Nationals to Sign Edwin jackson

[Elktonnick]

Anyone who thinks Baltimore is a big market doesn't live in the Baltimore area as I do. Here are the current facts.

 

The Orioles owners own 86% of MASN now and lose one point a year until it hits 67% ownership down the road.

 

Nats hire media consultant to improve MASN deal

By Adam Kilgore

The Washington Nationals have hired a high-profile media consultant to increase their share of the rights fees produced by the Mid-Atlantic Sports Network, according to a report by the SportsBusiness Journal. The decision and ensuing negotiation could have a significant and positive impact on the Nationals’ revenue.

 

The move comes at a critical time for two reasons. The Nationals’ deal with MASN has reached a five-year “reset” point, which means the Nationals can renegotiate with the Baltimore Orioles and MASN majority owner Peter Angelos to fall within market value. Across the league, newly formed deals with regional sports networks are filling the coffers of baseball franchises and creating an important new form of revenue.

 

The coming negotiation could generate a significant boost to the Nationals’ revenue, which may or may not trickle down to their payroll and on-field product. The Nationals should expect to “at least double or triple” the $29 million they earned last year from MASN, said one individual with knowledge of baseball’s television rights system who spoke on condition of anonymity.

 

The basis for the evaluation, this person explained, will be the recent television deals with regional sports networks in similar markets. The Texas Rangers recently extended their media rights deal with Fox Sports Southwest for 20 years and $1.6 billion. The Houston Astros signed a massive deal with Comcast that will begin in 2013, and the San Diego Padres are close to finishing a deal Fox Sports that reportedly will roughly double their old TV money.

 

The Nationals hired a consultant, Chris Bevilacqua, with rich experience in brokering the television rights deals, according to the SBJ report. Bevilacqua negotiated the Rangers’ deal, as well as many others across many sports. “He’s as good as there is,” the source said. “He’s done every deal.”

[User Name]

The Orioles have been in the mid-upper echelon of spending in MLB several times over the last decade.

 

You could say they're mid-tier, but definitely not small market like KC, TB, SD, PIT, FLA, OAK, CLE, ARI, CIN.

 

Even now, in a full-out rebuilding effort, they are still not bottom-10 in the league in payroll. Their profile suggests they could sustain a payroll in excess of 140 million if they were to build a contender.

 

Living or not living there is not important when assessing the facts, which are out there in the form of numbers.

[a700hitter]

Not true. The split gate went away with the 1997 CBA that introduced the current revenue sharing system.

 

http://bizofbaseball.com/index.php?option=com_content&view=article&id=4286:sports-labor-101-is-there-a-gate-split-in-mlb&catid=26:editorials&Itemid=39

 

[/obnoxious emoticon]

There are still other income streams that are not shared under the licensing agreement. You are ignoring them. A significant amount of those income streams comes from outside the local area.

[a700hitter]

The NATs are generally considered a "small " market team because: Revenues from MASN are split 90% Orioles, and 10% Nationals, and that will only shift to a 67% - 33% split in 20 years. It was part of the sweetheart package to the Orioles for swiping half their market away from them and relocating the Expos to DC .

 

BTW the metro Washington area is considered the 9 th largest media market including radio And the Nats divide that territory with the O's.

 

Are the O's a small market team? If your answer is yes then so are the NATS!

I've been waiting for you to weigh in on this issue as I know that you have more knowledge about the region than anyone posting in this forum. iortiz has made compelling business arguments coming to this conclusion, but we have been lacking some reliable regional input. What is your opinion about the reasons for their failure to build a following in the region?

[a700hitter]

Well what are you going to do 700? VA has full confidence that the front office knows what it's doing and cannot understand how some of us can see that in many instances they don't. Since she apparently doesn't know that much about baseball save for the fact that she loves the Red Sox' date=' she becomes unglued when discouraging words are splashed on the computer board. [b']Well she put me on ignore so she no longer has to read anything I write so I most likely will not hear much from her from here on in.[/b]

Fred, you lucky bastard!

[Elktonnick]

I've been waiting for you to weigh in on this issue as I know that you have more knowledge about the region than anyone posting in this forum. iortiz has made compelling business arguments coming to this conclusion' date=' but we have been lacking some reliable regional input. What is your opinion about the reasons for their failure to build a following in the region?[/quote']

 

One thing to understand about this area is that only 35 miles separate Camden Yards from the Nats ballpark and Washington and Baltimore are two very different cities in their outlook toward sports. The O's used to draw from DC down to Fredricksburg VA. Now they have become essentially a small market team despite what some may say who have never visited Fenway or Yankee Stadium South when the Red Sox or Yankees are in town. The O's have lost the VA/Washington suburbs to the Nats. The Nats on the other hand split the Maryland Washington suiburbs with the O's. DC is a Redskins and/or perhaps a Capitals town.

