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cornball
11-29-2003, 07:24 AM
on your recent article. Most of us realize the revenues are there and that these owners are protected by MLB secret books.

It is too bad JR is not savy or smart enough to use the money to field a winner. Or in what would be a brillant move in making the team public ala the Green Bay Packers. Raising money with the fans having a stake in the team. I know it is more symbolic than anything but it could raise alot of money, create more loyalty to the team. Just an idea.

voodoochile
11-29-2003, 08:37 AM
Yeah and his numbers for the parking revenue were low by almost $7M because he missed a decimal place when he did the math... :D:

duke of dorwood
11-29-2003, 11:26 AM
The owner is NOT our friend, one lie after another.

soxtalker
11-29-2003, 11:32 AM
One question (or perhaps it is more a series of questions) that comes to mind is what the expenses are for the Sox. We see the players' salaries, but I wonder what other costs are involved. One that I'm particulary interested in is the cost of maintaining the minor-league system and how we compare with other teams.

RedPinStripes
11-29-2003, 12:11 PM
Daver still dont know ****. :redneck

Daver
11-29-2003, 01:23 PM
Originally posted by soxtalker
One question (or perhaps it is more a series of questions) that comes to mind is what the expenses are for the Sox. We see the players' salaries, but I wonder what other costs are involved. One that I'm particulary interested in is the cost of maintaining the minor-league system and how we compare with other teams.

What cost? Minor league teams pay for themselves,that's why they are allowed to change affiliations.The MLB club is responsible for bonuses paid to draft picks,their salaries are payed by the minor league teams.

soxtalker
11-29-2003, 02:20 PM
Originally posted by Daver
What cost? Minor league teams pay for themselves,that's why they are allowed to change affiliations.The MLB club is responsible for bonuses paid to draft picks,their salaries are payed by the minor league teams.

If the Sox don't pay the salaries, do they have any control -- other than initial draft choices and choice of minor league teams -- over player development in the minors?

I am diverting here from the subject of the thread, but this is interesting. Several times I've asked how our minor league system compares with others, and I don't recall getting much of an answer. The reason for asking is that we seemed to have little payback for the supposedly well-stocked system we had in the late 90's. Much of that can be due to poor draft choices by Schueler, but I'm also wondering how much the Sox invest in a player's development after the players are drafted.

TornLabrum
11-29-2003, 03:16 PM
Originally posted by Daver
What cost? Minor league teams pay for themselves,that's why they are allowed to change affiliations.The MLB club is responsible for bonuses paid to draft picks,their salaries are payed by the minor league teams.

The teams pay the salaries of the players. The minor league teams pay for the uniforms, travel, etc.

CLR01
11-29-2003, 04:16 PM
Originally posted by soxtalker
One question (or perhaps it is more a series of questions) that comes to mind is what the expenses are for the Sox. We see the players' salaries, but I wonder what other costs are involved. One that I'm particulary interested in is the cost of maintaining the minor-league system and how we compare with other teams.


Yeah nobody ever seems to include various expenses the team has to pay. What about the cost of operating the park (gas, water, electric, both 81 home games a year and everyday, year round, operations)? Then you have the coaching staff, grounds crew, trainers, medical staff (if they have one i assume they do), front office people, ushers, ticket reps, and anyone else that works for the sox, stadium maintenance, travel and lodging for 30-35 road series, and anything else i am forgetting.

Two problems with the article, I donít believe 50% of the people that go to see the sox drive their own car. My guess is closer to 35% on any given night drive themselves.

And when was the last time 100 diamond suits were sold?

Daver
11-29-2003, 04:29 PM
Originally posted by CLR01


Two problems with the article, I donít believe 50% of the people that go to see the sox drive their own car. My guess is closer to 35% on any given night drive themselves.

That is why I chose to speculate a percentage as low as 50%,to compensate the speculation for the actual number of cars. And that is also why I clearly stated that I was speculating,I based none of it on hard facts.

And when was the last time 100 diamond suits were sold?

