15 replies to this topic

[BSLChrisStoner]

MASN: Some O's payroll math
http://www.masnsport...ette-audio.html

[McNulty]

I'm starting to get really sick of hearing about the payroll limit. If you do simple math, the increase in ticket sales this year (roughly 350K over 2011) times the average price per person (family of 4 price has been calculated at link below of $176, so per person that's $44 per person, which jives with the average ticket price of $24). This works out to an extra $15 million in revenue simply from ticket and concession profits. Add in a 20% increase in ratings, and the Nats spending like THEY have the majority share in MASN, and you just can't buy them claiming to be out of cash.


http://www.bizjourna... ... dy-on.html

[BSLChrisStoner]

I'm starting to get really sick of hearing about the payroll limit. If you do simple math, the increase in ticket sales this year (roughly 350K over 2011) times the average price per person (family of 4 price has been calculated at link below of $176, so per person that's $44 per person, which jives with the average ticket price of $24). This works out to an extra $15 million in revenue simply from ticket and concession profits. Add in a 20% increase in ratings, and the Nats spending like THEY have the majority share in MASN, and you just can't buy them claiming to be out of cash.


http://www.bizjourna... ... dy-on.html

I think you raise some reasonable points.

Showalter is saying the payroll will be between $90-$100M. I'll assume their desired budget is $95M. While I'd like to think they could get to the $110-$115M range, I have no problem overall if they decide $95M is their limit for '13.

That would be a jump over 2012, and put them in the middle-half (or maybe the bottom of the upper 1/3).

I do think with the National TV revenue kicking in for '14, that $110-$115M should be expected at that point.

I don't really care about team salary though. If they wanted to set the budget at $65M and pocket all of the extra profits, that is fine by me. Tampa Bay has shown you can compete annually, with strong scouting and player development, and minimal salary. You just have to adjust as a Front Office, and it causes you to operate differently (with less room for error than your peers).

[JTrea81]

This is one reason Peter Angelos wants to keep MASN IMO, because he can continue to hide the revenue it is bringing in that isn't being spent on the team.

Were he to sell to Fox, the Orioles would get a huge boost in revenue based on the other deals that have been signed with other teams, plenty to afford a 100+ million dollar payroll and that deal would be very public on what the Orioles would be getting.

Let's not forget also all teams are going to receive about $20-25 million more in TV revenue as was stated.

So where is all that money going? I think we all know the answer.

[Mackus]

I don't think there should be any doubt that the Orioles can sustain a payroll of over $100M, even without accounting for increased ticket sales and things like that. The MASN revenue is huge and the Orioles get a vast majority of it.

The fact that they are limiting payroll to the $90-100M range screams that Angelos is pocketing the MASN profits rather than re-investing it in the team. Even though we haven't seen the books and never will, I think anybody claiming that Angelos is spending the most he can on the Orioles is woefully naive. Winning never has and never will be Angelos' priority. He'd like to win, sure, but he'd rather ensure as large of a profit margin as possible (between the O's and MASN) and then try to win rather than pay for the best team and organization possible and then try to continue making a profit.

[Kevin Ebert]

I think the MASN money is a separate argument. Angelos owns the O's and MASN (87%) but treats them as separate businesses. He doesn't use MASN profits to cover payroll or make other expenditures on the ballclub. So let's forget about that for a minute. BUT, I don't think the O's should have to maintain the same payroll as 2012, around $84-85m.

The reasons the O's should be able to raise payroll is:
1.) Attendance increase from 2012, which I'm sure was $5-10m more than the budget.
2.) The money the club made in the playoffs ($6-7m)
3.) Projected increase in attendance for 2013 after playoff run in 2012. There should be more season ticket and suite sales.
4.) If the MASN dispute is decided, the Orioles will receive a minimum of $5m more in rights fees because that's what MASN has already offered. They may easily receive more than this.
5.) The TV deals kick in in 2014. There will be an additional $25m or so distributed to each club. Angelos may not have given the team authority to spend this money on multi-year deals on free agents though.

