The O's ARE a small market team -- but so what?

[Frobby]

53 minutes ago, EddeeEddee said:

I agree.  Baltimore is only 40-45 miles from DC, much closer than Milwaukee is to Chicago or San Diego is to LA. 

In fact, Baltimore and DC are frequently considered one metro area, known as a combined statistical area. 

https://en.wikipedia.org/wiki/Washington–Baltimore_combined_statistical_area

Combined it is the 3rd largest metro area in the US, behind only the NY and LA areas and just ahead of Chicago and the Bay Area.  Areas this big can easily support two MLB teams.

On top of that the Orioles were the only MLB team in the area for over 4 decades, drawing fans all the way down into DC, Virginia and North Carolina.  I'm sure the O's still draw tens of thousands -- if not more -- fans from Montgomery and PG Counties on down.  No wonder MASN would serve more or less the same demographic for both teams.  

It’s a mixed bag.  Not quite one market, not quite two.  But here’s what we know: for purposes of choosing teams that get extra draft picks and international spending allocations, Baltimore gets them and Washington does not.  They’re not doing that because the other 29 teams love the Orioles and are looking for ways to lavish extra benefits on them.  

[EddeeEddee]

49 minutes ago, Frobby said:

It’s a mixed bag.  Not quite one market, not quite two.  But here’s what we know: for purposes of choosing teams that get extra draft picks and international spending allocations, Baltimore gets them and Washington does not.  They’re not doing that because the other 29 teams love the Orioles and are looking for ways to lavish extra benefits on them.  

Right, so all the more reason John Angelos has to play the poor man game. 

I agree with you it's not quite one market, but I grew up a Redskins fan and an Orioles fan as did many of my friends and family.  It felt like one market to me because before the era of cable our TV easily picked up all the TV stations from both Baltimore and DC.  We got the Sun and the Post.  My dad worked in both cities.  But I grew up in Howard County, between the two cities, not in a place further north like Towson or down south like the Virginia suburbs.  Still, I'm sure many people on these boards still know many O's fans in the DC and Nova suburbs -- and some of them young. 

Among the teams that play close to or within the same market as bigger name teams, I think the O's less resemble the Mets, Angels and White Sox and more resemble the A's.  Both the O's and A's have a workingman fan base, a proud winning history from decades past (and not so much winning in recent years), a small to mid market team playing within an hour's drive of a bigger market team -- and neither were expansion teams, both arrived from elsewhere. 

Except there are two key differences that favor the O's by comparison. 

1) The Orioles have a great ballpark and the A's have one of the worst ballparks.  If the A's had a Camden Yards or an Oracle Park nobody would be thinking of moving them.  

2) The Giants moved to the Bay Area before the A's did.  The Nationals do not have a corresponding history in the DC area that goes back decades.  In fact, the Nationals feel more like an expansion team because they didn't keep the Expos name and arrived in DC well into the expansion era.

 

 

[Chavez Ravine]

The business of all MLB teams, regardless of market, is a varied combination of two things.

1. A vanity project where rich owners get to swag around at power lunches with politicians, turn down invites to be on sports talk radio, and hang with Magic Johnson.....all things they couldn’t do as simple tort lawyers, shipping magnates, or pork belly brokers.

2. A vulture capital hedge fund where the play is to shift all the risk and distress of the business on to others—cities, 14 year old Dominican kids, hungry fans—while peeling off the valuable bits for themselves—the associated real estate, media rights, and the collective value of the idea of MLB.

So whether a team is making money or not is often neither here nor there.

[brucewayne]

Meh. I'd rather acquire mid-career Gerrit Cole than be awarded a comp pic.

[Sports Guy]

I have talked about this many times but I think we overrate these contract extensions. We have these guys for the first  6 or 7 years of their careers. For most players, you don’t really want them beyond that.

We have a few guys where getting a couple more seasons would be great but it’s a big gamble to sign them for 8-9 years when really are you are getting is 2-3 extra years.

Although, the counter to that is that you aren’t trading them earlier if you have them signed, so maybe you get 3-4 extra years.

Anyway, I can see the logic in saying, I don’t see these deals being worth it and I’m not getting into Tatis type deals.

But that’s not what JA said. He didn’t talk about the baseball part of these deals. He is acting like the team can’t do it unless they raise prices.

First  of all, raise prices then, who cares. People will pay if you are winning. Secondly, they are going to raise prices anyway because the team is going to be winning.

Lastly, and most importantly, he is just lying. None of that needs to happen.  He can acknowledge the money MASN is making as part of the revenue. He can’t stop pretending the numbers Frobby showed here don’t exist.

