Forbes Baseball Team Values

[pacopete4]

 

In fact I would argue a 155 mil payroll this year be zero borrowing.

 

There is nothing "fact" about that. That is 100% pure speculation.

 

You really had to say that?

 

Speculation or guesstimate yes it is!

 

You certainly don't post as though they are "guesstimates" or any sort of "speculation". You've made it pretty clear you don't believe ownership at all and that the numbers you keep trolling out there are the ones we should all believe.

[Brew crew 92]

Fact- Mark Antanasio $15 billion in his bank. He should be able to afford to give Kimbrell $500 million.

 

 

See I can throw out numbers to. But just like a certain poster, they are meaningless and almost a certain to be wrong.

 

But I’d say my #s closer to being the truth than yours in this example.

[Brew crew 92]

Again what say you?

 

Guesstimates?

 

Really am curious.

[RollieTime]

Wow, you guys are really starting to POUR IT ON!!!!

[FVBrewerFan]

This conversation reminds me of talking finances with my wife. "We should be able to afford" buying this, having that.

[Baldkin]

I'm just wondering if there is anybody on this board that bought a 200k house in 1999. Now that house is worth 350k. So because that house is now worth 150k more than it was than it was when they first bought it, they have decided to go out and buy themselves a brand new 2019 Aston Martin Vantage?

 

No, but they could.

 

I think we're using Midwest values to determine what is prudent and what is excessive. Just because we wouldn't buy such an expensive, flashy car doesn't mean we couldn't. And it doesn't mean he shouldn't. And you're talking about a 75 percent increase over 20 years, while the Brewers have had a 400 percent increase over 14 years.

 

Baseball teams go through cycles where they are competitive and then they're not. The Brewers are at the peak of that cycle. So if they find themselves lacking at a position and have a trade partner with an expensive player coming back, that contract shouldn't be a factor.

 

Here is an actual relevant analogy:

You bought a 250K house in 2001. That house is now valued at a cool Million Dollars. You decide to use that million dollars in equity to buy yourself a new Subaru Impreza for $20,000.

 

That is the equivalent statement. This is the type of spending people are advocating for.

 

According to Sportrac they are at a ~125 Million in payroll this season. They were at 110 million in 2012. That's 13% higher this year.

 

Since 2012, MLB has signed a new TV deal for 36% more money and average ticket prices have increased by 9%.

 

There is money if they want to spend it.

[pacopete4]

In 2012, did they spend $60M on a new Spring Training facility? More people just tossing around numbers that mean rather little and have very little substance behind them.

[Point Beer Is Best]

To reiterate what many others have said, the value of a company increasing is an unrealized gain. That means nothing in terms of cash available to increase payroll. Does it give the owner some leverage if they want to increase debt to finance a project? Yes. And as any good business would do, they would make that decision if they decided the return on investment made sense (like the Maryvale project). Could they also leverage themselves to increase payroll for a short amount of time? Unlikely because you'd be asking a lender to fund an operating expense (payroll) - NOT a capital investment with an expected ROI. Those are bad business decisions and may not even be possible.

 

Operating Profit/Income is the part of your income statement prior to subtracting Interest Expense (cost of borrowing money) and Income Taxes (someone else already pointed this out). Operating Profit less Interest & Taxes = Net Income/(Loss). But not all cash outlays are recognized in the fiscal year they are spent. As some of you pointed out, they spent several millions of dollars on a capital (that's a key word here) project with Maryvale. They undoubtedly financed a decent part of that. But that cash outlay is recognized through depreciation expense over the useful life (could be 10, 15 or 20 years) - not all in year 1. So the Maryvale project had a pretty minimal impact in terms of what Operating Income was reported for 2018, but a very substantial impact on the available cash and the debt-to-equity ratio for the team if they financed a large portion of the improvements.

 

In the end, most of the dollar amounts being thrown around here are pure speculation. But a lot of bad conclusions are being drawn based on misunderstanding of how to interpret financial information. And the biggest myth that keeps getting repeated is that the increase in franchise value must mean they have the financial means to support a huge payroll, even if it means taking on debt to support it.

[Point Beer Is Best]

Here is an actual relevant analogy:

You bought a 250K house in 2001. That house is now valued at a cool Million Dollars. You decide to use that million dollars in equity to buy yourself a new Subaru Impreza for $20,000.