[Mackus]

I think the MASN money is a separate argument. Angelos owns the O's and MASN (87%) but treats them as separate businesses. He doesn't use MASN profits to cover payroll or make other expenditures on the ballclub. So let's forget about that for a minute. BUT, I don't think the O's should have to maintain the same payroll as 2012, around $84-85m.

The reasons the O's should be able to raise payroll is:
1.) Attendance increase from 2012, which I'm sure was $5-10m more than the budget.
2.) The money the club made in the playoffs ($6-7m)
3.) Projected increase in attendance for 2013 after playoff run in 2012. There should be more season ticket and suite sales.
4.) If the MASN dispute is decided, the Orioles will receive a minimum of $5m more in rights fees because that's what MASN has already offered. They may easily receive more than this.
5.) The TV deals kick in in 2014. There will be an additional $25m or so distributed to each club. Angelos may not have given the team authority to spend this money on multi-year deals on free agents though.

Right, the team can clearly afford to go beyond a $100M payroll, and that's without even considering the profits from MASN, which a portion of at least should be able to be used to better the Orioles.

It's a joke and, really, a crime against the city and O's fans, that Angelos continues to pocket all the profits. He's such a bad owner it defies description.

[BSLChrisStoner]

It's a joke and, really, a crime against the city and O's fans, that Angelos continues to pocket all the profits. He's such a bad owner it defies description.

I have zero problem with Angelos wanting to make as much of a profit as he wants. He is entitled to do so. The problem I would have, is if the O's say they are doing everything they can to win.

Ultimately though, any budget is fine. As long as the Baseball Operations Department definitively knows what that budget is, and are allowed to operate on their own within that budget.

[SportsGuy]

They obviously can go beyond 100M for all the reasons Kevin pointed out...as he said, MASN and the Orioles are 2 different businesses and PA treats them as such.

HOWEVER, the bigger issue isn't the budget as much as how the money is being spent. We have entirely too much money tied up into 3 WAR or worse players...that's the bigger problem.

One thing that should be brought up and can't be ignored is the money being spent in internationally, on scouting, etc...we have all wanted that for a while and that has been increased under DD.

[Mcgraw]

I have zero problem with Angelos wanting to make as much of a profit as he wants. He is entitled to do so. The problem I would have, is if the O's say they are doing everything they can to win.

Ultimately though, any budget is fine. As long as the Baseball Operations Department definitively knows what that budget is, and are allowed to operate on their own within that budget.

I have no problem with this as well. The problem I have is the club pays lip service to drafting and development, but I don't see where they do this particularly well. I know DD has only one draft under his belt, but Andy said the same things and all of the drafts during his tenure were poor. I'll give DD some additional time but I'm skeptical. I thought the last draft, outside of Gausman, was about as vanilla as it gets. Other clubs consistently find prospects in the middle and late rounds, which is something we have not done very well.

[SportsGuy]

I have no problem with this as well. The problem I have is the club pays lip service to drafting and development, but I don't see where they do this particularly well. I know DD has only one draft under his belt, but Andy said the same things and all of the drafts during his tenure were poor. I'll give DD some additional time but I'm skeptical. I thought the last draft, outside of Gausman, was about as vanilla as it gets. Other clubs consistently find prospects in the middle and late rounds, which is something we have not done very well.

Its very difficult to develop mediocre talent. It can be done but its harder.

This team has made a habit of not trading guys at peak value, not drafting higher ceiling guys and losing out on potential talent by signing questionable FAs that cost us picks and, of course, they don't play the compensation game at all either.

So, its very difficult for this team to get ahold of real talent right now..which is why its so important, IMO, to trade the JJs(especially Johnson) because of their salaries and their worth on the trade market. I think we would find that they carry more value on the trade than they provide to this team, especially given the replacements we have for them at their current positions.

[Mackus]

I think we would find that they carry more value on the trade than they provide to this team, especially given the replacements we have for them at their current positions.

