The Business side of signing Cobb

[accinfo]

The accountant in me just thinks besides this being a very good decision from a competitive baseball point of view this was a real good business decision for this franchise.  This has injected a ton of hope in the fanbase, which should sell a few tickets, merchandise, etc.  If the starters can come out and be competitive I think that hope can build as the season goes on.  Being 3 or 4 games out of a wildcard with this starting staff I believe will feel different then it did last year.  I can see attendance returning to 2014 levels which might pretty much justify the signing of Cobb from purely a dollar and cents point of view.

[Frobby]

1 minute ago, accinfo said:

The accountant in me just thinks besides this being a very good decision from a competitive baseball point of view this was a real good business decision for this franchise.  This has injected a ton of hope in the fanbase, which should sell a few tickets, merchandise, etc.  If the starters can come out and be competitive I think that hope can build as the season goes on.  Being 3 or 4 games out of a wildcard with this starting staff I believe will feel different then it did last year.  I can see attendance returning to 2014 levels which might pretty much justify the signing of Cobb from purely a dollar and cents point of view.

At $14 mm per year (ignoring deferrals), and assuming an extra $50 per fan in revenue (tickets plus concessions), attendance would have to increase by 280,000 to justify the contract.    

Personally, I doubt that happens this year.    Most people have made their season ticket decisions by now, and those decisions were made when things looked bleak.  Fanfest attendance was down about 30%.    

Now if the team plays well, you may find a significant uptick in in-season sales.   But those are not as impactful as season ticket sales.    

[weams]

With the deferrals, I think he trades well after November should the Orioles be in a rebuild. 

[Rene88]

2 minutes ago, weams said:

With the deferrals, I think he trades well after November should the Orioles be in a rebuild. 

Agreed 100%

[theocean]

58 minutes ago, weams said:

With the deferrals, I think he trades well after November should the Orioles be in a rebuild. 

Cashner and Cobb are both very tradable if they need to.

[Frobby]

Very interesting provision in this contract, one I’ve never seen before.   In 2021, $4.75 mm of Cobb’s salary will be deferred; however, if he pitches less than 130 innings, then $9.75 mm will be deferred.    Man these contracts are getting convoluted!

2018: $14 mm ($6.5 mm deferred)

2019: $14 mm ($4.5 mm deferred)

2020: $14 mm ($4.5 mm deferred)

2021: $15 mm ($4.75 mm or $9.75 mm deferred)

https://www.mlbtraderumors.com/2018/03/orioles-to-sign-alex-cobb.html

[FuManchu]

According to the Post, he gets $2 million of the deferred money on Nov. 30, 2022, and $1.8 million annually on Nov. 30 from 2023-32. If he doesn’t pitch at least 130 innings in 2020, an additional $5.25 million of the final’s year salary would get deferred, payable $1.75 million annually on Nov. 30 from 2033-35.

[sportsfan8703]

15 hours ago, accinfo said:

The accountant in me just thinks besides this being a very good decision from a competitive baseball point of view this was a real good business decision for this franchise.  This has injected a ton of hope in the fanbase, which should sell a few tickets, merchandise, etc.  If the starters can come out and be competitive I think that hope can build as the season goes on.  Being 3 or 4 games out of a wildcard with this starting staff I believe will feel different then it did last year.  I can see attendance returning to 2014 levels which might pretty much justify the signing of Cobb from purely a dollar and cents point of view.

What about tv ratings?  They were down last year. Big Pete own most of MASN. Most fans would tune in to watch Cobb over an Ubaldo-esque SP. 

1 hour ago, FuManchu said:

According to the Post, he gets $2 million of the deferred money on Nov. 30, 2022, and $1.8 million annually on Nov. 30 from 2023-32. If he doesn’t pitch at least 130 innings in 2020, an additional $5.25 million of the final’s year salary would get deferred, payable $1.75 million annually on Nov. 30 from 2033-35.

Awesome news. Had not seen this before. Rep to you. 