 

That is the equivalent statement. This is the type of spending people are advocating for.

 

The type of spending people are advocating for is not buying an asset (a car). At least an asset has a multi-year use and is collateral against the loan. They are talking about using the unrealized gain in their homes (even if they have to take out a loan to cover it) and then hiring a maid or a gardener (operating expense).

[Fear The Chorizo]

To reiterate what many others have said, the value of a company increasing is an unrealized gain. That means nothing in terms of cash available to increase payroll. Does it give the owner some leverage if they want to increase debt to finance a project? Yes. And as any good business would do, they would make that decision if they decided the return on investment made sense (like the Maryvale project). Could they also leverage themselves to increase payroll for a short amount of time? Unlikely because you'd be asking a lender to fund an operating expense (payroll) - NOT a capital investment with an expected ROI. Those are bad business decisions and may not even be possible.

 

Operating Profit/Income is the part of your income statement prior to subtracting Interest Expense (cost of borrowing money) and Income Taxes (someone else already pointed this out). Operating Profit less Interest & Taxes = Net Income/(Loss). But not all cash outlays are recognized in the fiscal year they are spent. As some of you pointed out, they spent several millions of dollars on a capital (that's a key word here) project with Maryvale. They undoubtedly financed a decent part of that. But that cash outlay is recognized through depreciation expense over the useful life (could be 10, 15 or 20 years) - not all in year 1. So the Maryvale project had a pretty minimal impact in terms of what Operating Income was reported for 2018, but a very substantial impact on the available cash and the debt-to-equity ratio for the team if they financed a large portion of the improvements.

 

In the end, most of the dollar amounts being thrown around here are pure speculation. But a lot of bad conclusions are being drawn based on misunderstanding of how to interpret financial information. And the biggest myth that keeps getting repeated is that the increase in franchise value must mean they have the financial means to support a huge payroll, even if it means taking on debt to support it.

 

Thank you - that's a mic drop post that nails it. I'd add that regardless of franchise valuations or fan support, the brewers organization remains the smallest mlb market - which is a huge deal for realizing huge increases in tv revenue that are the biggest factors for some team's rapidly climbing revenues. The fact that the brewers consistenly arent among the lowest team payrolls across mlb despite their market size disadvantage is testament to the influence a rabid fan base can have on operating revenue and to Mark A. for likely putting a larger percentage of team revenues to player payroll than most other ballclubs.

[JimH5]

And the biggest myth that keeps getting repeated is that the increase in franchise value must mean they have the financial means to support a huge payroll, even if it means taking on debt to support it.

 

 

I trust that you're right. But let us assume that they don't take out a loan to pay operating expenses. What is a cash call? Isn't that a plea to the owners of a business for cash to fund day-to-day (operating) activities? Is that a loan to be repaid, or an infusion of new capital? Couldn't that money come from non-owners, and what would that be called?

 

What happened in the Connie Mack days when a team's revenue fell short of its expenses? Where did the money come from to satisfy the shortage, and what was that called?

 

And what about a team in today's era that budgets to have X in revenue, but actual revenue is less than X. Maybe ticket sales are lower than expected, or ad revenue, etc. If they had a tight budget to begin with, I'm assuming that shortage would be satisfied by their cash reserves. What if those reserves fell short?

 

They are talking about using the unrealized gain in their homes (even if they have to take out a loan to cover it) and then hiring a maid or a gardener (operating expense).

 

 

There are people who do that now. Mostly senior citizens or people on disability who have equity in their homes, a fixed income, and the sudden need for a day nurse or other living expenses associated with illness or aging. Those people are able to tap into that equity to meet living expenses. Or really, anyone who has ever opened a Home Equity Line of Credit. There are no limits on what one can purchase with that debt. Right?

[Fear The Chorizo]

And the biggest myth that keeps getting repeated is that the increase in franchise value must mean they have the financial means to support a huge payroll, even if it means taking on debt to support it.

 

 

I trust that you're right. But let us assume that they don't take out a loan to pay operating expenses. What is a cash call? Isn't that a plea to the owners of a business for cash to fund day-to-day (operating) activities? Is that a loan to be repaid, or an infusion of new capital? Couldn't that money come from non-owners, and what would that be called?

 

What happened in the Connie Mack days when a team's revenue fell short of its expenses? Where did the money come from to satisfy the shortage, and what was that called?