Who replaces Hardy?

Machado moves to SS, yes, but who do we have as a potential replacement for 3B?

I'm not against trading him, but there really aren't any good 3B options available through FA or a quick trade that make a lot of sense that I've seen.

Johnson I'm more inclined to agree with, given the payroll limitations that Angelos is imposing. We should move him if we have the chance. Other teams may look at him as a bargain, at about $16M max over the next two seasons. That's pretty inexpensive given the contracts guys like Affeldt, League, and others have gotten this offseason.

[SportsGuy]

Who replaces Hardy?

Machado moves to SS, yes, but who do we have as a potential replacement for 3B?

I'm not against trading him, but there really aren't any good 3B options available through FA or a quick trade that make a lot of sense that I've seen.

Johnson I'm more inclined to agree with, given the payroll limitations that Angelos is imposing. We should move him if we have the chance. Other teams may look at him as a bargain, at about $16M max over the next two seasons. That's pretty inexpensive given the contracts guys like Affeldt, League, and others have gotten this offseason.

As I said in the Hamilton thread, i would sign Ryan Roberts.

He isn't great but he did have a 3.5 WAR in 2011. He plays an average or slightly above average defense at third(by UZR standards), has a decent walk rate and some pop in his bat. He could be a 2ish WAR guy, which would be fine if you make additional moves and pick up WAR elsewhere(the premise in that thread was needing to trade the JJs to justify the Hamilton salary..adding him increases the WAR obviously).

[mweb08]

I don't think there should be any doubt that the Orioles can sustain a payroll of over $100M, even without accounting for increased ticket sales and things like that. The MASN revenue is huge and the Orioles get a vast majority of it.

The fact that they are limiting payroll to the $90-100M range screams that Angelos is pocketing the MASN profits rather than re-investing it in the team. Even though we haven't seen the books and never will, I think anybody claiming that Angelos is spending the most he can on the Orioles is woefully naive. Winning never has and never will be Angelos' priority. He'd like to win, sure, but he'd rather ensure as large of a profit margin as possible (between the O's and MASN) and then try to win rather than pay for the best team and organization possible and then try to continue making a profit.

I think PA did make a good effort in terms of spending at least early in his ownership, but I agree with everything else you say.

[Mackus]

I think PA did make a good effort in terms of spending at least early in his ownership, but I agree with everything else you say.

Yeah, back before the salaries really exploded he definitely committed a good deal and had the O's payroll competitive with the highest in the game (the Orioles are still the last team to lead the league in payroll besides the Yankees).

Since the late 90s, though, it's been a joke. And now it's to the point, with all the other revenue streams, that it can't be explained away just as market limitations. Angelos is deliberately keeping the payroll low so he can just pocket the additional money coming in. I have no doubts that the payroll could be much higher and the team still remain in the black. I don't think he should be under any obligation to lose money on the team, but I do think he should be under scrutiny to put most of the revenue into the team rather than keeping the profits for himself. Pro teams should be ran more like institutions with caretakers, IMO, rather than businesses with the primary goal to benefit their ownership.

[mweb08]

I have zero problem with Angelos wanting to make as much of a profit as he wants. He is entitled to do so. The problem I would have, is if the O's say they are doing everything they can to win.

Ultimately though, any budget is fine. As long as the Baseball Operations Department definitively knows what that budget is, and are allowed to operate on their own within that budget.

I have a big problem with it.

The motive for owning a sports team should not be to make a ton of money. I don't expect owners to lose money, but these are guys that are very wealthy, have other ways of making lots of money, so they should be running a team for their own enjoyment and for the enjoyment of the community and of all the fans. Owning a sports team is basically a hobby for someone of great wealth and they should treat it as such. If someone who has a hundred plus million dollars wants to find a way to make even more money, there should be plenty of other options for them. In addition, just the amount of appreciation of the worth of the franchise should more than enough to satisfy a person owning a team.