 

Most DC residents are transplants except for the comparative few who were born there. So most baseball fans are likely fans of other teams. No one remembers the old Senators. It will take the Nats years to build up loyalty which will require them to spend bug bucks from their owners personal fortunes to buy a winner since their TV contracts sucks.

 

The Nats have potentially a larger population to draw from than do the Orioles. Maryland has less population than Mass. Western Marylanders are more likely to be Pirates fans. Elkton where I work begins Phillies territory. Delaware above the C&D canal is Phillies territory. Lower Delaware which has about 200k in population is largely O's country. And the Maryland Washington subeurbs are split but remain more O's than Nats fans.The Nats then can count on VA mostly.

 

One of their biggest problems the NATS have is Washington's terrible traffic. Many are reluctant to come into Washington City for a night game especially where the ball park is located.

 

There are many who believe that the Nats are unlikely to survive here unless the franchise builds a conteneder in the next 5 years.

[a700hitter]

One thing to understand about this area is that only 35 miles separate Camden Yards from the Nats ballpark and Washington and Baltimore are two very different cities in their outlook toward sports. The O's used to draw from DC down to Fredricksburg VA. Now they have become essentially a small market team despite what some may say who have never visited Fenway or Yankee Stadium South when the Red Sox or Yankees are in town. The O's have lost the VA/Washington suburbs to the Nats. The Nats on the other hand split the Maryland Washington suiburbs with the O's. DC is a Redskins and/or perhaps a Capitals town.

 

Most DC residents are transplants except for the comparative few who were born there. So most baseball fans are likely fans of other teams. No one remembers the old Senators. It will take the Nats years to build up loyalty which will require them to spend bug bucks from their owners personal fortunes to buy a winner since their TV contracts sucks.

 

The Nats have potentially a larger population to draw from than do the Orioles. Maryland has less population than Mass. Western Marylanders are more likely to be Pirates fans. Elkton where I work begins Phillies territory. Delaware above the C&D canal is Phillies territory. Lower Delaware which has about 200k in population is largely O's country. And the Maryland Washington subeurbs are split but remain more O's than Nats fans.The Nats then can count on VA mostly.

 

One of their biggest problems the NATS have is Washington's terrible traffic. Many are reluctant to come into Washington City for a night game especially where the ball park is located.

 

There are many who believe that the Nats are unlikely to survive here unless the franchise builds a conteneder in the next 5 years.

I had posted much of this information based on my experience. I have friends who have lived in the area and worked in DC for more than 20 years. I have also visited DC about 100 times. I am somewhat familiar with the demographics of the city and surrounding suburbs and the challenges of the traffic. Your observations are much more authoritative. I am glad you have weighed in.

[User Name]

Personal experience beats available data. Got it.

[iortiz]

The problem is that no one has "a" definition when in regards to a team's market size. However' date=' it is generally accepted that a team's market size is defined by its ability to spend. Out of the three things i mentioned, a and b are what lead to c, which is the basis of the large/mid/small size nomenclature.[/quote']

 

I see. Then... there's not a "true" definition/metric in order to assign a size, right?.

 

The problem is when you assign a value to each criteria. Its "size" could be ambiguous. Nevertheless, let's try to work with this. For example, in our case, Nats' Ranking attendance is #14 out of 16 in the NL and its TV ratings rank is #27. This category could be its market share. Nats' valuation (related with their ability to generate revenue) according with Forbes is #16 and their ability to spend could be measured via Payroll . Last year they were #23 in that department. All these numbers are from 2011. It is all I know and nobody knows what is going to happen with its 2012 revenue. I do not know which rank they are going to take in the overall 2012 MLB payroll rankings either. Nobody knows what is going to be their assistance/ TV ratings in 2012.

 

Summary.

 

Nats' Value #16

Nats' Payroll #23

Nats' Market share #21/30 attendance in the NL and #27 in TV ratings.

 

This is the only data available. Other aspects are speculation and IMO we shouldn't consider. I'm not sure if you guys feel comfortable with this data at this point in order to continue the analysis.

 

Are we agree at this point? or am I missing something? if yes, please let me know in order to consider it.

[a700hitter]

I see. Then... there's not a "true" definition/metric in order to assign a size, right?.

 

The problem is when you assign a value to each criteria. Its "size" could be ambiguous. Nevertheless, let's try to work with this. For example, in our case, Nats' Ranking attendance is #14 out of 16 in the NL and its TV ratings rank is #27. This category could be its market share. Nats' valuation (related with their ability to generate revenue) according with Forbes is #16 and their ability to spend could be measured via Payroll . Last year they were #23 in that department. All these numbers are from 2011. It is all I know and nobody knows what is going to happen with its 2012 revenue. I do not know which rank they are going to take in the overall 2012 MLB payroll rankings either. Nobody knows what is going to be their assistance/ TV ratings in 2012.

