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

[btdart20]

9 minutes ago, Can_of_corn said:

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

Right. Sports teams are typically like art.  Especially in bad markets.  Preserving and appreciating in value.

I was just giving context to the $50m.  It means little without the denominator.  For the bulk of us, it's an insane number.  The $1.725b is beyond the pale.

 

[Bemorewins]

2 hours ago, Pickles said:

That's all well and good, and admirable, but what's far more important is winning the fans over from the DC suburbs who have disposable income.

Both are extremely important in their own right to grow the fanbase. He mentioned the lack of diversity of the game and in the stands (I believe in the first interview that he gave after taking over the franchise. I believe it was with Ryan and Cal Ripken).

We need people from the burbs with the funds to spend (in particular on season tix). But we also need fans from inside the city (especially young fans) to grow the game in their communities.

[Satyr3206]

I was going to ask yesterday but got pre occupied. Are the Jr Orioles still in existence? Great way to get the kids involved.

[Frobby]

1 hour ago, Can_of_corn said:

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

This has never really made sense to me.  The sales value of company normally is related directly to how much annual profit it throws off.   Otherwise, the whole thing is just a speculative bubble.  

[DrungoHazewood]

3 hours 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%.

In the 1930s teams fought putting games on the radio, because if you can listen to the game for free why would you ever come to the games and buy tickets?

In the 1950s and even later teams fought putting games on TV, because if you can watch the Orioles on a 8" black and white set in your living room, why would anyone ever come to the games and buy tickets?

In 1960 the Orioles' total revenues were probably on the order of $5-10M, with a lot of that gameday revenues. An average ticket was probably $2-3, and they drew 1.1M fans. After inflation that's probably $50-100M. But with modern media and other sources of income their revenues are 3-6 times that.

Kind of makes you want to go back in time and whisper in the GM's and owner's ears to get ahead of this media thing instead of being scared of it.

Edited March 29 by DrungoHazewood

[DrungoHazewood]

1 hour ago, Can_of_corn said:

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

Did the Angelos family do better with the Orioles than they would have if they'd just taken their money and put it in an indexed stock fund? $173M invested in that kind of fund in 1993 and left alone would be worth about $2.6B today.

I think much of the "profit" from owning a MLB club is Rubenstein's experience yesterday where he's the hero of the city for buying the team and giving them hope. Which I guess didn't work out so well for the Angeloses, so for them it's probably more about the cash money.

[btdart20]

6 minutes ago, DrungoHazewood said:

Did the Angelos family do better with the Orioles than they would have if they'd just taken their money and put it in an indexed stock fund? $173M invested in that kind of fund in 1993 and left alone would be worth about $2.6B today.

I think much of the "profit" from owning a MLB club is Rubenstein's experience yesterday where he's the hero of the city for buying the team and giving them hope. Which I guess didn't work out so well for the Angeloses, so for them it's probably more about the cash money.

Plus annual dividends (annual net profits).  $Xm times 30 years (or however much the family earned).  And compound that...  Very likely it's a billion or two there too.  

[Jagwar]

I'm guessing that's why John Angelos wasn't really interested in opening the O's books to the media/public/fans

[24fps]

38 minutes ago, DrungoHazewood said:

In the 1930s teams fought putting games on the radio, because if you can listen to the game for free why would you ever come to the games and buy tickets?

In the 1950s and even later teams fought putting games on TV, because if you can watch the Orioles on a 8" black and white set in your living room, why would anyone ever come to the games and buy tickets?

In 1960 the Orioles' total revenues were probably on the order of $5-10M, with a lot of that gameday revenues. An average ticket was probably $2-3, and they drew 1.1M fans. After inflation that's probably $50-100M. But with modern media and other sources of income their revenues are 3-6 times that.

Kind of makes you want to go back in time and whisper in the GM's and owner's ears to get ahead of this media thing instead of being scared of it.

$2.50-$3.00 for field level box seats in the early 1960’s.

[EddeeEddee]

2 hours ago, Frobby said:

This has never really made sense to me.  The sales value of company normally is related directly to how much annual profit it throws off.   Otherwise, the whole thing is just a speculative bubble.  

It depends.  Look at the insane valuations of startups that may never make a profit.  Then there are the depressed stock prices for companies that are profitable but are considered low growth or mature -- in other words companies that have been around for a long time and are unlikely to grow much or at all.  Speculative future performance is part of the valuation for companies in major industries.  But sport franchises, at least these days, are playthings for the very wealthy -- not really run like real businesses.  This is probably partly why owners are always looking for welfare in the form of government funding to build stadiums.

[Ven6]

5 hours ago, Frobby said:

This has never really made sense to me.  The sales value of company normally is related directly to how much annual profit it throws off.   Otherwise, the whole thing is just a speculative bubble.  

Except sports teams. They aren’t regular companies. There are only 30 teams. 30 chances to be an owner. There will always be an intrinsic value added to whatever profit it throws off. 

[Billy F-Face3]

When I took an economics class in college, they used sports franchises as an example of legal monopolies. Simply because it's the only team of that sport within that market. (Usually. New York, LA, and Chicago seem to disagree with that idea.)

The bottom line is that there aren't many of them to compete in the same market.

[Roll Tide]

17 hours ago, Frobby said:

From Forbes:

REVENUE $328M ($264 mm in 2022)

OPERATING INCOME $99M ($67 mm)

PLAYER EXPENSES $101M ($83 mm)

GATE RECEIPTS $71M ($45 mm)

“Revenue and operating income (earnings before interest, taxes, depreciation and amortization) are for the 2023 season and are net of revenue sharing, competitive balance taxes and stadium revenue used for debt service. Ownership stakes in regional sports networks, as well as related profits or losses, are excluded from our valuations and operating results, as are investments in real estate and other businesses.”  (Source)

The key here is also “net of revenue sharing”. As long as we are still in the “small market” bucket the 60% shared piece means we have more than the listed numbers.

[Roll Tide]

14 hours ago, Can_of_corn said:

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

That philosophy depends on whether ownership siphons off the profits annually as we know the Angelos group has done during the rebuild or whether Dave’s group makes it available to the on field product. His statement adds another reason to be optimistic about the approach.

[ThisIsBirdland]