He is just a liar. There is nothing more to it than that. His message is lie. The way he does is slimey. 
 

He wants Battery Park but fails to mention a big chunk of they was privately funded. John, why aren’t you privately funding this? Oh wait that’s right, you have no GD money because you are an awful businessman who obviously can’t convince people of your plan, so you have to hold the team, the city and it’s fans hostage because you want more wealth and power.

You want more revenue? Sell the naming rights to the stadium. Pull an Astros and wear a logo of a biz on your jerseys. Whatever. There are tons of revenue streams out there for you to make extra money as a “small market team”. You just have to have people working around you who have a clue as to how to do it and I question if the Os have that.

[Roll Tide]

12 hours ago, Frobby said:

Notwithstanding John Angelos’ “poor mouth” crying and terrible communication skills, let’s be clear about one thing: the Orioles ARE a small market team.  The question is, what does that say about how the Orioles can and should build their team?

Let’s begin here: MLB awards extra draft picks and international slot allocations to (1) the ten smallest markets as measured by their calculated Revenue Sharing Market Score (“RSMS”), as set forth in the CBA, and (2) the ten teams with the smallest gross revenue.   There is an overlap of these two lists, but they are not identical.   Therefore, in 2023, 14 teams received extra picks and allocations, and this included the Orioles.   The O’s market ranked 23^rd on the RSMS.  The alternate calculation using revenue is not public, but per Forbes, the Orioles also ranked either 22^nd or 23^rd in revenue among the 30 teams.  (I’m not sure which only because the Forbes link that has the Pirates’ data has a glitch.)   So really, by the two measures that MLB itself uses, it’s correct to categorize the Orioles as a “small market” team. 

Of the 14 teams who received comp picks, I am going to eliminate two as outliers.  First, I don’t know why the Mariners are on this list.  They are not one of the 10 smallest markets on the RSMS (they are 16^th), and per Forbes, their revenues were about $70 mm more than any other team that got comp picks.  Second, I am eliminating Oakland, which per Forbes has revenues about $25 mm less than any other team (and $52 mm less than the Orioles).   So that leaves 11 teams that could be seen as small market peers of the Orioles.  I’m going to give a little data on each one, and review the long term contract commitments each team has (the contract figures below include already-past years of those contracts).  I’ll list the teams in order of gross revenue per Forbes (note that the O’s are at $264 mm, right in the middle of this pack).

Milwaukee Brewers, $294 mm in revenue, 30^th in market size per the RSMS.  The Brewers have $296 mm in multi-year contracts, mostly tied up in Christian Yelich ($215 mm).  Their 2023 opening day payroll was $118 mm, per BB-ref.  They lead the NL Central.

Colorado Rockies, $286 mm revenue, 21^st in market size.   The Rockies have $456 mm in long term contracts, headed by Kris Bryant ($182 mm) and Charlie Blackmon ($113 mm).  Their 2023 payroll is $149 mm.   They are in last place in the NL West.

Arizona Diamondbacks, $276 mm revenue, 18^th in market size.  The DBacks have $288 mm in long term contracts, headlined by Corbin Carroll, inked to an $111 mm contract midway through his rookie campaign.  The DBacks have a $116 mm payroll and are currently in 3^rd place in the NL West, 1 game out of the final NL wild card spot.

Cleveland Guardians, $268 mm in revenue, 25^th in market size.  The Guardians have $302 mm in long-term commitments, mostly to Jose Ramirez ($141 mm) and Andres Gimenez ($106 mm).  Their payroll is $87 mm and they are currently 2^nd in the AL Central, but well under .500 and not in the wild card race.

Minnesota Twins, $267 mm in revenue, 17^th in market size.  The Twins have $571 mm in long term contracts, headlined by Carlos Correa at $200 mm and Bryan Buxton at $100 mm.   They have a number of other sizable deals.  Their payroll is $138 mm and they are leading the weak AL Central, despite being only 5 games over .500.

Kansas City Royals, $260 mm in revenue, 28^th in market size.   The Royals have $99 mm in long term contracts, mostly comprised of an $82 mm deal with Salvador Perez.   The Royals have a payroll of $91 mm and are the second worst team in MLB this year.

Detroit Tigers, $260 mm in revenue, 20^th in market size.  The Tigers have $458 mm in long term contracts, mostly relating to  Miguel Cabrera ($240 mm) and Javier Baez ($140 mm).  The Tigers have a payroll of $119 mm and sit 3^rd in the AL Central, 10 games under .500.

