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Brewers franchise value and ability to spend money


LouisEly
There is something inherently wrong with a sport that only has a few teams that can bid on the biggest FAs in any given year. Cole and Strasburg are rumored to be going to the same teams that were in the mix for Machado and Harper last year. I don't care about Attanasio spending more money on payroll when the entire system is set up specifically to benefit New York, Los Angeles, Chicago, Boston and Philadelphia. MLB keeps tinkering with pitch clocks, robot umpires, three man minimums, limiting mound visits, etc... in an effort to generate buzz about the sport when they are only ignoring the real problem.

 

The reality is when you pander to only the largest markets and small market teams only act as feeder clubs to them, you are turning a blind eye to the main issue in the sport. MLB thinks they need the Yankees, Dodgers, Red Sox, Cubs, etc...to keep interest in the sport. They continue to lose support to the NFL and can't figure out why. Perhaps it's because of the equal playing field where the Green Bays, Kansas Citys, and Pittsburghs of the world who have been historically well run are on a level playing field financially with those that are in New York, Los Angeles and Chicago.

 

Good luck to the players and the owners when the strike or lockout comes. Instead of folding MiLB franchises, why don't you fold all small markets? This way fans like us don't have to hold tight to 2-3 year windows of competing before having to spend 4-5 years rebuilding. All the while watching the annual Dodgers, Yankees, Red Sox playoff series.

 

This is the only sport with legit free agency. Nothing inherently wrong with it

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It was mentioned above...the payroll is a choice. Mark A could spend more on payroll, probably rather comfortably, he just chooses not to. I mean, think about the $$ he has or will shortly have coming in from American Family for naming rights. The merchandise sales from the rebrand etc. Even if he lost a bit of $$ for a year having payroll at say $175 million, he'd eventually make that up again. Anyone in business knows and accepts that sometimes you lose $$, but if you're smart, you get it back and then some. To me, payroll should never be below $140-$150 million and I'm guessing even with that, he'd still make a decent profit.

 

Haudricourt in his story in the JS earlier this week said the team finished in the red last season. Which means they did not make a profit. As much as we want them to spend, spend, spend, it doesn't work that way. Owning a baseball team is not a huge for-profit enterprise, but they shouldn't be expected to lose money, either. The naming rights and merchandise sales money are not much ... and those numbers are readily available. And when you drop payroll to gain money back, you end up losing attendance, merchandise sales and the like. With a small market team, it's about trying to find that happy medium. I think Attanasio probably went with the max payroll he was comfortable with last year, and took a hit in his pocketbook because of it. Can he handle that? Of course ... the guy is a billionaire. But he didn't get to be that billionaire by investing in enterprises that continuously lose him money.

 

And no ... he doesn't "owe" any of us fans an increased payroll or superstar players. We as fans aren't owed anything. It is entertainment, and if you are dissatisfied with that entertainment, you have other options to spend your money on. The Brewers are doing a fine job managing within the tight constraints of a constrictive and unfair MLB economic environment. The difference between MLB and the NFL is that the NFL is all about the league and the shield, and MLB is all about the individual teams. Therein lies the difference. The big money teams will never all there to be true parity, so teams like the Brewers have to scrape up every resource they can, think outside the box, and if enough things go right, they might just get a bite at the apple every few years.

 

The team made a profit when the team sucked a few years ago as well. Why? Because the fans supported a bad product based on the promise they would spend money when the time came. You can't look at businesses at that level on annual profit margins. You look at how sustainable the entire organization is. There are literally thousands of successful businesses that end up in the red over several years. Netflix, for example, didn't make a profit for years. I'm not sure if it makes much today. Yet they continue to attract investors. Why? Because it has the potential to make money in the long run.

 

The point isn't that they have to be profitable every year - it's that in order for the Brewers to have 2-4 year windows where their payroll might be able to stretch towards the top half of the league when they are in win-now mode, they need to slash payroll in order to regain profitability and recoup losses/save up profits to put towards future payroll increases. Their market size simply doesn't allow them to carry a $150M payroll consistently if they want the valuation of the team to continue increasing.

