2024 Forbes Report: O’s Had $99 mm in operating income in 2023

[LookinUp]

22 minutes ago, Philip said:

Please don’t sell naming rights.

I hate advertising on uniforms, But the worst is selling the right to Name the stadium: Enron field(oops) and so on.

God bless Fenway Park, which is just Fenway Park, and Yankee Stadium, which is Yankee stadium.

I hope they do sell naming rights, put logos on uniforms, etc. I want them to be as competitive as possible in revenue so they can better afford to keep more of our young talent.

I expect Rubenstein to be more willing to spend, but I don't expect that he wants to take a loss. 

[Satyr3206]

1 minute ago, WarehouseChatter said:

How high can the attendance go in ‘24? Can we get to 2.5M? Feels like that’s the big cutoff when I look at prior year attendance and those who draw well vs. the others.

I think 2.5 is feasible.

[Frobby]

7 minutes ago, Pickles said:

If we're consistently better than the Nats, and Rubenstein can use his DC contacts to entice business/corporations back to O's games, I think it's doable.

But it's basically a best case scenario, and will require a lot of things to go right- starting with on the field.

It would be interesting to see what would happen if the O’s had an Astros-like run of 7 years or so.   Even at the recent high water mark of 2014 (2.464 mm), the O’s didn’t draw as many fans as in 2005 (2.625 mm), the first year the Nats were in DC.   It seems logical that a constant contender could outdraw that 74-win team, despite everything that’s happened since then.  But it may take a few years.   

[Too Tall]

 I believe DR and group are going to really increase corporate interest/money toward the high expense parts of the stadium and/or sponsorship for others as Frobby envisioned. Not talking naming rights or patches either. Plus, I am so much more comfortable with DR a part of upgrades and development around the stadium. 

[Frobby]

4 minutes ago, Satyr3206 said:

I think 2.5 is feasible.

@Going Underground previously relayed that Birdland memberships had increased by 70% from last year.   Now, that doesn’t suggest a 70% increase in ticket sales, but it does suggest a substantial increase.   I think we’ll have a real good feel for it by the close of this homestand.  Last year they drew about 60 k for the first Sat./Sun. and then 32.5 k for the Mon.-Wed. games.  Those early weekday games are usually among the worst attended of the year, so we’ll get an early idea what the “floor” is.

[SemperFi]

24 minutes ago, beantownrefugee said:

Amazing.  The Orioles derive only 22% of their revenue from gate receipts.  Add in a bit for merch & concessions.  That still leaves the majority of the revenue from other sources, mostly media I assume.  So no one could show up to the games, and the team would still break even, assuming media revenues didn't decrease with in-person interest.  Very changed landscape in sports.  NFL is probably skewed even more towards media revenues.  WWE (a business which I follow closely) is very similar.  Back in the 1980s and before, revenue was derived from attendance.  Not anymore. It's perhaps on the order of 10-15%.

WIth each new CBA MLB seems to be shifting to a more centralized revenue system (NFL) and with cable cutting that should accelerate.  What was once a huge revenue advantage for large market teams could very quickly be much more evenly distributed similar to the NFL.  This would work much to the benefit of the Orioles as a ~mid market team.

The other thing to consider is that the Orioles should see a significant increase in revenue as most of the additional tickets will be more expensive seating and not discounted as in previous years-likely less promotions too.  It's also more profitable as other than adding upper deck supervision the infrastructure to support more fans is already in place.  

Corporate income is another revenue stream that should skyrocket-stadium and uniform signage alone should bring in another $20m per year (pure profit) not counting additional sponsorships and suites sold.  I have quite a bit of experience on both sides (sponsor and team) and think that Forbes estimates although the best we have to work with IMO are conservative.

[Philip]

Rubenstein talked a lot about giving back to the community. He didn’t go into any detail, which is understandable, but how that talk translates into action will have a lot to do with increased fan involvement.

he really does seem to want to lift the floor of the community in a meaningful way, and the resulting Goodwill will be huge. People will start following the Orioles just because of the humanitarian traits of the owner.