That is why I used a such a low number for the price of the suites,I know most of them go for over 50 grand a season.And again I was clearly speculating.

soxtalker
11-29-2003, 06:14 PM
Originally posted by CLR01
Yeah nobody ever seems to include various expenses the team has to pay. What about the cost of operating the park (gas, water, electric, both 81 home games a year and everyday, year round, operations)? Then you have the coaching staff, grounds crew, trainers, medical staff (if they have one i assume they do), front office people, ushers, ticket reps, and anyone else that works for the sox, stadium maintenance, travel and lodging for 30-35 road series, and anything else i am forgetting.

By raising the issue of the cost of the minor league system, I'm not trying to be critical of Daver's article. (I'm not sure yet whether I concur with his conclusions.) I much prefer to see some rough estimates like this than statements like "we should raise the salary budget", "JR is cheap", or the equivalent on the other side of the issue. While I understand that people feel strongly, I really appreciate it when someone has taken the time to make estimates. As I said earlier, I'm most interested in what they spend on player development and the farm system in general. We often compare the player salaries with those of other teams, but I don't recall seeing an equivalent on the minor league side of things.

Daver
11-29-2003, 06:26 PM
Originally posted by soxtalker
As I said earlier, I'm most interested in what they spend on player development and the farm system in general. We often compare the player salaries with those of other teams, but I don't recall seeing an equivalent on the minor league side of things.

You never will see this,it is a cost that is buried in the books,just like I couldn't speculate on broadcast revenue,I can't speculate on this either,because there is no information to base any speculation on.

A minor league system,and it's strengths and weaknesses depend entirely on how they are going to be used,the Yankees use theirs almost entirely to buy veteran talent,while the A's use theirs to develop players for their own ballclub.Right now the Sox are using theirs to do both,whether this trend continues hinges entirely on what decision they make for this team in this offseason.

My article was intended to take a look at the numbers that are available and make a speculation as to what the revenue from the ballpark brings in,and I think I was fair in my speculation,if not generous to the Sox.

cornball
11-30-2003, 03:17 PM
It shocks me how some will defend JR and his budget.

Daver was very conservative with his estimates, to show the budget should be more.

The utility bills at the park, give me a break. There are no excuses for this ownership except GREED.

For example, if I am not mistaken, I believe each player get approximately 200K for their share of merchandising. What do the clubs get.

sox3
11-30-2003, 06:15 PM
Originally posted by Daver
You never will see this,it is a cost that is buried in the books,just like I couldn't speculate on broadcast revenue,I can't speculate on this either,because there is no information to base any speculation on.

My article was intended to take a look at the numbers that are available and make a speculation as to what the revenue from the ballpark brings in,and I think I was fair in my speculation,if not generous to the Sox.

taken from Dave's article
There has been some discussion lately about the Sox payroll, and whether or not the organization is making any money from the teamÖ

Based on this the question that must be asked is this, what profit margin does Jerry Reinsdorf base his payroll on? If he is going to try and field a team with a sixty million dollar payroll he is putting a nice chunk of profit in his ownership consortiums pocket, unless the Sox have a broadcast deal that actually loses money. For some reason I don't think that is the case. For anyone that thinks Jerry Reinsdorf and his partners are losing money from owning the Sox, I have some oceanfront property in Oklahoma I would love to sell you.


I agree that you were very conservative in your speculations and I believe that you intended to be fair but, by neglecting any expense other than salaries, I believe that your results somewhat missed their mark

With this in mind, I contacted Doug Pappas, who is the Chairman of SABR's Business of Baseball Committee and who writes articles about the business of baseball and other subjects for Baseball Prospectus.
His website is [/URL]
Since he has done a considerable amount of study on this subject, I asked him for the source of his information.
The info I originally referred to was taken from the 2001 data that MLB financial disclosures.
I will quote his (swift) response: "The $9 million loss comes directly from Major League Baseball's 2001 financial disclosures. It's almost certainly low. MLB hasn't released similar data for 2002-03, but even if it did, I wouldn't take it on face value.
I've also got a spreadsheet with Financial World and Forbes p/l estimates, which paint a very different picture of MLB's profitability."

The link for this data is [URL=http://www.forbes.com/free_forbes/2003/0428/064tab2.html] (http://www.roadsidephotos.com/baseball/)
This is the Forbes information. For the owners disclosure (if you want a good laugh) see Doug Pappas' webpage.