 

For those of you saying they could take out loans to pay for more expensive players based on their team's valuation - even if that's true, larger market teams could inevitably do the same damn thing and wind up getting bigger loans.

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The point isn't that they have to be profitable every year - it's that in order for the Brewers to have 2-4 year windows where their payroll might be able to stretch towards the top half of the league when they are in win-now mode, they need to slash payroll in order to regain profitability and recoup losses/save up profits to put towards future payroll increases. Their market size simply doesn't allow them to carry a $150M payroll consistently if they want the valuation of the team to continue increasing.

 

For those of you saying they could take out loans to pay for more expensive players based on their team's valuation - even if that's true, larger market teams could inevitably do the same damn thing and wind up getting bigger loans.

 

Correct me if I'm wrong but it seems to me this a window where they can win now.

There needs to be a King Thames version of the bible.
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It was mentioned above...the payroll is a choice. Mark A could spend more on payroll, probably rather comfortably, he just chooses not to. I mean, think about the $$ he has or will shortly have coming in from American Family for naming rights. The merchandise sales from the rebrand etc. Even if he lost a bit of $$ for a year having payroll at say $175 million, he'd eventually make that up again. Anyone in business knows and accepts that sometimes you lose $$, but if you're smart, you get it back and then some. To me, payroll should never be below $140-$150 million and I'm guessing even with that, he'd still make a decent profit.

 

So sick of this narrative. Mark is not going to take a loss just for a chance to win. He is running a business, not a video game franchise. If you feel so strongly that an acceptable payroll is $150 million then by all means, become a billionaire and buy the team and run the payroll up to $150 million. It's really easy to tell people how to run a business from the outside.

 

Brewers fans get awfully greedy after two straight playoff appearances. Can't we just accept the fact we are experiencing one of the most successful runs in the history of the franchise? Damn...

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It was mentioned above...the payroll is a choice. Mark A could spend more on payroll, probably rather comfortably, he just chooses not to. I mean, think about the $$ he has or will shortly have coming in from American Family for naming rights. The merchandise sales from the rebrand etc. Even if he lost a bit of $$ for a year having payroll at say $175 million, he'd eventually make that up again. Anyone in business knows and accepts that sometimes you lose $$, but if you're smart, you get it back and then some. To me, payroll should never be below $140-$150 million and I'm guessing even with that, he'd still make a decent profit.

 

Haudricourt in his story in the JS earlier this week said the team finished in the red last season. Which means they did not make a profit. As much as we want them to spend, spend, spend, it doesn't work that way. Owning a baseball team is not a huge for-profit enterprise, but they shouldn't be expected to lose money, either. The naming rights and merchandise sales money are not much ... and those numbers are readily available. And when you drop payroll to gain money back, you end up losing attendance, merchandise sales and the like. With a small market team, it's about trying to find that happy medium. I think Attanasio probably went with the max payroll he was comfortable with last year, and took a hit in his pocketbook because of it. Can he handle that? Of course ... the guy is a billionaire. But he didn't get to be that billionaire by investing in enterprises that continuously lose him money.

 

And no ... he doesn't "owe" any of us fans an increased payroll or superstar players. We as fans aren't owed anything. It is entertainment, and if you are dissatisfied with that entertainment, you have other options to spend your money on. The Brewers are doing a fine job managing within the tight constraints of a constrictive and unfair MLB economic environment. The difference between MLB and the NFL is that the NFL is all about the league and the shield, and MLB is all about the individual teams. Therein lies the difference. The big money teams will never all there to be true parity, so teams like the Brewers have to scrape up every resource they can, think outside the box, and if enough things go right, they might just get a bite at the apple every few years.

 

I can always count on Joey Meyer Bombs for logical, level-headed takes.

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It is all about the National TV money, MLB will never be the NFL or NBA with revenue sharing. Mine as well get over it.