[Philip]

23 minutes ago, LookinUp said:

I hope they do sell naming rights, put logos on uniforms, etc. I want them to be as competitive as possible in revenue so they can better afford to keep more of our young talent.

I expect Rubenstein to be more willing to spend, but I don't expect that he wants to take a loss. 

Well, then, you and I are on opposite sides of the aisle, and that is OK.

He’s not at risk of the loss if he declines to sell naming rights, and I would be appalled to see uniforms turn into the kind of things we see on NASCAR drivers.

 

[ThomasTomasz]

1 hour ago, beantownrefugee said:

Amazing.  The Orioles derive only 22% of their revenue from gate receipts.  Add in a bit for merch & concessions.  That still leaves the majority of the revenue from other sources, mostly media I assume.  So no one could show up to the games, and the team would still break even, assuming media revenues didn't decrease with in-person interest.  Very changed landscape in sports.  NFL is probably skewed even more towards media revenues.  WWE (a business which I follow closely) is very similar.  Back in the 1980s and before, revenue was derived from attendance.  Not anymore. It's perhaps on the order of 10-15%.

I mean, you used to have three different WWF house show tours going on at one point in the 80s, especially during the territories era when it was hard to find stuff on TV.  Now, AEW can fill 1/4 of an arena and still run shows, and WWE just came to an agreement with Netflix on their next rights deal.  It’s all about what 

It is 110% on the broadcast rights generating a lot of income.  There is also the other market that isn’t gate fees and that is other licensing.  For WWE, that includes merchandise off-site as well as action figures.  For an MLB team, this is a lot of the off-site merchandise itself.  WWE is more so their online store.  Professional sports teams are grabbing it from regional in-store licensing sales as well.  

[dystopia]

55 minutes ago, Philip said:

Well, then, you and I are on opposite sides of the aisle, and that is OK.

He’s not at risk of the loss if he declines to sell naming rights, and I would be appalled to see uniforms turn into the kind of things we see on NASCAR drivers.

 

I'm with you, I don't want any of this stuff. There is a limit.

[PeregrineT]

Ive said this for a long time with the O's, the Angelos were making bank on the team.  MASN revenue is very large, In 2012-2016 it was $60m paid out to each team(after the lawsuit last year) so its much higher now. 

That means even BEFORE last season the Angelos' were pocketing over $120 million a year in profit.  As it is right now the new ownership can increase spending by $100m and still take home over $50m in profit. 

[btdart20]

$50m in net profit on a $1.725B investment is a 2.898% dividend.  Other than altruistic motives, i have to think the hurdle rate is higher than that for a savvy investor.  A 12 month T bill is around 5% currently.

[Billy F-Face3]

The downside with higher demand is tickets are going to cost a whole lot more for fans.

[LookinUp]

1 hour ago, SemperFi said:

WIth each new CBA MLB seems to be shifting to a more centralized revenue system (NFL) and with cable cutting that should accelerate. 

This would be great news.

1 hour ago, Philip said:

Well, then, you and I are on opposite sides of the aisle, and that is OK.

He’s not at risk of the loss if he declines to sell naming rights, and I would be appalled to see uniforms turn into the kind of things we see on NASCAR drivers.

 

Probably not, but I think it's very easy to see it costing $250-300 million to keep this team together, with the ramp up to that starting in a few years.

The Braves payroll this year is $225. The Yankees is $300. If we actually try to keep this core together, and they actually perform, it'll be really expensive.

[Can_of_corn]

19 minutes ago, btdart20 said:

$50m in net profit on a $1.725B investment is a 2.898% dividend.  Other than altruistic motives, i have to think the hurdle rate is higher than that for a savvy investor.  A 12 month T bill is around 5% currently.

He has already stated that the majority of profit from owning a ML club is realized when the club is sold.