I would have attached the spreadsheets for both (the Forbes spreadsheet has a little more detail) but this is an .xls file which is not a valid file extension for this board

For those of you who are unable to access Excel, the Sox (2002)information is: Gate=$27mil + Other revenue=$79mil for a total income of $106 mil
Against this are: Player expenses=$68mil + Other expenses=$36.8mil for a total outlay of $104.8mil
The gross profit then is $1.2mil before interest, taxes and depreciation which means that if you believe Forbes' math, Jerry is essentially correct when he tells us that the Sox are a break even operation

I have had a similar experience working for a family owned business which also would not disclose their financial information to Forbes or Fortune and the magazine people were very close to the accurate data.

But each of you will believe what you want to believe so take this information anyway you wish...

Daver
11-30-2003, 07:38 PM
Originally posted by sox3
I agree that you were very conservative in your speculations and I believe that you intended to be fair but, by neglecting any expense other than salaries, I believe that your results somewhat missed their mark



My intent was not to contrast operating expenses vs income,it was to take a simple look at income,based on numbers that are common knowledge.

I specifically did not take anything that was not common knowledge into my my figuring,and stated why.That being said,I would trust the numbers released by MLB about as far as I could drop kick an elephant,this is the same organization that is led by a man that was all but accused of perjury when he appeared on Capitol Hill.

Forbes and Fortune have the name behind them,but in reality all they are doing is speculating,the same as I was,but with a little bit more knowledge as to what the percentages actually are.

doogiec
11-30-2003, 08:04 PM
According to the ISFA website, USCF has 7500 parking spots. Since the lots tend to fill up around 40,000 fans, the actual ratio is one car per five tickets sold. That puts total parking revenue at 6,000,000 before the split.

Any analysis of financial condition of any entity that doesn't consider expenses is fundamentally flawed. It is impossible to estimate money available for payroll without knowing all other expenses that the team incurs. It has been estimated that the White Sox pay in the neighborhood of $ 50 million per year in "non MLB player" expenses. Lets face it, we will never know the actual expense total so any attempt to back into the payroll dollars available is flawed.

Although this is the first real attempt by the "Reinsdorf is making a huge profit and lying" conspiracy theorists to show some actual dollar and cents, it falls far short of proving anything. For now I'll believe those who have some insight into MLB finances that suspect the White Sox are about a break even operation.

cornball
11-30-2003, 08:53 PM
Originally posted by doogiec
According to the ISFA website, USCF has 7500 parking spots. Since the lots tend to fill up around 40,000 fans, the actual ratio is one car per five tickets sold. That puts total parking revenue at 6,000,000 before the split.

Any analysis of financial condition of any entity that doesn't consider expenses is fundamentally flawed. It is impossible to estimate money available for payroll without knowing all other expenses that the team incurs. It has been estimated that the White Sox pay in the neighborhood of $ 50 million per year in "non MLB player" expenses. Lets face it, we will never know the actual expense total so any attempt to back into the payroll dollars available is flawed.

Although this is the first real attempt by the "Reinsdorf is making a huge profit and lying" conspiracy theorists to show some actual dollar and cents, it falls far short of proving anything. For now I'll believe those who have some insight into MLB finances that suspect the White Sox are about a break even operation.

First off, I didnt start this thread for an arguement. Daver made some great points based on what we know of the secret business of MLB.

First, you cant tell me it is a break even operation when it is impossible to estimate revenues or expenses. Don't you think it is funny the books are secret. When the commissioner did show the books (1991) they were flawed.

Secondly, who said the Sox split concessions for parking, I mean how do we know.

Third, someone said the Sox were break even on an earlier post, claiming there salaries were 68MM and qouting Fortune Mag and MLB.....well first the Sox payroll was closer to 58MM which they want to keep it at now and secondly the info put out by the magazine is worse than the info provided on this great website. The people here follow this everyday.

Fourth, look at the Sox lease agreement, JR held the state ransom and hasnt paid rent for many of the years of the lease.

5,6,7........ we could go on, the point Daver (if I can speak for you here) is making the numbers dont add up.....even though most revenues are not alot available and conservative estimates are used of some of them. Hell the Expos had a 45MM spent on salaries last year.

