Duquette on Sirius XM Today

[stomperspc]

It doesn't add up. Our payroll will increase 20 mil. Yet MLB will be paying every team 25 mil, the revenues from the playoffs and added attendence is around 10 mil. That doesn't even include the atleast 29 mil that MASN paid the O's. Thats over 50 mil dollars. Where's the other 30* mil going?

What's the $29 m from MASN you are referring to? Is that just the total annual TV rights fees or something else I am unaware of? You are treating it like some sort of one time windfall which I am not sure it is. Unless it is something like that or the incremental increase in TV rights the Orioles will begin receiving in 2013, I am not sure it is relevant to this discussion.

So ignoring that for the moment because I don't know what it is, let's look at the other components.

The team has approximately $10 m in one-time additional revenue from the playoffs. If we say a $20 m bump in payroll baring any unexpected moves, that leaves a $10 m increase in player payroll for 2013 that is not offset by additional payroll.

The $25 m increase in National TV rights doesn't start until 2014 so that has nothing to do with 2013 payroll. Even in 2014 and beyond, it is a questionable business practice to take all of that additional revenue and invest it into a single asset annually (which is essentially what you would be doing by signing Hamilton at $25 m per year). It might work out, but it is certainly a big risk and should be viewed as such.

Therefore, putting aside the $29 m MASN money for now since I am not sure what it is, the Orioles really only have a $10 m increase in revenue that can be spent on 2013 payroll and payroll is going to increase by $20 m at least this year. It is fine if you think the team can support a larger payroll, but the numbers you are throwing out don't support your argument. It just is not accurate to act like the Orioles have all of this additional cash laying around for 2013 payroll that is not being used.

[CanadianOriole]

Thanks for the recap Paul. Can you elaborate a little on the call he made to Angelos about bringing up another pitcher after the 18 inning game. Did it sound like he had to get permission to bring up a pitcher? I sure hope not.

The pitcher they called up after the 18 inning game was Dylan Bundy right? That may explain why Angelos got a call. Doubt Duquette calls Peter every time they make a minor roster move. I hope not anyway...

[Roll Tide]

What's the $29 m from MASN you are referring to? Is that just the total annual TV rights fees or something else I am unaware of? You are treating it like some sort of one time windfall which I am not sure it is. Unless it is something like that or the incremental increase in TV rights the Orioles will begin receiving in 2013, I am not sure it is relevant to this discussion.

So ignoring that for the moment because I don't know what it is, let's look at the other components.

The team has approximately $10 m in one-time additional revenue from the playoffs. If we say a $20 m bump in payroll baring any unexpected moves, that leaves a $10 m increase in player payroll for 2013 that is not offset by additional payroll.

The $25 m increase in National TV rights doesn't start until 2014 so that has nothing to do with 2013 payroll. Even in 2014 and beyond, it is a questionable business practice to take all of that additional revenue and invest it into a single asset annually (which is essentially what you would be doing by signing Hamilton at $25 m per year). It might work out, but it is certainly a big risk and should be viewed as such.

Therefore, putting aside the $29 m MASN money for now since I am not sure what it is, the Orioles really only have a $10 m increase in revenue that can be spent on 2013 payroll and payroll is going to increase by $20 m at least this year. It is fine if you think the team can support a larger payroll, but the numbers you are throwing out don't support your argument. It just is not accurate to act like the Orioles have all of this additional cash laying around for 2013 payroll that is not being used.

Angelos and the O's ownership group owns MASN. The ownership has resources available from MASN to spend if they want to. Anybody who doesnt believe this is just a fool. I'm not arguing the amount ...But the Yankees pay their entire payroll with TV revenue.

[Hooded Viper]

What's the $29 m from MASN you are referring to? Is that just the total annual TV rights fees or something else I am unaware of? You are treating it like some sort of one time windfall which I am not sure it is. Unless it is something like that or the incremental increase in TV rights the Orioles will begin receiving in 2013, I am not sure it is relevant to this discussion.

So ignoring that for the moment because I don't know what it is, let's look at the other components.

The team has approximately $10 m in one-time additional revenue from the playoffs. If we say a $20 m bump in payroll baring any unexpected moves, that leaves a $10 m increase in player payroll for 2013 that is not offset by additional payroll.

The $25 m increase in National TV rights doesn't start until 2014 so that has nothing to do with 2013 payroll. Even in 2014 and beyond, it is a questionable business practice to take all of that additional revenue and invest it into a single asset annually (which is essentially what you would be doing by signing Hamilton at $25 m per year). It might work out, but it is certainly a big risk and should be viewed as such.

Therefore, putting aside the $29 m MASN money for now since I am not sure what it is, the Orioles really only have a $10 m increase in revenue that can be spent on 2013 payroll and payroll is going to increase by $20 m at least this year. It is fine if you think the team can support a larger payroll, but the numbers you are throwing out don't support your argument. It just is not accurate to act like the Orioles have all of this additional cash laying around for 2013 payroll that is not being used.