Cincinnati Reds, $250 mm revenues, 29^th in market size.  The Reds have $278 mm in long term contracts, $225 mm of which is Joey Votto.  The Reds have a payroll of $89 mm and they are 3^rd in the AL Central, 1 game out of the last wild card spot.

Tampa Bay Rays, $248 mm in revenues, 19^th in market size.  The Rays have $370 mm in long terms contracts, almost half of which relates to Wander Franco ($182 mm) – we’ll see what happens with that.   The Rays have a $76 mm payroll and they are 2^nd in the AL East, currently in the top wild card spot.

Miami Marlins, $238 mm in revenues, 22^nd in market size.  The Marlins have $155 mm in long term contracts, nothing larger than the $55 mm deal with Sandy Alcantara.  Their payroll is $98 mm and they are 3^rd in the NL East,  1 game out of the final wild card spot.

Pittsburgh Pirates, unknown revenues, 27^th in market size.  The Pirates have $176 mm in long terms deals, all relating to Bryan Reynolds ($106 mm) and Ke’Brian Hayes ($70 mm).   The Pirates have a payroll of $72 mm and are in 4^th place in the NL Central, but 14 games under .500. 

Before leaving this list, I should mention that there are two teams in the bottom 10 of the RSMS who did not qualify for draft picks or international pool money, and I did not include them as peer teams.  They are the Cardinals ($358 mm in revenue, 26^th in market size) and the Padres ($324 mm in revenue, 24^th in market size).   I think the revenue disparities are too great to consider them peer teams, and the Padres per Forbes are operating at an enormous operating loss.  

So what are we to make of this?   First of all, we see that most of our peer teams can and do spend more on payroll than the Orioles, with the range being $72 - $149 mm and the median at $98 mm.  Per Forbes, the three teams at the top are showing operating losses, so I’m thinking that $115 - $120 mm is a realistic amount to spend.   Anything more would be dependent on increased revenue, which to be clear, should be coming as attendance increases and playoff revenues come in.

Second, our peer teams can and do enter into long term contracts, though they don’t always work out as planned.  None of these teams has ever forked over more than $240 mm, and only 4 have exceeded $200 mm on a deal (the Cabrera contract was a huge loser, the Yelich deal looks like it will be a significant loser, the Correa deal is off to a bad start, while the Votto deal turned out decently.)  In my view, the O’s can do some long term deals, but they have to be careful with them.   I favor the ones

 

for players who are far from free agency, but of course those require a willingness of the player to sign. 

Honestly, when I look at all this, John Angelos wasn’t completely wrong in what he said.  But, he took it too far and failed to acknowledge that the O’s do have significant room to increase payroll and do some long term deals over the next several years.   They just have more limits than the large market teams do.

The  Pirates revenue per a number of outlets is approximately $262 million.

Quote

The revenue of the Major League Baseball franchise Pittsburgh Pirates amounted to 262 million U.S. dollars in 2022. The Pittsburgh Pirates are owned by Robert Nutting, who bought the franchise for 92 million U.S. dollars in 1996.May 19, 2023

 

Pittsburgh Pirates revenue 2001-2022 - Statista

Statista

https://www.statista.com › ... › Professional Sports

 

[Moose Milligan]

lol Nutting 

[Tony-OH]

Great and informative post @Frobby. Maybe I missed it but could you put the Orioles #'s in the same way you did the other teams for easy comparison. How much money do the Orioles have tied up in multi-year contracts, etc (Lol, we know the answer but I think it would stand out if they placed along with the other teams). Just a thought.

Is it ok for us to put this on the front page?

[Frobby]

1 hour ago, Tony-OH said:

Great and informative post @Frobby. Maybe I missed it but could you put the Orioles #'s in the same way you did the other teams for easy comparison. How much money do the Orioles have tied up in multi-year contracts, etc (Lol, we know the answer but I think it would stand out if they placed along with the other teams). Just a thought.

Is it ok for us to put this on the front page?

Tony, I have edited the post and you are more than welcome to post it on the front page if you wish.  Should you ever want to do that for any post of mine, feel free.  

[Sports Guy]

The bottom line is that owning a team is a license to print money. Having the RSN makes it even easier.

There are countless avenues of revenue streams and whether your market is small or not, you can still afford large contracts and good size payrolls that allow you to contend year in and year out.

Now, some teams have to be smarter with their money than others and that means your margin for error is less but that’s ok. There is nothing wrong with that.

But that doesn’t mean you are poor, that anyone should feel sorry for you or that you are in danger of going bankrupt.

