Jump to content

Forbes: The Business of Baseball, and how the Nationals are making a killing!


Migrant Redbird

Recommended Posts

I'm sure that this information has been posted here before, but perhaps not in this combination? It was inspired by Detroit Louie's comments in the La Russa "fans make me want to vomit" thread at St. Louis Sports Forum. He was responding to suggestions that the Nats might dump Dunn's contract for a low level prospect to free up money to sign Strasburg.

Hey, [the Nats are] my #2. But talk about lousy ownership. Worst team in baseball and they've cleared about $40 mil a year the last two years.

The Forbes data implies that making their team better might not be the Nats owners' highest priority.

Forbes: The Business of Baseball

Team Rankings by Operating Income and by Value:

 Rank   Rank               Current 1-Yr Value Debt             Operating by     by    Team         Value   Change   /Value  Revenues   Income Income Value               ($mil)    (%)      (%)     ($mil)   ($mil)  1     30   Marlins        277       8       32       139      43.7  2     14   Nationals      406     -12       62       184      42.6  3      5   Cubs           700       9        0       239      29.7  4     26   Rays           320      10       19       160      29.4  5     17   Orioles        400       0       38       174      27.2  6     22   Twins          356       9       28       158      26.8  7     27   Athletics      319      -1       28       160      26.2  8      3   Red Sox        833       2       29       269      25.7  9     20   Rockies        373       1       21       178      24.5 10      2   Mets           912      11       76       261      23.5 11     16   Padres         401       4       60       174      22.9 12      9   Giants         471      -5       28       196      22.4 13     18   Indians        399      -4       25       181      19.5 14     15   Rangers        405      -2       66       176      17.4 15     12   Astros         445      -4       12       194      17.0 16     25   Reds           342       2       12       171      17.0 17      4   Dodgers        722       4       58       241      16.5 18      7   Phillies       496       3       35       216      16.3 19     29   Pirates        288      -1       35       144      15.9 20     10   White Sox      450       2        9       196      13.8 21     24   Brewers        347       5       35       173      11.8 22      6   Angels         509       2        7       212      10.3 23     28   Royals         314       4       13       143       9.0 24      8   Cardinals      486       0       50       195       6.6 25     11   Braves         446     -10        0       186       4.7 26     19   Diamondbacks   390       3       51       177       3.9 27     13   Mariners       426      -9       23       189       3.8 28     23   Blue Jays      353       0        0       172       3.0 29      1   Yankees      1,500      15       95       375      -3.7 30     21   Tigers         371      -9       57       186     -26.3

Forbes: Baseball And The Beltway: A Bad Marriage

The skeptics were right. The struggles of the Nationals and Orioles show there isn't room for two teams in the Washington area.

Less than an hour before game time, Boog Powell, the former Baltimore Orioles slugger turned stadium restaurateur, stands in his usual spot, greeting fans lined up for his sizzling pork and beef dishes at Boog's Barbeque Pit, along the concourse beyond the right-centerfield wall at Oriole Park at Camden Yards. Powell couldn't help but lament how much shorter his lines are these days. Or how his dinner pals from D.C. are never around anymore.

"I had guys that came up on the train from Washington, have dinner with me and go back. Then I'd see them again the next night," he said before the Orioles' June 18 match-up with the New York Mets. Are the Washington Nationals, born in 2005 out the ashes of the Montreal Expos, to blame? "I don't think there's any doubt," he said.

.... Powell isn't alone in thinking the league made a big mistake in matching baseball with the capitol,...

... Despite sharing a market that's 8.3 million strong, the Nationals and Orioles rank 26th and 27th, respectively, of baseball's 30 teams in attendance this year, each drawing around 21,000 per game. Combined, that's only 6,600 more than the Orioles drew by themselves in 2004, the year before the Nats came to town. Their combined attendance could easily fit in one or the other park--not a happy thought for the taxpayers who footed most of the bill for the $693 million, state-of-the-art Nationals Park.

... The [MASN] agreement puts both teams in MLB's top 10 in cable revenue for now. That, along with low payrolls (both rank in the bottom eight in the big leagues), have them in the black. How long that lasts is another question: The cable-rights fees are effectively transfer payments that the clubs pay themselves from the MASN books to their own. Future payment streams figure to be tied in part to the success of area college sports, which MASN also broadcasts.

... "People said it could cannibalize the Orioles, and it came true," said industry consultant Marc Ganis, of Sports Corp. Ltd., of MLB's decision to bypass Charlotte, Las Vegas and nearby Northern Virginia. The big mistake, he said, was not capitalizing on the fact that Northern Virginia is far enough away from the District of Columbia to eliminate a lot of fan territory overlap--which both clubs estimate at 25%--but close enough to maintain the joint cable venture.

So why did MLB go to Washington, where Forbes currently values the Werner's $450 million investment at $406 million? Officials didn't return calls for comment. But Ganis' thoughts echo those of many others. Labor strife, cable fights and steroids mean lots of congressional hearings. "Baseball decided it needed a beachhead in Washington," Ganis said. So, call the Nationals a cost of doing business.

... the Orioles boast MLB's ninth-lowest prices, averaging $23.42 per ticket and $5 a beer. And as for a corporate naming-rights partner, forget it. The fans don't like crass commercialism, Angelos believes, so the ballpark isn't for sale.