Rep to you!

[TonySoprano]

It is fine if you think the team can support a larger payroll, but the numbers you are throwing out don't support your argument. It just is not accurate to act like the Orioles have all of this additional cash laying around for 2013 payroll that is not being used.

Your argument assumes that we were at our payroll limit in 2012. Do you know for certain that we couldn't already have afforded a larger payroll?

[stomperspc]

Angelos and the O's ownership group owns MASN. The ownership has resources available from MASN to spend if they want to. Anybody who doesnt believe this is just a fool. I'm not arguing the amount ...But the Yankees pay their entire payroll with TV revenue.

Nobody can say for sure without seeing the financials of the Yankees, YES, and other related companies but I am fairly confident you are over simplifying things here. The Yankees and YES are separate companies. They Yankees simply don't dip into YES cash to pay for their team payroll. They use the set TV rights fees they receive from YES in any way they see fit (including on payroll) but those are set annual fees. You are the one who is mistaken if you believe that the Yankees have unlimited access to YES funds to pay for payroll. This is not how these things work in any line of business when we are talking about a separate company structure. Do you think NewCorp is just going to sign off on YES paying dividends to the Yankees whenever the Yankees need additional money for payroll?

MASN is no different. Angelos cannot just decide he needs more money for the Orioles and take a money out of MASN (outside of the set TV rights fees) as needed. There are a variety of reasons that cannot happen, the biggest of which is there are other owners of MASN (including the Nats).

[Dark Helmet]

What's the $29 m from MASN you are referring to? Is that just the total annual TV rights fees or something else I am unaware of? You are treating it like some sort of one time windfall which I am not sure it is. Unless it is something like that or the incremental increase in TV rights the Orioles will begin receiving in 2013, I am not sure it is relevant to this discussion.

So ignoring that for the moment because I don't know what it is, let's look at the other components.

The team has approximately $10 m in one-time additional revenue from the playoffs. If we say a $20 m bump in payroll baring any unexpected moves, that leaves a $10 m increase in player payroll for 2013 that is not offset by additional payroll.

The $25 m increase in National TV rights doesn't start until 2014 so that has nothing to do with 2013 payroll. Even in 2014 and beyond, it is a questionable business practice to take all of that additional revenue and invest it into a single asset annually (which is essentially what you would be doing by signing Hamilton at $25 m per year). It might work out, but it is certainly a big risk and should be viewed as such.

Therefore, putting aside the $29 m MASN money for now since I am not sure what it is, the Orioles really only have a $10 m increase in revenue that can be spent on 2013 payroll and payroll is going to increase by $20 m at least this year. It is fine if you think the team can support a larger payroll, but the numbers you are throwing out don't support your argument. It just is not accurate to act like the Orioles have all of this additional cash laying around for 2013 payroll that is not being used.

If the O's can carry an 85M payroll (without MASN), as they have shown before they even had an RSN, then they can carry a 110M payroll, with just the 25M alone. But, to rule out MASN is crazy. I uderstand the additional 25M won't kick in until 2014. But contracts can be structured around that. I'm sure PA can bite the bullet, and make a smaller profit for one season.

[stomperspc]

Your argument assumes that we were at our payroll limit in 2012. Do you know for certain that we couldn't already have afforded a larger payroll?

Of course not. I do believe that is irrelevant to this conversation, however. All that really matters is what the player payroll budget is/what the team is willing to spend on player payroll. I do believe that the Orioles' 2012 player payroll was probably within spitting distance of their player payroll budget. So if we assume that any incremental revenue is going right to the payroll budget (which might be a big assumption in itself), then we should be adding that to the Orioles' actual 2012 payroll/budget. I would be perfectly fine if the Orioles expanded their payroll budget (before even taking additional revenue into consideration) but there is nothing to indicate that is going to happen. So arguing about what their theoretical payroll budget could be seems pointless to me. I chose to focus on the reality of the situation and not bang my head against the wall because I believe the Orioles could and should spend more on player payroll.

[Ampontan]

No I dont think the Gomes contract was good. However, if we are to believe DD we shouldnt expect big moves? So, if McLouth is the guy they want in LF (seems to be) then whats holding it up? Are they negotiating a 200k difference in aski.g price? McLouth probaly could have been had for a 2/6 deal. Now, the price is higher because of Gomes. Dragging their feet on a minor move like McLouth, has probably pushed him out of their price range.

This is the equivalent of creating a strawman and then dressing up in it for Halloween to scare the children. No one has the faintest idea of the details of the negotiations with McLouth, so it is pointless to speculate on them, much less use that speculation to present an argument.

[TonySoprano]

All that really matters is what the player payroll budget is/what the team is willing to spend on player payroll.

Therein lies the point of contention, that is, the willingness of ownership to spend.

