Greene on the way to Baltimore? No.

[davearm]

Does anyone have revenue and profit figures for the Orioles organization? I simply can't imagine a ballclub that attracts 10-15K people per game all year can afford to spend $100M on payroll, on top of a souring economy. Why does everyone assume that MacPhail and Angelos are cheap and nobody ever thinks "Where is all that money actually going to come from?"

I think this is a very legitimate question to be asking.

For several years now the O's have had attendance in the bottom 1/3 of the league.

Now the industry is bracing for an across-the-board drop in attendance due to the economy... something that you'd figure would impact a team like Baltimore as much as any.

And in the face of all that, the projection is for a large increase in payroll? That doesn't compute.

[Hank Scorpio]

I think this is a very legitimate question to be asking.

For several years now the O's have had attendance in the bottom 1/3 of the league.

Now the industry is bracing for an across-the-board drop in attendance due to the economy... something that you'd figure would impact a team like Baltimore as much as any.

And in the face of all that, the projection is for a large increase in payroll? That doesn't compute.

I would imagine it's got something to do with MASN dollars...

[tvdoc]

I disagree because you would be right back in this situation in 2010 because odds are he wouldn't stay here. If he rebounds from his injury he is gone, if he doesn't we are stuck with the drek we have now MINUS players and money.

I would rather have two years of Izturis for the same price as one year of Greene. I feel he is a bad risk.

I agree and remember Greene hit .213 before he broke his hand so don't blame his bad year on the injury. How do we know he won't have problems from the hand this coming year? 6.5 mill RISK

[davearm]

Maybe so, but if you are one of the people balking at a $5 dollar cup of coffee at Starbucks, you are a lot less likely to spend $200k on a Ferrari. Doesn't mean it won't happen. But it is quite possible that if you you are balking at spending $5 for a cup of coffee, it is because you don't have a lot of spare change laying around.

On the other hand, someone who has no problem paying $5 for a cup of coffee is a lot more likely to pay for a Ferrari than one who won't pay for expensive coffee.

You might balk at spending $5 at Starbucks because you don't have the money.

Or you might balk at spending $5 at Starbucks simply on principle.

The point is, the "don't have the money" explanation is not something we should be so quick to assume when it comes to this Greene situation.

[olehippi]

He is a better option than anything we have now. There are no young SS of the future coming up through our system and I doubt we would trade away the pieces for a nother team to give up their young one.

Izturis fits our needs, he won't set the world on fire but he will be leagues better than what we trotted out there last year.

If I am running the show I sign Izturis and then draft a SS high.

Izturis, right now - barring new developments, is a necessary evil for the team.

I do agree that Izturis better fits our needs until someone better comes available. He is solid defensively, a decent hitter, and is relatively cheap.

I was never sold on Greene being the long-term answer for the Orioles, and who knows if he would have resigned with us after this year. And I'm not ready to give up on Hayden Penn yet...I have a feeling he will step up and shine this year...in Baltimore.

[Fan4Life]

Originally Posted by Enjoy Terror

Does anyone have revenue and profit figures for the Orioles organization? I simply can't imagine a ballclub that attracts 10-15K people per game all year can afford to spend $100M on payroll, on top of a souring economy. Why does everyone assume that MacPhail and Angelos are cheap and nobody ever thinks "Where is all that money actually going to come from?"

I think this is a very legitimate question to be asking.

For several years now the O's have had attendance in the bottom 1/3 of the league.

Now the industry is bracing for an across-the-board drop in attendance due to the economy... something that you'd figure would impact a team like Baltimore as much as any.

And in the face of all that, the projection is for a large increase in payroll? That doesn't compute.

Stoner and I did some basic number crunching for MASN revenues based on what had been printed recently. I came up with $70MM+ annually to be divvied up between the Nats and O's from subscriber fees only. While not something you can count on, there is also the welfare from the Yankees.

[davearm]

I would imagine it's got something to do with MASN dollars...

You could be right, although my completely speculative guess would be that the MASN revenue stream has leveled off, or is close to it.

That opinion would be based on an assumption that the number of households with access to MASN is not still ramping up significantly. That is to say, by this point, the folks that are going to get it, have already gotten it.

So if MASN is not expanding its audience appreciably, then it is probably not expanding its revenues appreciably either.

[davearm]

Stoner and I did some basic number crunching for MASN revenues based on what had been printed recently. I came up with $70MM+ annually to be divvied up between the Nats and O's from subscriber fees only. While not something you can count on, there is also the welfare from the Yankees.

Thanks for the info FFL.

Did you conclude that your $70MM number is still growing? If so, at what sort of rate?

[nadecir]

Stoner and I did some basic number crunching for MASN revenues based on what had been printed recently. I came up with $70MM+ annually to be divvied up between the Nats and O's from subscriber fees only. While not something you can count on, there is also the welfare from the Yankees.

$52 million of MASN revenue goes out the door in the form of broadcast rights fees to both teams. The broadcast fees the teams receive are not new. Comcast paid broadcast rights fees to the Orioles when Comcast broadcast the Orioles games.

Then you have operating and production costs, and broadcast rights fees for other sports. It's safe to say that free cash flow from MASN doesn't approach $70 million, and the Nats get a portion of whatever free cash flow there is from MASN.

[Fan4Life]

Thanks for the info FFL.

Did you conclude that your $70MM number is still growing? If so, at what sort of rate?

"To start 2008, MASN was in 5.2M homes, with expectation that it could grow to 7M."

So it doesn't appear like there is much room for growth unless they are still fighting being carried in some markets not included in that statement.