TornLabrum
11-30-2003, 10:55 PM
One reason the Sox keep their half-price nights is because the tickets sold for those games (aside from season tickets) are not counted as tickets sold for purposes of determining the amount of rent (if any) the Sox have to pay for the ball park.

They get their biggest crowds for those games, outside of the Cubs and maybe one or two other series, but end up paying no rent because those crowds don't count under terms of their lease.

I read recently that the Sox haven't paid rent for their ball park to the state for something like the past 4-5 years. Sweet deal!

sox3
11-30-2003, 10:55 PM
Originally posted by Daver
My intent was not to contrast operating expenses vs income,it was to take a simple look at income,based on numbers that are common knowledge.

Sorry, I misunderstood, based on what I interpreted in the conclusion of your article.

I specifically did not take anything that was not common knowledge into my my figuring,and stated why.That being said,I would trust the numbers released by MLB about as far as I could drop kick an elephant,this is the same organization that is led by a man that was all but accused of perjury when he appeared on Capitol Hill.

I fully agree that the owners' disclosure was a misrepresentation of the facts, primarily regarding their income.
The worst example of this is the fact that the Tribune Company pays less for the TV broadcast rights of the Cubs than they paid to the Sox. Just because they shift the profits to the parent company does not necessarily mean that the Cubs are unprofitable. Apparently, the Yankees will now be doing this using their relationship to the YES network, thereby allowing them to owe less toward the luxury tax fund.

Forbes and Fortune have the name behind them,but in reality all they are doing is speculating,the same as I was,but with a little bit more knowledge as to what the percentages actually are.

This was the point of my post: Forbes does this as their livelyhood and had additional insight into other means of income and expenses based on their ability to communicate with people who are in a position to know some of these things. People, such as Doug Pappas (who I quoted as not trusting the MLB figures) have considerably more faith in Forbes estimates.

Originally posted by Cornball
First, you cant tell me it is a break even operation when it is impossible to estimate revenues or expenses. Don't you think it is funny the books are secret. When the commissioner did show the books (1991) they were flawed.

No privately owned business will reveal their finances willingly. As I stated previously, I have had experience with family owned companies who were every bit as proprietary with their internal financial data. I would worry about the intelligence and sanity of any businessman who didn't care who knew his personal information. That is just not good business sense. Why let your competition know how you do business?

However, it is disappointing to think that the MLB owners wouldn't realize that, when they did "open their books", that everyone would take them at face value when discrepancies such as the Cubs/Sox WGN rights would be so obvious.

Also, as I said earlier: "But each of you will believe what you want to believe so take this information anyway you wish..."

If you will forgive me the pun, based on my experiences, I don't believe that Forbes nailed each team down to the penny, but I do think that they are in the ballpark with their speculations. These people are business professionals who know what to ask, who to ask, where to look and what they are looking for.

But that is my personal belief; I've been wrong before and I'm sure it will happen again. Hopefully, I'll continue to learn from my mistakes.

sox3
11-30-2003, 11:03 PM
Originally posted by cornball
Third, someone said the Sox were break even on an earlier post, claiming there salaries were 68MM and qouting Fortune Mag and MLB.....well first the Sox payroll was closer to 58MM...

One more point: the actual statement was the salary expenses were estimated at $68mil for 2002. I take this to include such incidentals as incentives and any deferred payments from previous years as well as, possibly, manager/coaches/trainers salaries.

kempsted
12-01-2003, 11:24 AM
Originally posted by TornLabrum
One reason the Sox keep their half-price nights is because the tickets sold for those games (aside from season tickets) are not counted as tickets sold for purposes of determining the amount of rent (if any) the Sox have to pay for the ball park.

They get their biggest crowds for those games, outside of the Cubs and maybe one or two other series, but end up paying no rent because those crowds don't count under terms of their lease.

I read recently that the Sox haven't paid rent for their ball park to the state for something like the past 4-5 years. Sweet deal!

Interestingly enough if you look at the schedule for next year there are only 4 Monday games. Last year there were 9. If it is still half price Monday they are cutting back on their half price games for next year. Or so it seems