 

I will say going in the red for a couple years isn't a huge deal on an asset that has quadrupled itself in 15 years. And just because he is in the red doesn't mean he isn't cash flow positive.

 

It is why a lot of normal people buy rental properties. They may have a taxable loss but will be cash flow positive on the year, which is what really matters. Or if they do turn a profit they are't subject to FICA taxes like people with wages. All while theoretically your asset appreciates over time.

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OK, so we push the payroll up to $150 million for a few years. But the team doesn't win a World Series. Then what? Push it to $175 million? $200 million. The fans that believe that the payroll is too low will never be happy, because it will never be enough.

 

The Brewers are doing things the right way, and are in a good spot right now. Nightengale's tweet from earlier in the week that rival executives are saying that the Brewers are going to slash payroll is an indication that they are doing it right. Teams like the Cubs are incredulous that the "tiny market Brewers" are beating their butts on the field, and messing up their high-payroll windows. The big payroll teams tend to look down their noses at the small market teams, so when a team like the Brewers rises up and has some sustained success, it really pisses these "haves" off. And that's pretty great.

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I will say going in the red for a couple years isn't a huge deal on an asset that has quadrupled itself in 15 years.

 

That is a theoretical number until Attanasio decides to cash out and sell the team. The actual value of the team mean very little when it comes to cash flow. Taking a yearly loss is still taking a yearly loss.

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I will say going in the red for a couple years isn't a huge deal on an asset that has quadrupled itself in 15 years.

 

That is a theoretical number until Attanasio decides to cash out and sell the team. The actual value of the team mean very little when it comes to cash flow. Taking a yearly loss is still taking a yearly loss.

 

Oh thanks for explaining the theoretical number to me.....name a sports franchise that has gone down in value. Please do.

 

As far as cash flow, no but you do know what does help cash flow, deferred revenue, financing capital improvements, deferred player contracts, etc. Oh i don't know maybe a sale of Bamtech where each MLB team got $50 Million.

 

We don't know what kind of yearly loss it is, so its impossible to speculate unless we take a look at their books which we never will be able to.

 

Am I supposed to think he is some kind of hero for going in the red for a couple years? Because I don't, I just think its a savvy finance person doing what they were taught to do. The man can do whatever he wants, we can choose to support or not support his business.

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The point isn't that they have to be profitable every year - it's that in order for the Brewers to have 2-4 year windows where their payroll might be able to stretch towards the top half of the league when they are in win-now mode, they need to slash payroll in order to regain profitability and recoup losses/save up profits to put towards future payroll increases. Their market size simply doesn't allow them to carry a $150M payroll consistently if they want the valuation of the team to continue increasing.

 

For those of you saying they could take out loans to pay for more expensive players based on their team's valuation - even if that's true, larger market teams could inevitably do the same damn thing and wind up getting bigger loans.

 

Correct me if I'm wrong but it seems to me this a window where they can win now.

 

Yes, and they have been operating at a loss for a few years...but there is also what, 4 months left to increase payroll to the point of where they were the past two? If their payroll is right where it is now on opening day I'd be miffed, but thankfully they still need to find 8 players to fill out their 40 man roster that will likely cost a bit of coin.

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I will say going in the red for a couple years isn't a huge deal on an asset that has quadrupled itself in 15 years.

 

That is a theoretical number until Attanasio decides to cash out and sell the team. The actual value of the team mean very little when it comes to cash flow. Taking a yearly loss is still taking a yearly loss.

 

This.

 

The fact is, the Brewers can't spend the way the Yankees, Mets, Phillies, Dodgers, Angels, Red Sox, Cubs, White Sox, Astros, and Nationals do on a sustained basis. They rely on the farm system and finding market inefficiencies.

 

They also may have to deal value to get value. I didn't want to lose Grisham, but Urias could be a huge trade chip three years from now, and if he hits as expected, he could help re-juvenate the farm system.

 

Hader may be the best reliever in baseball, but would it not be better to get Jeff McNeil and J.D. Davis for five years of control, have them fill holes at the corner IF spots, plus have the ability to flip them to help a rebuild should Yelich and Narvaez walk after three?