[Redskins Rick]

5 minutes ago, sportsfan8703 said:

What about tv ratings?  They were down last year. Big Pete own most of MASN. Most fans would tune in to watch Cobb over an Ubaldo-esque SP. 

Awesome news. Had not seen this before. Rep to you. 

TV Ratings was still pretty good, until after they feel below .500

Also if you read the link below, you will see they believe the year before ratings was driven up by people escaping the political coverage. [Please no political talk, this was not my intent, just to mention that ratings were helped by events outside the sports arena.]

Quote

New data analyzed by the Sports Business Journal, a sister publication of the BBJ, shows that the O's average nightly rating on MASN was 5.18, the fifth best ratings in the league. However, that number was down 24 percent from last year.

SportsBusiness Journal reviewed data from all 30 MLB teams for the entire season, and found that 18 of the 30 MLB teams saw TV ratings decline. The Sports Business Journal did not publicize individual TV ratings for all 30 teams.

Baltimore was among the leaders in TV ratings at the halfway mark of the season, with roughly 55,000 viewers tuning in for every locally televised game as of July 17. Those numbers dipped slightly as the year went on — not surprising considering that the Orioles fell well below .500 and were out of the playoff race in early September.

https://www.bizjournals.com/baltimore/news/2017/10/12/orioles-ratings-still-among-best-in-mlb-despite.html

[beervendor]

16 hours ago, Frobby said:

At $14 mm per year (ignoring deferrals), and assuming an extra $50 per fan in revenue (tickets plus concessions), attendance would have to increase by 280,000 to justify the contract.    

Personally, I doubt that happens this year.    Most people have made their season ticket decisions by now, and those decisions were made when things looked bleak.  Fanfest attendance was down about 30%.    

Now if the team plays well, you may find a significant uptick in in-season sales.   But those are not as impactful as season ticket sales.    

Cobb's clearly not going to sell 280,000 tickets himself, but his presence - on paper, and in many of our hearts - turns us from a 4-th/5-th place team to at least contending for a WC. Simply being in contention late into the season has to be worth 5-10k per night over 24 Aug/Sep home dates. That's 120k-240k ($6-12MM using your $50/fan assumption). Also, his $14MM salary is incremental over the player he replaces. Now Cortez' (Cortez's?) league minimum is negligible, but he may have saved us signing some other hypothetical FA. Lots of conjecture, but if all goes well he could come pretty close to paying for himself. Not that that's the goal, of course.

What number goes on the back of all those new "COBB" jerseys? (#53 in TB - that clearly won't fly here)

[Frobby]

5 minutes ago, beervendor said:

Cobb's clearly not going to sell 280,000 tickets himself, but his presence - on paper, and in many of our hearts - turns us from a 4-th/5-th place team to at least contending for a WC. Simply being in contention late into the season has to be worth 5-10k per night over 24 Aug/Sep home dates. 

You know, you would think so, but then again, our attendance was down from 2015 (81 wIn season where we really weren’t in the race from late August on) to 2016 (when we were in playoff contention the entire season and clinched a spot on the final day).    In September, attendance was up by about 1,500 per game in 2016.  So while I’d expect a lot more fans to support a winning team, I don’t know that we’ll see it.   (I hope we’ll have a contending team and find out!)

[interloper]

2 minutes ago, Frobby said:

You know, you would think so, but then again, our attendance was down from 2015 (81 wIn season where we really weren’t in the race from late August on) to 2016 (when we were in playoff contention the entire season and clinched a spot on the final day).    In September, attendance was up by about 1,500 per game in 2016.  So while I’d expect a lot more fans to support a winning team, I don’t know that we’ll see it.   (I hope we’ll have a contending team and find out!)

Fans know when the pitching staff is a sham. It's why despite our early success last year, I only went to like 2 games. I just didn't believe in the team, and sure enough they tanked. 

The team now feels legitimate, and that counts for something, even subconsciously.