"We will leave dollars on the table to allow fans to experience baseball," [club spokesman Greg] Bader said. Not that too many are taking advantage. For all its glorious history on the field, including a run of six American League pennants and three World Championships between 1966 and 1983, Baltimore has always been an iffy baseball town at best. The 1970 championship team featuring Powell, along with Hall of Famers Frank Robinson, Brooks Robinson and Jim Palmer, ranked 15th of 26 teams in attendance. The 1983 champs, led by local legend Cal Ripen Jr., ranked only 10th. The most obvious factor in the incremental improvement? The Washington Senators had left for Texas in 1972.

Baltimore's lone sweet spot at the gate came during the 1996 and '97 seasons, when the team was in the playoffs and Camden Yards, opened in 1992, was still fairly new. The O's drew over 3 million people in both seasons, second-best in baseball. But it's been downhill since. And given the new competition down the highway, things are tougher than ever.

There are rumors all over the place that the Cardinals are close to a deal with the A's for Matt Holliday. I hope not! I don't believe the Cardinals can afford to extend Holliday, along with a fairly expensive pitching staff, and still be able to sign Pujols to a lifetime extension. I'd much rather give up a B level prospect and get Adam Dunn for a year and a third than to give up Brett Wallace and possibly other useful prospects for a 2 month rental of Holliday. Now, Roy Halladay would be a different story entirely. I'd give up the Cards #1 draft picks in 2007 and 2008 plus other useful pieces for Halladay.

Link to comment
Share on other sites

If Baltimore and DC couldn't support 2 teams, then how come the Orioles were mostly horrible from 1985 - 2004 when the Nationals were still in Montreal?

2 teams can survive in the Baltimore/DC market just like 2 teams can survive in NY, CHI, LA, and SF/OAK. It's just going to take smart ownership on both sides.

Link to comment
Share on other sites

If Baltimore and DC couldn't support 2 teams, then how come the Orioles were mostly horrible from 1985 - 2004 when the Nationals were still in Montreal?

2 teams can survive in the Baltimore/DC market just like 2 teams can survive in NY, CHI, LA, and SF/OAK. It's just going to take smart ownership on both sides.

Do you mean "mostly horrible" on the field or "mostly horrible" at the gate? If you mean the former, I don't see the connection between performance and whether a team can be supported. The "Swingin' A's" and the Orioles the 1970s are a testament to that.

Attendance-wise (I don't have other revenue figures at my fingertips), the Orioles were quite healthy from 1985-2004. They were almost always in the upper portion of attendance. The low was 1.66M in 1988 when they lost 107.

I'm of the opinion that the Orioles attendance is bad because the product has been bad. Where the Nats make a difference is that I'm not sure that the attendance will recover greatly even if the team contends; the available market is now that much smaller.

The TV revenue would improve, though.

Link to comment
Share on other sites

Do you mean "mostly horrible" on the field or "mostly horrible" at the gate? If you mean the former, I don't see the connection between performance and whether a team can be supported. The "Swingin' A's" and the Orioles the 1970s are a testament to that.

Attendance-wise (I don't have other revenue figures at my fingertips), the Orioles were quite healthy from 1985-2004. They were almost always in the upper portion of attendance. The low was 1.66M in 1988 when they lost 107.

I'm of the opinion that the Orioles attendance is bad because the product has been bad. Where the Nats make a difference is that I'm not sure that the attendance will recover greatly even if the team contends; the available market is now that much smaller.

The TV revenue would improve, though.

I meant on the field. Attendance was already on a sharp decline before the Nats arrived in DC...because of the losing.

If the O's start winning, OPACY will be packed on most nights. There is no doubt in my mind about that.

Link to comment
Share on other sites

I meant on the field. Attendance was already on a sharp decline before the Nats arrived in DC...because of the losing.

If the O's start winning, OPACY will be packed on most nights. There is no doubt in my mind about that.

Exactly. All the Nats' and O's attendance figures prove is that bad teams don't draw well. Duh.

In 1992 the Mets finished 8th in the league in attendance, the Yanks 11th. Guess that proved that the NY area doesn't have the resources to support two competitive teams at the same time.

Link to comment
Share on other sites

I was in Bowie last night for the Baysox-Reading Phillies game...along with about 75 other people. Another franchise the Nats have sucked the life out of?

There'd be nothing wrong with having baseball in both Baltimore and Washington if you take the following actions:

Take 10,000 seats out of each ballpark

Eliminate interleague play

Eliminate the unbalanced schedule

Share local revenues in the same way "new revenues" (mlb.com, &c) are shared

Link to comment
Share on other sites

Exactly. All the Nats' and O's attendance figures prove is that bad teams don't draw well. Duh.

In 1992 the Mets finished 8th in the league in attendance, the Yanks 11th. Guess that proved that the NY area doesn't have the resources to support two competitive teams at the same time.

Yep. I don't see many empty seats at Ravens and Redskins games.

Link to comment
Share on other sites

Yep. I don't see many empty seats at Ravens and Redskins games.

Drungo's point was that "bad" [baseball] teams don't draw well. It was my impression that Redskins games are sellouts no matter how bad the team has been playing. I haven't paid attention to Ravens games, but I wasn't aware that they were playing in front of empty seats in the down seasons either.

There are 10 times as many home baseball games as home NFL games, and football fans make each game much more of a party event than baseball fans do. I guess they still care if they've got a lousy team, but the alcohol tends to numb that.

Link to comment
Share on other sites

Archived

This topic is now archived and is closed to further replies.

×
×
  • Create New...