[sevastras]

Winning increases market share and revenue. There are only a finite amount of die hard fans like us. There are endless amounts of bandwagon fans or casual fans that come out the more you win. Baltimore is not a small market, the revenue is small at the moment and if they were to go to the WS say twice in three years you would see sold out games almost every night. When Camden yards first opened I was a kid but if my recollection is correct, almost every game was sold out. 

[Frobby]

1 minute ago, sevastras said:

Winning increases market share and revenue. There are only a finite amount of die hard fans like us. There are endless amounts of bandwagon fans or casual fans that come out the more you win. Baltimore is not a small market, the revenue is small at the moment and if they were to go to the WS say twice in three years you would see sold out games almost every night. When Camden yards first opened I was a kid but if my recollection is correct, almost every game was sold out. 

Washington didn’t have a team them.  I don’t think the O’s will ever sell out on a regular basis again.  But I agree with your point that winning drives attendance and revenue, to a degree.  The O’s will probably have $15 mm+ more revenue this year than last through the end of the regular season, and then hopefully some playoff revenue as well.  It seems reasonable to hope that the O’s could increase attendance by another 500 -750 k over the next several years if they put a consistent winner on the field that is expected to be a WS contender.  At least, I’m hoping to test that hypothesis.  

[brucewayne]

44 minutes ago, sevastras said:

Winning increases market share and revenue. There are only a finite amount of die hard fans like us. There are endless amounts of bandwagon fans or casual fans that come out the more you win. Baltimore is not a small market, the revenue is small at the moment and if they were to go to the WS say twice in three years you would see sold out games almost every night. When Camden yards first opened I was a kid but if my recollection is correct, almost every game was sold out. 

Baltimore is increasingly becoming a small market. The city and metro area isnt gaining much population. The GDP is stagnant. Our competitors such as DC, Virginia, Delaware, Pennsylvania are growing rapidly. What fortune 500 companies are prominent in Maryland? They are all going to Virginia for lower taxes and less regulations. All the wealthy retirees are moving to Delaware and Florida because of the much more competitive taxes. If it wasnt for our proximity to the national capitol and the prominence of Federal jobs we would be a failed state. 

[TradeAngelos]

17 hours ago, Frobby said:

Notwithstanding John Angelos’ “poor mouth” crying and terrible communication skills, let’s be clear about one thing: the Orioles ARE a small market team.  The question is, what does that say about how the Orioles can and should build their team?

Let’s begin here: MLB awards extra draft picks and international slot allocations to (1) the ten smallest markets as measured by their calculated Revenue Sharing Market Score (“RSMS”), as set forth in the CBA, and (2) the ten teams with the smallest gross revenue.   There is an overlap of these two lists, but they are not identical.   Therefore, in 2023, 14 teams received extra picks and allocations, and this included the Orioles.   The O’s market ranked 23^rd on the RSMS.  The alternate calculation using revenue is not public, but per Forbes, the Orioles also ranked either 22^nd or 23^rd in revenue among the 30 teams.  (I’m not sure which only because the Forbes link that has the Pirates’ data has a glitch.)   So really, by the two measures that MLB itself uses, it’s correct to categorize the Orioles as a “small market” team. 

Of the 14 teams who received comp picks, I am going to eliminate two as outliers.  First, I don’t know why the Mariners are on this list.  They are not one of the 10 smallest markets on the RSMS (they are 16^th), and per Forbes, their revenues were about $70 mm more than any other team that got comp picks.  Second, I am eliminating Oakland, which per Forbes has revenues about $25 mm less than any other team (and $52 mm less than the Orioles).   So that leaves 11 teams that could be seen as small market peers of the Orioles.  I’m going to give a little data on each one, and review the long term contract commitments each team has (the contract figures below include already-past years of those contracts).  I’ll list the teams in order of gross revenue per Forbes (note that the O’s are at $264 mm, right in the middle of this pack).

Milwaukee Brewers, $294 mm in revenue, 30^th in market size per the RSMS.  The Brewers have $296 mm in multi-year contracts, mostly tied up in Christian Yelich ($215 mm).  Their 2023 opening day payroll was $118 mm, per BB-ref.  They lead the NL Central.

Colorado Rockies, $286 mm revenue, 21^st in market size.   The Rockies have $456 mm in long term contracts, headed by Kris Bryant ($182 mm) and Charlie Blackmon ($113 mm).  Their 2023 payroll is $149 mm.   They are in last place in the NL West.

Arizona Diamondbacks, $276 mm revenue, 18^th in market size.  The DBacks have $288 mm in long term contracts, headlined by Corbin Carroll, inked to an $111 mm contract midway through his rookie campaign.  The DBacks have a $116 mm payroll and are currently in 3^rd place in the NL West, 1 game out of the final NL wild card spot.