 

Summary.

 

Nats' Value #16

Nats' Payroll #23

Nats' Market share #14/16 attendance in the NL (Does anybody have its overall ranking?) and #27 in TV ratings.

 

This is the only data available. Other aspects are speculation and IMO we shouldn't consider. I'm not sure if you guys feel comfortable with this data at this point in order to continue the analysis.

 

Are we agree at this point? or am I missing something? if yes, please let me know in order to consider it.

Overall attendance is 21 out of 30. They were 49 ahead of Pittsburgh who was #22.

[User Name]

The #3 part of the equation, which is ability to spend.

 

If the Phillies had an 80 million dollar payroll, they would not be considered "large market".

 

Over the last five years, the Nationals have made offers in excess of 100 million to three players (Fielder, Teixeira, Werth) offers in excess of 80 million CJ Wilson and some others. They have laid offers for most high-profile FA's over the last couple of years.

 

This tells you that the most important component "ability to spend" is there. The Nats could support a payroll in excess of 120 million right now. And as we know, viewership is fickle. If the Nats put up a contender, their value, attendance and TV ratings would go up dramatically.

 

The thing to see here though, is the fact that they have money to burn. One aspect that is true of any and all small market teams is the fact that they never have "money to burn". Ask Tampa.

[iortiz]

The #3 part of the equation, which is ability to spend.

 

If the Phillies had an 80 million dollar payroll, they would not be considered "large market".

 

I haven't made the tiers. That is going to be the next step. I'm going to suggest a criteria, then you can tell me if you agree. First off, we need solid data.

 

Over the last five years, the Nationals have made offers in excess of 100 million to three players (Fielder, Teixeira, Werth) offers in excess of 80 million CJ Wilson and some others. They have laid offers for most high-profile FA's over the last couple of years.

 

This tells you that the most important component "ability to spend" is there. The Nats could support a payroll in excess of 120 million right now. And as we know, viewership is fickle. If the Nats put up a contender, their value, attendance and TV ratings would go up dramatically.

 

The thing to see here though, is the fact that they have money to burn. One aspect that is true of any and all small market teams is the fact that they never have "money to burn". Ask Tampa.

 

The only data available and facts are those which I already presented.

 

Over the last five years, other teams have made a lot of things that could have impacted their future in several ways and should be considered as well. Nobody could remember these factors with precession. This "intentions/projections" do not have a true value/rank, since those are not even realities.

 

As I said...Let's not speculate, Let's not put noise to the case. Let's not put "ifs". Let's not put "woulds". Let's put hard data. IMO it is the good way to do it. I could speculate in other several things, and we will end in circles again. Are you guys agree? can we continue?

[iortiz]

There are still other income streams that are not shared under the licensing agreement. You are ignoring them. A significant amount of those income streams comes from outside the local area.

 

As you know, I'm planning to go in July to Boston. I think that I'm going to buy the destination pack. It is 1300 plus flight tickets around 1500 plus expenses 2000 (I think)... The whole thing is going to cost me around 5,000. I have a question, does this revenue (destination pack) go to Red Sox's books? or it is shared with the other teams.

[iortiz]

Overall attendance is 21 out of 30. They were 49 ahead of Pittsburgh who was #22.

 

Got it and corrected.

[Elktonnick]

Got it and corrected.

 

Knowledgeable observers do not consider either Baltimore or Washington large market teams. I haven't heard one professional sportwriter refer to them as such. It is really silly to think otherwise. The real issue regarding the NATS is whether they can survive in DC until they can build fan loyalty and a fan base sufficient for them to compete on a regular basis for a playoff spot. There are more than a few here who don't think they can.

[Elktonnick]

Got it and corrected.

 

Knowledgeable observers do not consider either Baltimore or Washington large market teams. I haven't heard one professional sportwriter refer to them as such. It is really silly to think otherwise. The real issue regarding the NATS is whether they can survive in DC until they can build fan loyalty and a fan base sufficient for them to compete on a regular basis for a playoff spot. There are more than a few here who don't think they can.

[User Name]

"Knoweledgeable observers" would not call them small market either. There is a tier that's right between small and big where the Orioles reside and the Nationals are pulling out of.

[User Name]

As I said...Let's not speculate' date=' Let's not put noise to the case. Let's not put "ifs". Let's not put "woulds". Let's put hard data. IMO it is the good way to do it. I could speculate in other several things, and we will end in circles again. Are you guys agree? can we continue?[/quote']

 

There is no noise or speculation. Actions speak louder than words. Intent exists and should be considered a factor.