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I've never heard of any team borrowing against the value of the franchise. All investments as far as I have read are equity based. And then you get into a situation like the dodgers where the team is keeping payroll down to satisfy the promised returns to investors.

 

I also agree with other posters who have pointed out that finishing in the red is likely just accounting talk and not really indicative of the financial health of the franchise, the cashflow, or their ability to increase payroll.

 

Ultimately I don't care how much the team spends on payroll. I want to watch a team capable of making the playoffs. This team right now has some foundational pieces of a playoff contender and it would be a shame if the brewers don't continue to add to the roster to supplement that foundation that probably only lasts another 3 seasons.

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I will say going in the red for a couple years isn't a huge deal on an asset that has quadrupled itself in 15 years.

 

That is a theoretical number until Attanasio decides to cash out and sell the team. The actual value of the team mean very little when it comes to cash flow. Taking a yearly loss is still taking a yearly loss.

 

Oh thanks for explaining the theoretical number to me.....name a sports franchise that has gone down in value. Please do.

 

As far as cash flow, no but you do know what does help cash flow, deferred revenue, financing capital improvements, deferred player contracts, etc. Oh i don't know maybe a sale of Bamtech where each MLB team got $50 Million.

 

We don't know what kind of yearly loss it is, so its impossible to speculate unless we take a look at their books which we never will be able to.

 

Am I supposed to think he is some kind of hero for going in the red for a couple years? Because I don't, I just think its a savvy finance person doing what they were taught to do. The man can do whatever he wants, we can choose to support or not support his business.

 

Wasn't asking you to canonize Attanasio. Just pointing out that just because the overall value of the franchise has increased, it doesn't mean that there is extra cash around to start handing out more $100+ million player contracts. And you're right ... if you are upset that the team is not spending up to the standards you personally want them to, you can take your entertainment dollars elsewhere.

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I dont want this to go political in any way, but since we are all constantly bombarded with political ads that drive us nuts it got me to thinking...

 

Is there anything to stop a mlb team from fundraising for team payroll from its fanbase? Maybe it's because I love following baseball instead of politics, but to me it would be pretty cool and be money much better spent to have a grassroots fundraising campaign that raises funds for a team if the organization commits to a payroll budget over what their operating revenue can routinely support.

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OK, so we push the payroll up to $150 million for a few years. But the team doesn't win a World Series. Then what? Push it to $175 million? $200 million. The fans that believe that the payroll is too low will never be happy, because it will never be enough.

 

Not necessarily. I think what some of us fans are worried about is whether we are making decisions to improve the team or making decisions in order for Mark A. and the rest of the ownership group to hit their profit margins.

 

Obviously payroll is not everything as the Dodgers can attest to but I'd much rather the team sign good players that give us a 5% better chance to win the WS than try to get by on the cheap and hope whoever we find to fill spots can have a career year for us.

 

Look at what the Red Sox are doing with Mookie Betts. He undoubtedly is a top OF in baseball and would make the Red Sox better next year if he stays, but they are shopping him because they're worried paying him what he's worth will impact the "budget." This is an example of a team actively trying to make their team worse in order to save money. This is the stuff that is maddening as a fan.

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I've never heard of any team borrowing against the value of the franchise. All investments as far as I have read are equity based. And then you get into a situation like the dodgers where the team is keeping payroll down to satisfy the promised returns to investors.

 

I also agree with other posters who have pointed out that finishing in the red is likely just accounting talk and not really indicative of the financial health of the franchise, the cashflow, or their ability to increase payroll.

 

Ultimately I don't care how much the team spends on payroll. I want to watch a team capable of making the playoffs. This team right now has some foundational pieces of a playoff contender and it would be a shame if the brewers don't continue to add to the roster to supplement that foundation that probably only lasts another 3 seasons.

 

The Pilots ownership group borrowed money until they couldn't, and then were forced into bankruptcy.

