Today’s report from Sports Business Journal’s John Ourand indicates that MLB’s national television deals are just about locked in. We’ve discussed this a couple times now. I’ve done some rough math on it, and the financial picture looks even healthier than I previously projected. Sure, the TV deals will more than double in value, from $660 million to $1.55 billion. But it’s when that figure is coupled with all other sources of national revenue that the picture starts to really brighten.
The table above reflects rising revenues from every source except for Sirius XM, whose deal was locked in years ago with the money paid in advance. MLB Advanced Media, the internet and broadcasting subsidiary of MLB, admitted last year that it was hitting nearly $500 million in revenue just for 2010. Combine each team’s share with other non-TV sources (adjusted for inflation), and each team comes away with $31.8 million per year. All told, that’s an estimated $83.5 million per year.
That doesn’t even include the dividend each team ownership group gets as an equity partner in MLB AM.
Every team is going to get this windfall, so it’s not as if the A’s or Rays are getting some great competitive advantage. It will allow both teams to be able to confidently offer FA-competitive long-term deals to their own free agents, though $100 million payrolls are still probably beyond reach. To get $100 or $110 million payrolls, both teams will need new stadia. The impressive thing about these bumps is that the A’s will get $10-15 million more via Central Revenue than they get from playing in the Coliseum. Add in local TV/radio and the usual $30 million or so in annual revenue sharing, and the A’s should net $180-185 million per year starting in 2014. Not rich compared to the other teams, but a far cry from destitute.
How much of a factor will this play into the A’s long term being able to finance a stadium? Obviously, seat licenses, season tickets, tv deal and sponsorship are the bulk. Does this help more than just a little?
Jesus, forget treasury bonds. I want to invest in a pro sports team.
@ ML – “… the A’s will get $10-15 million more via Central Revenue than they get from playing in the Coliseum.” ML, could you elaborate on this? Are you only counting certain sources of current revenue in your comparison, i.e. the gate receipts, etc.? The reason I ask is that I thought the A’s gross revenue (incl rev sharing) is around $160m or so as of last year. I also figured the slight bump in attendance would add another $5m-$8m this year. I was thinking that this extra $80m starting in 2014 would put them into the $240-250m range. Also, are you using the total of $83.5m as being considered from Central Revenue in your comparison or the $31.8m line-item? Thanks.
@Columbo – Depending on attendance, the A’s usually get $50-70 million annually from gate/concessions/parking. The revenue sharing receipt only comes after all accounting is complete. This isn’t an extra $83.5 million. It’s an extra $30-35 million.
Ok, thanks ML.
Here are some more rumors about the A’s this time from SF Chronicle.
I’d say the extra cash will come in very handy re annual debt payments for private financing. Coupled with increased revenues from future Cisco Field and things will really be looking good for the franchise ($$$..).
Sounds like Slusser has been talking to Mr. Wolff. You know, the ultimate “official from another club…someone close to Selig…insider, etc” 😉 Things are definitely looking up.
BTW, more owners are now on board with San Jose probably because the A’s have proven they can make it work in SJ, ie financing of the ballpark, corporate support, etc.
@Tony, I don’t think so, it would violate professional ethics to MISidentify a source, as opposed to just masking the identity.
Makes it all the more baffling to me that the Yanks are so publicly determined to get under the tax line of $189M within 3 years.
Within five years, virtually every team in baseball will sport a $90M payroll, minimum, because of these new TV deals. The Yankees used to ensure playoff berths in part because their payroll was 4x higher than the bottom-feeders. In the near future, if they follow through with their oft-stated plan, their payroll will only be 2x as high as the lowest in MLB…AND they’ve basically lost the ability to outspend anyone on the int’l market and via the draft, via the new restrictions in the CBA. So…they are basically setting themselves up to risk missing the playoffs, even though they have the money to virtually guarantee playoff berths, and remain profitable.
I don’t get it.
>>A lot more owners = 75% or more ?
The reason why the Yankees want to get under the $189m threshold, is this. If the Yankees did manage to avoid paying the luxury tax from 2014-16, that would mean they would save $25.75 million per season plus they could get in on the new “market disqualification revenue sharing program” that supposedly could net them another $40 million a year. Or essentially, the Yankees would be pocketing an extra $65 million a season by cutting payroll by just $18 million. bronxbaseballdaily.com/…/rumor-yankees-want-to-cut-payroll…Share
The target becomes easier to hit, as certain contracts come off the books. Some simple examples of this are 1: Derek Jeter. His contract goes from $17m in 2013 to $8m in 2014 (Player option). 2: Nick Swisher. His $12m comes off the books this year. 3: Quite likely Rafael Soriano ($13m opt out clause). 4: Curtis Granderson’s $13.5m ending after 2013. Throw in the fact they have guys like Mark Montgomery, Brett Marshall, and Mason Williams coming means they have a chance to be competitive and save money.
Good info. from ML – owning an MLB club is likely more profitable than an NFL franchise. (For example, the Dodgers owners group paid $2.2 bil. for that team – when an NFL franchise – even with a newly built NFL stadium included – would come cheaper than that)
@daniel–article/quote indicates that the A’s have a reason to be optimistic–I would suggest that is a reasonable conclusion–
Greg Papa is annoying. He just shot down the most recent report. Said there is no chance of it happening. Baseball will not make the giants mad since they sale out all the time. There is no chance A’s ever move to San Jose. Slusser was just fed some… and got quiet. He started to get mad at anyone suggesting it could happen.
After Papa’s actions with 1140 couple weeks ago. Really getting tired of him. Use to be sorry for what happened to him with the Warriors also.
@Mike – Papa basically has a hard on for the A’s, which I’m guessing has something to do with them kicking him to the curb several years ago. His objectivity is questionable at best.
@doctork Yea it’s very obvious. When he first got on 95.7 it was a daily bashing of the A’s. He had seemed to back off it, but it’s come rearing back….. I would ask him about it. But I don’t have the $200 bucks he demands for a 10 min conversation that he already agreed to do. that was such bush league and to do it to a raider affiliate.
No! Not the voice of Da Raiders!?…(not concerned one bit over what Mr. Pappa says re the A’s and San Jose)
OT: looks like San Jose gets straight A’s for being the wealthiest city in the nation (SF second). What was that again about private financing of a stadium…
Pappa is a worm
I can only hope that in November there is word that this is all over and there is a real path forward, be it Lew Wolff is selling or the team is moving down the freeway a bit. I am just tired of all the bullshit.
PS- what the heck is this about Pappa and $200?
@jeffrey He was to do a weekly 10 minute segment with the raiders affiliate in Sacramento. He did the first week and talked about how he looked forward to talking to them each week. Everything went well. But before the next week’s show he demanded $200 for each 10 minute segment and said they should be happy for the freebie they got. They don’t pay people so that’s not going to happen. James Brown, Jim Nance, Frank Caliendo all have no problems calling in all the time without getting paid. What a little bitch. Plus Raiders are already having problems with getting fans, screwing over an affiliate doesn’t seem like the right choice.
Man he makes lawyers look cheap with that rate.
Pingback: Dodgers to become first $500 million franchise | newballpark