noting for those not familar with accounting that operating income is NOT net profit, as it does not account for taxes or interest expense.

 

Yep. It's all we have to work with though since Forbes doesn't have access to all the numbers.

[PeaveyFury]

It's worth noting for those not familar with accounting that operating income is NOT net profit, as it does not account for taxes or interest expense.

 

Yep. It's all we have to work with though since Forbes doesn't have access to all the numbers.

 

No offense intended, just wanted that out there for the good of the discussion!

[DuWayne Steurer]

In these operating expense numbers, do the myriad of coaches, support staff, front office staff, scouts, and many, many other people required to run an MLB franchise not get paid? Saying "income minus MLB and MiLB payroll and taxes = PROFIT" isn't at all accurate.

[Brew crew 92]

It's worth noting for those not familar with accounting that operating income is NOT net profit, as it does not account for taxes or interest expense.

 

That’s true, but good cpa’s Can work magic so I used conservative estimates on revenue increases to I think more than offset that. Also IF low end playoff revenue added to just this years payroll that comes to:

 

186 mil one time payroll for 2019. So no wonder all these one year signings. Almost 60 million more for this year to spend so as not to lose $.

 

This is NOT a small market team at the present time. This not including the following:

 

Larger national tv deal to pay owners this year

Larger local tv deal starting next year

More income from mlb tv & streaming

There’s more ........ but I’ll stop there

As someone in a earlier post said > mark bought a cash cow

 

Just stop and think about this information for a time, ruminate on it.

If the payroll is 135-140 mil that’s a 40-45 mil gross profit again in a year we need a certain pitcher not yet signed. If we spend 20+ on him

This year we’d still have 8-13 mil to spend at trade deadline & call ups plus 20-25 mil gross profit.

[PeaveyFury]

It's really dangerous to make assumptions based on incomplete data. As Roco notes, I'd be curious to know how the operating expenses really look on paper- does that include minor league expenses? The large sums outlayed for the Maryvale project? Or just the day-to-day operations of the big league club itself?

 

Net of interest and taxes, I'm betting the actual 'net profit' is far less than the estimates being thrown around here based off incomplete surface-level data.

[RollieTime]

It's worth noting for those not familar with accounting that operating income is NOT net profit, as it does not account for taxes or interest expense.

 

That’s true, but good cpa’s Can work magic so I used conservative estimates on revenue increases to I think more than offset that. Also IF low end playoff revenue added to just this years payroll that comes to:

 

186 mil one time payroll for 2019. So no wonder all these one year signings. Almost 60 million more for this year to spend so as not to lose $.

 

This is NOT a small market team at the present time. This not including the following:

 

Larger national tv deal to pay owners this year

Larger local tv deal starting next year

More income from mlb tv & streaming

There’s more ........ but I’ll stop there

As someone in a earlier post said > mark bought a cash cow

 

Just stop and think about this information for a time, ruminate on it.

If the payroll is 135-140 mil that’s a 40-45 mil gross profit again in a year we need a certain pitcher not yet signed. If we spend 20+ on him

This year we’d still have 8-13 mil to spend at trade deadline & call ups plus 20-25 mil gross profit.

 

Payroll in 2017 was $69 million. Even if we say the 67 million in operating income was straight profit from 2017, that brings the break even point up to $136 million. Where are you getting the $186 million payroll from? I know that playoff revenue could probably push it a little higher for this season since we made the playoffs, but where is the extra $50 million coming from?

[Brew crew 92]

It's really dangerous to make assumptions based on incomplete data. As Roco notes, I'd be curious to know how the operating expenses really look on paper- does that include minor league expenses? The large sums outlayed for the Maryvale project? Or just the day-to-day operations of the big league club itself?

 

Net of interest and taxes, I'm betting the actual 'net profit' is far less than the estimates being thrown around here based off incomplete surface-level data.

 

You could be right. But the owners are gonna guard there books with everything they have Which is there right as a private business enterprise. So all we can do is guess based on certain info. I will say the more I read the more apparent it is as to how much $ these guys or corporations are raking in. Things could be worse in brewer land, we could have Nutting owner of the pirates making 50-70 mil year after year refusing to increase payroll as our owner>no thanks. I could be off on my figures, but not by tens of millions. Let’s forget the 186. But what if the 150-160 is break even. I think that’s a figure that would surprise most fans.

[young guns]

Didn't they just buy the high a team as well? I'd have to imagine they didn't pay that off all in one payment.

[Brew crew 92]

It's worth noting for those not familar with accounting that operating income is NOT net profit, as it does not account for taxes or interest expense.

 

That’s true, but good cpa’s Can work magic so I used conservative estimates on revenue increases to I think more than offset that. Also IF low end playoff revenue added to just this years payroll that comes to:

 

186 mil one time payroll for 2019. So no wonder all these one year signings. Almost 60 million more for this year to spend so as not to lose $.

 

This is NOT a small market team at the present time. This not including the following:

 

Larger national tv deal to pay owners this year

Larger local tv deal starting next year

More income from mlb tv & streaming

There’s more ........ but I’ll stop there

As someone in a earlier post said > mark bought a cash cow

 

Just stop and think about this information for a time, ruminate on it.

If the payroll is 135-140 mil that’s a 40-45 mil gross profit again in a year we need a certain pitcher not yet signed. If we spend 20+ on him

This year we’d still have 8-13 mil to spend at trade deadline & call ups plus 20-25 mil gross profit.