[stomperspc]

If the O's can carry an 85M payroll (without MASN), as they have shown before they even had an RSN, then they can carry a 110M payroll, with just the 25M alone. But, to rule out MASN is crazy. I uderstand the additional 25M won't kick in until 2014. But contracts can be structured around that. I'm sure PA can bite the bullet, and make a smaller profit for one season.

I am not ruling out MASN. I am just trying to determine what the actual MASN money is we should be talking about. We cannot act as if all MASN revenue is available to the Orioles because it isn't. That's not how these things work. The relevant "MASN money" is the TV rights fees that MASN pays the Orioles because that is the actual MASN money that hits the team's books. There might be other factors at play depending on how the MASN ownership is actually structured (ie. I am assuming the Orioles own the stake in MASN and not Angelos directly, but I don't know for sure) but that's the basics of it.

Also like I said, I really don't concern myself with how much the team "could" spend because none of us really know and it ultimately doesn't matter. The Orioles have set a player payroll budget in the past . There is no reason to believe that budget will substantially change beyond any additional/new revenues that the team gets. That's why I am only concerned with incremental or additional revenue the Orioles will be getting in 2013 and beyond when discussing how much payroll *could* increase. That's also why I was curious to know what the $29 m number was.

[Dark Helmet]

This is the equivalent of creating a strawman and then dressing up in it for Halloween to scare the children. No one has the faintest idea of the details of the negotiations with McLouth, so it is pointless to speculate on them, much less use that speculation to present an argument.

Your right, we don't have the details involving negotiations with McLouth. But, it's a good assumption, that Gomes' getting 5M per year, may have taken McLouth out of the O's comfortable price range. Where they could have probablly had him far cheaper.

[stomperspc]

Your simply wrong about this. I read this several years ago from a New York source. It mentioned that they dont need to rely on a single $1.00 from ticket revenue or concessions to field their team.

I strongly doubt that. It is certainly possible that the annual TV right fees YES pays the Yankees covers payroll entirely, but I never disputed that. Those right fees are set though. I am making these numbers up but let's say YES pays the Yankees $300 m annually in TV right fees. Now let's say the Yankees decide to have a $500 m payroll next season. I really doubt they are taking cash right ouf of YES to find that additional payroll. The way those companies are structured (YES and the Yankees have a brother-sister relationship, not a parent-subsidiary relationship) makes that difficult to pull off to begin with. Considering YES has other owners (and soon will be 49% owned by NewsCorp) I also have trouble believing that those other owners would allow the Yankees to use YES as their own personal piggy bank.

Therein lies the point of contention, that is, the willingness of ownership to spend.

I get that. Look, I would have no qualms at all if Angelos decided he was going to increase the payroll budget just like that. I just find it pointless to argue that because there is so much we don't know and so much that is out of our control. A discussion on how much more the Orioles could add to payroll based on additional revenue feels relevant because Duquette has indicated that payroll increases would come with revenue increases.

[Dark Helmet]

I am not ruling out MASN. I am just trying to determine what the actual MASN money is we should be talking about. We cannot act as if all MASN revenue is available to the Orioles because it isn't. That's not how these things work. The relevant "MASN money" is the TV rights fees that MASN pays the Orioles because that is the actual MASN money that hits the team's books. There might be other factors at play depending on how the MASN ownership is actually structured (ie. I am assuming the Orioles own the stake in MASN and not Angelos directly, but I don't know for sure) but that's the basics of it.

Also like I said, I really don't concern myself with how much the team "could" spend because none of us really know and it ultimately doesn't matter. The Orioles have set a player payroll budget in the past . There is no reason to believe that budget will substantially chance beyond any additional/new revenues that the team gets. That's why I am only concerned with incremental or additional revenue the Orioles will be getting in 2013 and beyond when discussing how much payroll *could* increase. That's also why I was curious to know what the $29 m number was.

The 29M is the right's fee's the team is guaranteed. I used that as a low end estimate. But, I would be willing to bet the O's make much more then that. The Padres are a similar market, and they were paid 200M up front plus 50M a year in revenues in their TV deal. I'd feel comfortable betting the O's pull in atleast 50-60M a year in profits from MASN. But you are correct, we really don't know how much MASN is figured into the current payroll. I do know, that the O's were a team that carried roughly a 75M payroll before MASN. So, I don't think a payroll that's consistantly in the 105-110M range is unrealistic. And that doesn't include the 25M that starts in 2014. I'd say 120M would be sustainable then, but I expect to at the least see this team operating at a 110M.

[Frobby]

So the Gomes contract was a good one? The BJ trade could really blow up in there face! Why don't we wait until the winter meetings are over before we start saying we are 11 games worse than last year!

I would modify this to say why don't we wait until the winter is over, not just the winter meetings. Even that may be premature considering all the moves Duquette made in-season last year.

I'd like to see us make some moves this winter, but if last year showed us anything, you have to see how it all fits together once the season starts to really know what you have.