[Fan4Life]

$52 million of MASN revenue goes out the door in the form of broadcast rights fees to both teams. The broadcast fees the teams receive are not new. Comcast paid broadcast rights fees to the Orioles when Comcast broadcast the Orioles games.

Then you have operating and production costs, and broadcast rights fees for other sports. It's safe to say that free cash flow from MASN doesn't approach $70 million, and the Nats get a portion of whatever free cash flow there is from MASN.

http://baltimore.bizjournals.com/bal...ml?t=printable

Friday, April 4, 2008

Getting in the game

Baseball anchors the Mid-Atlantic Sports Network's fortunes

Nicholas Griner | Staff

A fledgling network, MASN is making a name for itself as the home of two Major League Baseball franchises.

Created for Orioles owner Peter G. Angelos after Major League Baseball relocated the Montreal Expos to Washington, both the Orioles and Nationals have a stake in the network -- Angelos owning the lion's share.

Still finding its financial footing, MASN could hold the key to the on-field fortune of the Baltimore Orioles, Angelos said.

"Combined with the general revenue of a baseball operation it would give the Orioles every opportunity to compete with every other franchise," he said.

Cash cows

Regional sports networks have proven to be a financial boon to some of baseball's most successful franchises. When the Boston Red Sox were sold for $700 million in 2002, which included an 80 percent stake in the team's cable network, the New England Sports Network, experts pegged NESN to be worth more than the team.

In New York, the Yankees own 38 percent of the YES Network, worth in excess of $3 billion.

Regional sports networks are transforming the sports television landscape by providing viewers inside access to the franchises in which it has stakes and by adding a slew of new sports programming.

Currently, MASN is carried by 20 cable and satellite providers spanning the network's territorial rights in seven states from Harrisburg, Pa., to Charlotte, N.C. The network is carried in around 5.2 million homes, but can top out at 7 million.

The bulk of the revenue comes from subscriber fees, he said. MASN could take in excess of $2 per subscriber within 50 miles of Baltimore and Washington, and half of that in outer markets, Mansell said. It can take regional sports networks as many as seven years to generate more than 30 percent of revenue from ads, he said.

How many subscribers of that 5.2m are within 50 miles? If you assumed 25% (which has to be killer low) that would be 1.3m.

So, (1.3m @ $2 = $2.6m) + (3.9m * $1 = $3.9m) = $6.5m from subscribership only.

Now take that $6.5m * 12 months = $78 million is MASN revenues from ONLY subscribership. I'm not sure how much of that is divvied up between the Nat's and O's.

[nadecir]

http://baltimore.bizjournals.com/bal...ml?t=printableNow take that $6.5m * 12 months = $78 million is MASN revenues from ONLY subscribership. I'm not sure how much of that is divvied up between the Nat's and O's, but it is substantial.

Yes, MASN makes revenue per subscriber. That's just revenue. MASN has costs to pay before it can split any free cash with the two teams.

MASN pays out broadcast rights fees to the Nationals and Orioles. In addition there are other costs, like operating costs, before any profits are are available to either team. That's what I think you don't understand.

In 2008, MASN paid $26 million each to the Orioles and Nationals in broadcast rights fees. So a big part of MASN revenue goes out the door right away.

http://www.sportsbusinessdaily.com/article/124315

Comcast paid the Orioles broadcast rights fees before MASN was around, so the rights fees the Orioles receive is a bit higher, but not that much different than before MASN. If you think the Orioles and Nationals are sharing $78 million in free cash flow from MASN, then I think you are over estimating what MASN means to both teams. MASN helps both teams, but not nearly that much.

[zff4]

Stoner and I did some basic number crunching for MASN revenues based on what had been printed recently. I came up with $70MM+ annually to be divvied up between the Nats and O's from subscriber fees only. While not something you can count on, there is also the welfare from the Yankees.

MASN, a separate entity from the Orioles, paid fees of $25 million to both clubs in 2008. Subscriber numbers don't increase the fees paid. While fair market value may take into consideration subscriber numbers, Angelos is essentially bidding with himself and hence the profitability. The fees paid to the team is independent of MASN profits so I don't know where subcribers come into it. The team gets a flat fee yearly which is useful since it's guaranteed and not susceptible to fluctuations during the season. But it's a flat fee. O's only got 25 mill.

here if it's useful

edit: ah, I see that you include the partial ownership stake in MASN that each team has and project MASN profits in terms of those ownership stakes. OK.

[Fan4Life]

Yes, MASN makes revenue per subscriber. That's just revenue. MASN has costs to pay before it can split any free cash with the two teams.

MASN pays out broadcast rights fees to the Nationals and Orioles. In addition there are other costs, like operating costs, before any profits are are available to either team. That's what I think you don't understand.

In 2008, MASN paid $26 million each to the Orioles and Nationals in broadcast rights fees. So a big part of MASN revenue goes out the door right away.

http://www.sportsbusinessdaily.com/article/124315

Comcast paid the Orioles broadcast rights fees before MASN was around, so the rights fees the Orioles receive is a bit higher, but not that much different than before MASN. If you think the Orioles and Nationals are sharing $78 million in free cash flow from MASN, then I think you are over estimating what MASN means to both teams. MASN helps both teams, but not nearly that much.

Agreed. Would you think the MASN boradcast rights fees included in the Orioles stated revenue by Forbes?

[nadecir]

Agreed. Would you think the MASN boradcast rights fees included in the Orioles stated revenue by Forbes?

Yes, I would think they would be included in every year that Forbes did their analysis.