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OK, so we push the payroll up to $150 million for a few years. But the team doesn't win a World Series. Then what? Push it to $175 million? $200 million. The fans that believe that the payroll is too low will never be happy, because it will never be enough.

 

Not necessarily. I think what some of us fans are worried about is whether we are making decisions to improve the team or making decisions in order for Mark A. and the rest of the ownership group to hit their profit margins?

 

Obviously payroll is not everything as the Dodgers can attest to but I'd much rather the team sign good players that give us a 5% better chance to win the WS than try to get by on the cheap and hope whoever we find to fill spots can have a career year for us.

 

Look at what the Red Sox are doing with Mookie Betts. He undoubtedly is a top OF in baseball and would make the Red Sox better next year if he stays, but they are shopping him because they're worried paying him what he's worth will impact the "budget." This is an example of a team actively trying to make their team worse in order to save money. This is the stuff that is maddening as a fan.

 

Intelligently run teams attach a value to every player regardless of how much they have to spend. The Brewers aren't dropping valuable players simply to slash payroll. Take a guy like Thames. Is a straight platoon 1B worth over $7 million? The Brewers obviously don't think so, and I'm betting they believe they can find a solution that will either replicate Thames' production for less money, or they have identified a solution that will have a full time role at 1B, thereby providing more value. Any successful business wouldn't keep an employee on if their value or production no longer justified their cost.

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I made my point about the lack of liquidity and practicality of transferring one's personal wealth in the other thread so I'll just toss out another consideration for those who want an owner to exceed the revenues and profits their business is generating...

 

You say take out loans. Fine lets talk about loans. What if the team starts the season terribly in a season you just upped the payroll $40 million via loans in a year you were already projected to finish in the red IF you drew 3 million fans and made a playoff run. Now because the star player got hurt in game 4, or the team is riddled with injuries, or half the team underperforms, suddenly only 2.5 million tickets get sold and half of them aren't even showing up in August and September. Revenues throughout the stadium nosedive. Now here you are on the hook for $40 million plus interest, and you've failed to meet the budget expectations you had WITHOUT the extra $40 million. Now your total shortfall for the year is suddenly $60 million.

 

So the obvious answer is "well your investment has quadrupled, so cry me a river". That $60 million just comes off the billion you'll cash out when you sell. Really now? So there's no chance of a sports bubble ever bursting? There's certainly no chance that the economics get so out of whack that one day it's so bad that no one wants to even bother owing a small market team. The general economy could tank. We could have another US Depression. Don't act like it can't happen, because just over a decade ago, it almost did. Suddenly no one can buy a ticket to a game. No one is paying cable subscription fees, no one is buying team apparel, and suddenly you can't even sell the team for what you paid.

 

The only day you can start counting the money of Forbes' estimated value for Mark A's Brewers is the day the funds hit his account when he sells. If he'd like to see a World Championship while he owns the team and also not risk his entire family fortune, he has to keep an eye on operating revenue and find people who can win within that structure. Anyone asking him to do more is asking him to do something they themselves would never do.

 

That's a kindergarten-level description of how this works. It's obviously much more nuanced. And yes there are owners who take that gamble that the quadrupling in value will be waiting for them at the end. They tend to be at an advanced age knowing they are near the end or very near ready to sell. But it's still a gamble nonetheless. Mark A. sounds like he wants to keep ownership in the family. Thus he's nowhere near the finish line or anywhere near that cash out payday. That means he likely has decades of risk that values will be maintained. He'd be an idiot to risk mortgaging his own wealth based on what today is nothing more than a myth.

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OK, so we push the payroll up to $150 million for a few years. But the team doesn't win a World Series. Then what? Push it to $175 million? $200 million. The fans that believe that the payroll is too low will never be happy, because it will never be enough.

 

Not necessarily. I think what some of us fans are worried about is whether we are making decisions to improve the team or making decisions in order for Mark A. and the rest of the ownership group to hit their profit margins.