Cleveland Guardians, $268 mm in revenue, 25^th in market size.  The Guardians have $302 mm in long-term commitments, mostly to Jose Ramirez ($141 mm) and Andres Gimenez ($106 mm).  Their payroll is $87 mm and they are currently 2^nd in the AL Central, but well under .500 and not in the wild card race.

Minnesota Twins, $267 mm in revenue, 17^th in market size.  The Twins have $571 mm in long term contracts, headlined by Carlos Correa at $200 mm and Bryan Buxton at $100 mm.   They have a number of other sizable deals.  Their payroll is $138 mm and they are leading the weak AL Central, despite being only 5 games over .500.

Baltimore Orioles, $264 mm in revenue, 23rd in market size.  The Orioles have $11 mm in multi-year contracts, including John Means (expiring this year) and their share of the James McCann contract.  Their payroll is $72 mm, and they have the best record in the AL, 30 games over .500.

Pittsburgh Pirates, $262 mm in revenue, 27^th in market size.  The Pirates have $176 mm in long terms deals, all relating to Bryan Reynolds ($106 mm) and Ke’Brian Hayes ($70 mm).   The Pirates have a payroll of $72 mm and are in 4^th place in the NL Central, but 14 games under .500. 

Kansas City Royals, $260 mm in revenue, 28^th in market size.   The Royals have $99 mm in long term contracts, mostly comprised of an $82 mm deal with Salvador Perez.   The Royals have a payroll of $91 mm and are the second worst team in MLB this year.

Detroit Tigers, $260 mm in revenue, 20^th in market size.  The Tigers have $458 mm in long term contracts, mostly relating to  Miguel Cabrera ($240 mm) and Javier Baez ($140 mm).  The Tigers have a payroll of $119 mm and sit 3^rd in the AL Central, 10 games under .500.

Cincinnati Reds, $250 mm revenues, 29^th in market size.  The Reds have $278 mm in long term contracts, $225 mm of which is Joey Votto.  The Reds have a payroll of $89 mm and they are 3^rd in the AL Central, 1 game out of the last wild card spot.

Tampa Bay Rays, $248 mm in revenues, 19^th in market size.  The Rays have $370 mm in long terms contracts, almost half of which relates to Wander Franco ($182 mm) – we’ll see what happens with that.   The Rays have a $76 mm payroll and they are 2^nd in the AL East, currently in the top wild card spot.

Miami Marlins, $238 mm in revenues, 22^nd in market size.  The Marlins have $155 mm in long term contracts, nothing larger than the $55 mm deal with Sandy Alcantara.  Their payroll is $98 mm and they are 3^rd in the NL East,  1 game out of the final wild card spot.

Before leaving this list, I should mention that there are two teams in the bottom 10 of the RSMS who did not qualify for draft picks or international pool money, and I did not include them as peer teams.  They are the Cardinals ($358 mm in revenue, 26^th in market size) and the Padres ($324 mm in revenue, 24^th in market size).   I think the revenue disparities are too great to consider them peer teams, and the Padres per Forbes are operating at an enormous operating loss.  

So what are we to make of this?   First of all, we see that most of our peer teams can and do spend more on payroll than the Orioles, with the range being $72 - $149 mm and the median at $98 mm.  Per Forbes, the three teams at the top are showing operating losses, so I’m thinking that $115 - $120 mm is a realistic amount to spend.   Anything more would be dependent on increased revenue, which to be clear, should be coming as attendance increases and playoff revenues come in.

Second, our peer teams can and do enter into long term contracts, though they don’t always work out as planned.  None of these teams has ever forked over more than $240 mm, and only 4 have exceeded $200 mm on a deal (the Cabrera contract was a huge loser, the Yelich deal looks like it will be a significant loser, the Correa deal is off to a bad start, while the Votto deal turned out decently.)  In my view, the O’s can do some long term deals, but they have to be careful with them.   I favor the ones for players who are far from free agency, but of course those require a willingness of the player to sign. 

Honestly, when I look at all this, John Angelos wasn’t completely wrong in what he said.  But, he took it too far and failed to acknowledge that the O’s do have significant room to increase payroll and do some long term deals over the next several years.   They just have more limits than the large market teams do.

Did you leave something out of this equation? Of course you did. 

You have really gone to the dark side.  

[Sports Guy]

9 minutes ago, TradeAngelos said:

Did you leave something out of this equation? Of course you did. 

You have really gone to the dark side.  

What did he leave out?