 

Payroll in 2017 was $69 million. Even if we say the 67 million in operating income was straight profit from 2017, that brings the break even point up to $136 million. Where are you getting the $186 million payroll from? I know that playoff revenue could probably push it a little higher for this season since we made the playoffs, but where is the extra $50 million coming from?

 

Fangraphs est 20-30 mil extra for playoffs plus extra attendance

It’s in post#132

[OnTheBlack]

The Royals also got insanely lucky to win that World Series, that is one of the worst World Series teams to win in the past 50 years.

 

Also talking about parking you have to realize that like half the fans in the stadium park on the street and walk to the game. I remember going to a playoff game one season where the parking lot was half empty because they jacked up the prices and cheap wisconsinites including myself refused to pay. That isn't the revenue stream it could be somewhere else~.

 

 

That the Royals got lucky in winning the WS wasn't the point, the point was that while they may be a bigger market than us technically, we generate more revenue. And comparing their payroll to ours was the point.

 

Also, I don't know what playoff game you went to with a half empty parking lot, but I've gone to most and have never seen that.

 

This cheap Wisconsonite thing is a myth. We spend more per capita on the Brewers than any other fanbase in the league. We support our team.

[homer]

 

Fangraphs est 20-30 mil extra for playoffs plus extra attendance

It’s in post#132

 

Do you have a link to that Fangraphs estimate?

[Brew crew 92]

Sorry I was mistaken, it’s not a fangraphs article, although Vince Genero helped contribute. Fields of green is website no link. Google: how much money are the playoffs worth to a mlb team, you’ll see it.

[pacopete4]

The Fields of Green- Value of a Postseason

 

Here is the link that he is referring to.

[Brew crew 92]

The Fields of Green- Value of a Postseason

 

Here is the link that he is referring to.

 

Thank you!

[KeithStone53151]

It's really dangerous to make assumptions based on incomplete data. As Roco notes, I'd be curious to know how the operating expenses really look on paper- does that include minor league expenses? The large sums outlayed for the Maryvale project? Or just the day-to-day operations of the big league club itself?

 

Net of interest and taxes, I'm betting the actual 'net profit' is far less than the estimates being thrown around here based off incomplete surface-level data.

 

I completely agree on the bold. Regarding the Maryvale project, safe to assume that entire project was capitalized down to every piece of equipment inside the building...so there is probably very little impact to net income right now considering it was completed/in service in 2019. I would expect minor league expenses to roll into operating expenses.

 

I think Braun recently made comments about the apperance of the Brewers and Mark A's willingness to spend. We've been basically operating against the grain for the last 2 years...spending while other teams are not spending. That coupled with Yelich being an incredibly likeable dude might help us lure in free agents on slightly team friendly deals in the near future. That's definitely how we got Moustakas, and probably plays a bit of a roll in how we got Grandal.

[And That]

Regarding the Maryvale project, safe to assume that entire project was capitalized down to every piece of equipment inside the building...so there is probably very little impact to net income right now considering it was completed/in service in 2019.

This part is going to be almost impossible to know due to a few factors.

 

-I'm sure the Brewers are doing a cost segregation study on improvements to Maryvale. Some of the improvements will be able to be expensed on their own merits, and quite possibly in 2018.

-Some of the improvements to the existing structures could be bonus depreciation eligible, and quite possibly in 2018.

-However, due to the incredibly confused language in the tax law, there is significant conflict between depreciation, qualified business income (which is a whole other can of worms for sport franchise owners), and the business interest expense limitation. In short, there are a bunch of tax treatments the Brewers could opt for, depending on the nature of the improvements, the activity the improvements are related to, the tax status of the LLC members, and a number of other factors.

-I'm not sure if the Brewers are a calendar year or fiscal year entity.

 

Even beginning to guess what the organization's net profits are, taxable income, or anything else like that currently is not possible. The Brewers and their CPA firm(s) probably don't even know what it is yet.

 

I'd also suggest it may not matter a whole lot. The Brewers' owners are driven by a desire to increase the value of the franchise. If they think spending some extra money now will help them be able to sell at a much higher rate later, they'll spend the money.

[Brew crew 92]

Regarding the Maryvale project, safe to assume that entire project was capitalized down to every piece of equipment inside the building...so there is probably very little impact to net income right now considering it was completed/in service in 2019.

This part is going to be almost impossible to know due to a few factors.

 

-I'm sure the Brewers are doing a cost segregation study on improvements to Maryvale. Some of the improvements will be able to be expensed on their own merits, and quite possibly in 2018.

-Some of the improvements to the existing structures could be bonus depreciation eligible, and quite possibly in 2018.

-However, due to the incredibly confused language in the tax law, there is significant conflict between depreciation, qualified business income (which is a whole other can of worms for sport franchise owners), and the business interest expense limitation. In short, there are a bunch of tax treatments the Brewers could opt for, depending on the nature of the improvements, the activity the improvements are related to, the tax status of the LLC members, and a number of other factors.

-I'm not sure if the Brewers are a calendar year or fiscal year entity.

 

Even beginning to guess what the organization's net profits are, taxable income, or anything else like that currently is not possible. The Brewers and their CPA firm(s) probably don't even know what it is yet.

 

I'd also suggest it may not matter a whole lot. The Brewers' owners are driven by a desire to increase the value of the franchise. If they think spending some extra money now will help them be able to sell at a much higher rate later, they'll spend the money.

 

CPA if I’ve ever heard one! I believe you.