 

Obviously payroll is not everything as the Dodgers can attest to but I'd much rather the team sign good players that give us a 5% better chance to win the WS than try to get by on the cheap and hope whoever we find to fill spots can have a career year for us.

 

Look at what the Red Sox are doing with Mookie Betts. He undoubtedly is a top OF in baseball and would make the Red Sox better next year if he stays, but they are shopping him because they're worried paying him what he's worth will impact the "budget." This is an example of a team actively trying to make their team worse in order to save money. This is the stuff that is maddening as a fan.

 

In the case of the Red Sox, they are looking to trim roughly $30M in money on an already bloated payroll to avoid really significant luxury tax problems because of how long they've remained over the threshold - their 2019 penalty was in the range of $13M. I believe if they don't achieve that this offseason by a certain time they are going to be paying out a much higher amount because the tax percentage over the limit jumps from 30% to 50%. If fans following that team don't understand why they need to slash payroll and why a guy like Betts is likely going to need to get traded since he'll be looking at $27+ Million dollars in arbitration, they're fools. The Red Sox goal could easily be to cut payroll for 2020 so they can resign Betts in 2021 - but if they don't trade him or other expensive players already on their roster now they'll never have enough money to improve their club via free agency until they reset their luxury tax timeline...that's how the current salary structure system is set up in MLB.

 

And the Red Sox are doing this not to regain profitability, they're probably still raking in cash despite their high payrolls because of TV money and being a huge market team. Part of it is because their new management and ownership doesn't like the fact their luxury tax payouts are helping small market teams like Tampa Bay find a way to build rosters that knock the Red Sox out of the playoffs every few years. In effect, their higher payroll is actually benefitting opposing organizations.

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Intelligently run teams attach a value to every player regardless of how much they have to spend. The Brewers aren't dropping valuable players simply to slash payroll. Take a guy like Thames. Is a straight platoon 1B worth over $7 million? The Brewers obviously don't think so, and I'm betting they believe they can find a solution that will either replicate Thames' production for less money, or they have identified a solution that will have a full time role at 1B, thereby providing more value.

 

That's true and that's why I tried to say at least in my case I hope Stearns' decisions are solely based on making the team better. If we can get a guy who can meet or exceed Thames' production for less money, great!

 

Any successful business wouldn't keep an employee on if their value or production no longer justified their cost.

 

I've unfortunately also seen businesses not willing to offer a raise to productive employees, only to see the employee leave for a competitor. I would hope MLB teams understand that sometimes having a high amount of turnover is not always a recipe for success. Sometimes it makes business sense to hire and retain highly compensated employees if they will generate more revenue (in this case wins).

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This article is from last off-season. It's a really long read, but it's also a really interesting read. Basically, unless your team is absolutely tanking, they're going to make money by being cheap. Baseball teams don't make more money by spending huge money on free agents. Big money free agents don't bring back an equal value in jerseys and tickets. Winning more games doesn't turn in to huge profits.

 

I believe that most of the owners want to win, but at the end of the day, they're all rich, and rich people are rich because they're generally business savvy and invest wisely. They're in this to make money, not lose money. We can talk all day about how we deserve a winner or this or that, but people who run businesses are always, always, always going to make decisions that are best for the bottom line.

 

 

"And the numbers were eye-opening: Just about every baseball free agent was being paid more than he was actually worth to his team in terms of the added revenue it would see thanks to extra wins. According to one researcher, Graham Tyler—then an undergrad econ student at Brown, and until recently the Rays’ director of player operations thanks in part to his pioneering studies in this area—teams only earn an extra $1.5 million from each additional win, meaning that a truly rational profit-maximizing owner (more on this in a minute) wouldn’t spend more than $6.75 million a year on a Machado-level talent."

 

https://deadspin.com/baseball-doesnt-need-collusion-to-turn-off-the-hot-stov-1831644811

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I think there are a few important points missing so far.

 

1. Player payroll is only a fraction of the Brewers overall financial picture.

 

2. Some organizations don’t make a profit on paper because they adjust their bond/debt lending payments owed towards both past and on-going capital projects to negate their cash surplus (to maximize amount paid towards debts).