 

And what about a team in today's era that budgets to have X in revenue, but actual revenue is less than X. Maybe ticket sales are lower than expected, or ad revenue, etc. If they had a tight budget to begin with, I'm assuming that shortage would be satisfied by their cash reserves. What if those reserves fell short?

 

They are talking about using the unrealized gain in their homes (even if they have to take out a loan to cover it) and then hiring a maid or a gardener (operating expense).

 

 

There are people who do that now. Mostly senior citizens or people on disability who have equity in their homes, a fixed income, and the sudden need for a day nurse or other living expenses associated with illness or aging. Those people are able to tap into that equity to meet living expenses. Or really, anyone who has ever opened a Home Equity Line of Credit. There are no limits on what one can purchase with that debt. Right?

 

I'm envisioning Mark A heading to his local payday loan branch in a dollar store strip mall asking for a quick spot so he can sign a 7th inning guy right now.. maybe they can take out a reverse mortgage on miller park, too.

[Brew crew 92]

In 2012, did they spend $60M on a new Spring Training facility? More people just tossing around numbers that mean rather little and have very little substance behind them.

 

Bam $ 50,000,000 not included in any of these figures.

 

If Attanasio wanted to pay 80% of maryvale upfront he could have with bam money.

[Ron Robinsons Beard]

In 2012, did they spend $60M on a new Spring Training facility? More people just tossing around numbers that mean rather little and have very little substance behind them.

 

Bam $ 50,000,000 not included in any of these figures.

 

If Attanasio wanted to pay 80% of maryvale upfront he could have with bam money.

 

What is this $50 million you speak of?

[Brew crew 92]

In 2012, did they spend $60M on a new Spring Training facility? More people just tossing around numbers that mean rather little and have very little substance behind them.

 

Bam $ 50,000,000 not included in any of these figures.

 

If Attanasio wanted to pay 80% of maryvale upfront he could have with bam money.

 

What is this $50 million you speak of?

 

Bam tech

Mlb sold the technology they created for 1.5 billion

 

Last year each team received a check of 50 million

[pacopete4]

In 2012, did they spend $60M on a new Spring Training facility? More people just tossing around numbers that mean rather little and have very little substance behind them.

 

Bam $ 50,000,000 not included in any of these figures.

 

If Attanasio wanted to pay 80% of maryvale upfront he could have with bam money.

 

[Brew crew 92]

Google:

Forbes,statista,fangraphs est playoff revenue,new Fox tv deal, there are many others you’ll find while looking.

 

I am curious what you think the breakeven payroll is for this year?

 

One more thing: Rick Schlesinger said ticket sales up 20%

 

Corporate sponsors are way up. Didn’t say how much.

 

Can’t find that info by google.

 

My guesstimate for this year’s breakeven payroll:

156 million

[pacopete4]

Google:

Forbes,statista,fangraphs est playoff revenue,new Fox tv deal, there are many others you’ll find while looking.

 

I am curious what you think the breakeven payroll is for this year?

 

One more thing: Rick Schlesinger said ticket sales up 20%

 

Corporate sponsors are way up. Didn’t say how much.

 

Can’t find that info by google.

 

My guesstimate for this year’s breakeven payroll:

156 million

 

Who cares? Why would I even begin to speculate it? They've pushed their opening day payroll to compete this year. Made plenty of moves to put a really good team on the field. The payroll is the highest it has ever been at this point in our organization's history. I'm sure there is room if the right fit comes open throughout the year. There should be. Maxing out would be complete, an utterly, idiotic thing to do to yourself. Leaving a possible contending team with no wiggle room would be just flat out stupid. I don't know how else to say that. But spewing that MA is lying when saying all-in isn't true either. They have a budget. They have their parameters to work within as they should. You may want a winner but I'd be willing to bet that MA does too. He's shown that he's willing to do things that no other owner in Milwaukee has. He's fully invested with us in this. Other than that, again who honestly cares what I think their "breakeven payroll" is? What I get on you about is your agenda and your use of your opinion for fact. And you rationalize it with a sob story of how long you've been a fan of the Brewers like that should matter for being flat out wrong in many of your posts.

[Oxy]

Here is an actual relevant analogy:

You bought a 250K house in 2001. That house is now valued at a cool Million Dollars. You decide to use that million dollars in equity to buy yourself a new Subaru Impreza for $20,000.