 

3. Haudricourt and Nightengale don’t know the Brewers finances, and even if they knew for certain the team “operated in the red” they don’t even know what factors are included in the accounting for that claim. Do the teams owners and investors receive annual payouts that are accounted for among the teams expenses?

 

 

To give a better idea of how little we know here are some things that are likely factored as part of the Brewers revenue and expenses (not a complete list by any means).

 

Revenue Streams

 

MLB Revenue Sharing: In Major League Baseball, 48% of local revenues are subject to revenue sharing and are distributed equally among all 30 teams, with each team receiving 3.3% of the total sum generated. As a result, in 2018, each team received $118 million from this pot. Teams also receive a share of national revenues, which were estimated to be $91 million per team, also in 2018. (Link)

 

Regional Network TV Partnership Agreement

 

MLB Advanced Media Rights Agreements: MLBAM payments appear to vary, but remain healthy. We know that the sale of their digital content spinoff, BAM Tech, resulted in distributing each team a lump sum of $50 million in 2018 when the company was sold to Disney for over $1 billion.

 

Ticket Sales

 

Suites & Premium Seating Sales

 

Parking Sales

 

Sponsorship Agreements

 

Merchandise Sales: Used to be a third party retailer, I believe the team took the operation in-house.

 

Concessions and Catering: Operated by third party Delaware North, Brewers take is likely a 50% split of the revenue less expenses.

 

Facility/Event Rentals

 

Concerts/Special Events: By owning and operating Miller Park the Brewers have a six figure take home even after accounting for expenses and promoter/talent payouts every time they host a concert.

 

 

Expenses

 

Player / Coaches Salaries, Bonuses, and Benefits: Includes more than just the MLB team obviously.

 

Team and Staff Travel: Plenty of expense throughout the organization, but the big ticket cost is chartered flights and buses.

 

Hotels

 

Team and Media Meals/Catering

 

Operational Costs: So much goes into this category that I am certain most people would be truly astounded to know the actual number. Just to list a bunch of random things that go in this category (I’m missing plenty): Equipment, Marketing/Promotions Costs, Ticketing, Telecom (including Cell Phones), IT Infrastructure / Software, Signage, Printing, Office Items/Supplies, Portable Restrooms, Facility Amenities, Heating/Cooling, Water, etc.

 

Facility Maintenance Costs: With an aging retractable roof I am guessing Miller Park is much more expensive to maintain. Also, a lot of cost is put into maintaining the playing surface, training areas, etc. The building likely also requires a significant amount of annual maintenance.

 

Capital Projects: They have been pretty consistent about updating areas of the facility. Recently Concessions and this year the Outfield Seating Area have been major projects. A new scoreboard/video board (including relevant technological upgrades) falls in this category as well. Audio and stadium lighting are a couple of other big ticket items when replaced.

 

Debts / Loans / Bond Payments

 

Full-Time Organization Staff Salaries and Benefits: 100’s of full-time employees within the organization.

 

Part-Time and Outsources Staffing Costs: Includes game day staff (parking attendants, ushers, security, law enforcement, etc.) as well as outsourced services such as Custodial staffing.

 

 

Other Miscellaneous Considerations

 

Minor League Infrastructure Costs

 

Carolina Mudcats: Includes teams overall operating revenue and expenses since they are property of the ownership group.

 

Maryvale Spring Training Facility: Significant capital project to renovate/build complex. Annual operating costs.

 

Taxes: MLB teams are obviously not tax exempt.

 

Paying Investor Dividends: This is seemingly a big unknown. Do the Brewers annually distribute profits to investors? If that is the case the Brewers could be “in the red”, but a contributing factor could be distributing millions of dollars to their investors.

 

 

As I mentioned in the open, this is far from a complete list, but hopefully conveys the point that there is a multitude of factors impacting the Brewers financial breakdown and the details of the accounting are much more important than a generalized “in the black” or “in the red” assessment.

Not just “at Night” anymore.
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