 

That is the equivalent statement. This is the type of spending people are advocating for.

 

The type of spending people are advocating for is not buying an asset (a car). At least an asset has a multi-year use and is collateral against the loan. They are talking about using the unrealized gain in their homes (even if they have to take out a loan to cover it) and then hiring a maid or a gardener (operating expense).

 

 

I don't know any of this fancy financial jargon, but I think I can follow what people are saying. Still, it seems to me that there could be a HUGE difference in a permanent operating expense and a year-to-year variable operating expense. Say the property hosts a party every year and needs to hire entertainment. They can afford Steely Dan every year--OR they can hire The BoDeans for 4 years and bring in U2 every 5th year, even though in that year that U2 plays the property takes a loss. The 4 years they hired the BoDeans instead of Steely Dan makes up that difference, and keeps people interested, as Steely Dan year after year after year after year just doesn't cut it and people lose interest and then there is no more party at all.

 

Thus, they aren't leveraging the total value of the asset/equity, they are planning for moderate gains every year to pay for a moderate loss once every 5 years or so--all within the same category of expense.

[xisxisxis]

I haven't waded through all the crap in this thread, but to point out a few things:

 

1) Forbes has been doing these estimates for years. Early on there was a loud cry from the teams that Forbes doesn't know any details so the numbers are way wrong. You don't hear much these days so that's telling in itself.

 

2) Forbes doesn't know all the teams expenses outside of payroll, but they also don't know the exact ownership structure and how that structure relates to taxes and expenses. How is Mark A compensated for the use of his airplane? How are the capital expenditures depreciated? Are the Brewers allowed to depreciate Miller Park (most likely yes, while they don't own it, the condition and age directly relates to the value of the team). I would highly doubt the Brewers pay any income taxes on their operating profit as they can write off a lot of their non-payroll expenses.

 

2B) Many of the expenses that are thrown around as the Brewers spending money is also in the tax world known as a business expense/deduction. It's not weird timing that the Brewers decided to pay for the majority of Maryvale renovations at the same time they were getting a big check from MLBAM. They can write that expense off/against profits.

 

3) I highly doubt the team is carrying much/any debt. While there are advantages for tax purposes, you really have to have a large debt load for it to significantly provide a tax break.

 

4) For all those questioning the Brewers getting loans, do you realize the team had roughly $200M in debt when Attanasio's group bought the team. That debt wasn't Selig and his family throwing in their own personal money. They obtained loans. Does anyone think a team run the way Attanasio has wouldn't have a better equity position than the Selig's? They would likely have to beat off bankers wanting to throw money at them... So if Selig could borrow almost more than the value of the team, I'm sure Attanasio's Brewers would easily be able to borrow $500M tomorrow (if they wanted and I'm not advocating they do - just pointing out they CAN).

[Brew crew 92]

Google:

Forbes,statista,fangraphs est playoff revenue,new Fox tv deal, there are many others you’ll find while looking.

 

I am curious what you think the breakeven payroll is for this year?

 

One more thing: Rick Schlesinger said ticket sales up 20%

 

Corporate sponsors are way up. Didn’t say how much.

 

Can’t find that info by google.

 

My guesstimate for this year’s breakeven payroll:

156 million

 

Who cares? Why would I even begin to speculate it? They've pushed their opening day payroll to compete this year. Made plenty of moves to put a really good team on the field. The payroll is the highest it has ever been at this point in our organization's history. I'm sure there is room if the right fit comes open throughout the year. There should be. Maxing out would be complete, an utterly, idiotic thing to do to yourself. Leaving a possible contending team with no wiggle room would be just flat out stupid. I don't know how else to say that. But spewing that MA is lying when saying all-in isn't true either. They have a budget. They have their parameters to work within as they should. You may want a winner but I'd be willing to bet that MA does too. He's shown that he's willing to do things that no other owner in Milwaukee has. He's fully invested with us in this. Other than that, again who honestly cares what I think their "breakeven payroll" is? What I get on you about is your agenda and your use of your opinion for fact. And you rationalize it with a sob story of how long you've been a fan of the Brewers like that should matter for being flat out wrong in many of your posts.

 

We know your #1 agenda is to belittle me because I made your “ head hurt” reading thru posts.

 

Didn’t your parents tell you to respect and be kind to your elders?