 

Had Fielder not spun them for the Tigers, they would have two 100 mill contracts and a 90 million dollar payroll.

[ORS]

As you know' date=' I'm planning to go in July to Boston. I think that I'm going to buy the destination pack. It is 1300 plus flight tickets around 1500 plus expenses 2000 (I think)... The whole thing is going to cost me around 5,000. I have a question, does this revenue (destination pack) go to Red Sox's books? or it is shared with the other teams.[/quote']

How does the destination pack work? Are you one-stop-shopping through the Red Sox? If so, the price of your ticket purchase to the games plus whatever service markups they charge for cooridnating your flight/hotel/etc....if that is what they are doing....goes to the Red Sox and is not shared.

 

The big component of this is the tickets to Fenway, which are already accounted for by Forbes in the gate totals. However, they've sold-out the park since 2004. If they offered those tickets locally, they'd still get sold. The only thing they gain over the local market is the service fee markup on booking your travel, which is inconsequential when we are looking at revenues in the hundreds of millions.

 

There are still other income streams that are not shared under the licensing agreement. You are ignoring them. A significant amount of those income streams comes from outside the local area.

What, the bricks and grass and dirt gimmicks? Again, we are looking at revenues in the hundreds of millions in terms of magnitude. Do you honestly think those things account for anything more than a fraction of a percent on that scale? Your big component in your previous post was the split gate, but you were dead wrong about it.

 

I'll admit, I haven't dug into these other outside-the-market revenue sources, so if there's something else, I'd like to hear about what I'm not considering. However, when you factor in magnitude, I think the league has pretty much made everything outside the local market part of the common good.

[a700hitter]

How does the destination pack work? Are you one-stop-shopping through the Red Sox? If so, the price of your ticket purchase to the games plus whatever service markups they charge for cooridnating your flight/hotel/etc....if that is what they are doing....goes to the Red Sox and is not shared.

 

The big component of this is the tickets to Fenway, which are already accounted for by Forbes in the gate totals. However, they've sold-out the park since 2004. If they offered those tickets locally, they'd still get sold. The only thing they gain over the local market is the service fee markup on booking your travel, which is inconsequential when we are looking at revenues in the hundreds of millions.

 

 

What, the bricks and grass and dirt gimmicks? Again, we are looking at revenues in the hundreds of millions in terms of magnitude. Do you honestly think those things account for anything more than a fraction of a percent on that scale? Your big component in your previous post was the split gate, but you were dead wrong about it.

 

I'll admit, I haven't dug into these other outside-the-market revenue sources, so if there's something else, I'd like to hear about what I'm not considering. However, when you factor in magnitude, I think the league has pretty much made everything outside the local market part of the common good.

Have you factored in the revenue from Red Sox Nation Memberships. They have several levels of membership that entitle you to different levels perks. Also, have you factored in the nuber of fans that travel to Boston from outside the region to see Sox games. I go to about 8-10 games every year. There are thousands of fans like me. On this forum, just for the upcoming season we have posters who will be traveling to Fenway from Miami, Mexico and California. I don't know if Elk is coming up from MD or VA is coming from VA. Other teams don't have that. How do you factor that in? You are surely missing some of these revenue streams. The Red Sox are not missong any of them. They have done an excellent job at creating these many income streams.

[iortiz]

There is no noise or speculation. Actions speak louder than words. Intent exists and should be considered a factor.

 

Had Fielder not spun them for the Tigers, they would have two 100 mill contracts and a 90 million dollar payroll.

 

Do you really want to explore that avenue?

 

UN?, those "actions" are not realities. As I said, in order to be consistant and put a good foundation to this excersise those considerations/intentions will not easy to rate/measure through each team. How would you re-rate/rank that department? we should consider other teams' "intentions" over the last five years that would have changed their future. We would go in circles over and over again. That would be an endless path. I want to avoid that. That exercise will take us a lot of time and a lot speculation. As I said, that path is not practical IMO.

 

What does the rest of the people think?

[ORS]

Have you factored in the revenue from Red Sox Nation Memberships. They have several levels of membership that entitle you to different levels perks. Also' date=' have you factored in the nuber of fans that travel to Boston from outside the region to see Sox games. I go to about 8-10 games every year. There are thousands of fans like me. On this forum, just for the upcoming season we have posters who will be traveling to Fenway from Miami, Mexico and California. I don't know if Elk is coming up from MD or VA is coming from VA. Other teams don't have that. How do you factor that in? You are surely missing some of these revenue streams. The Red Sox are not missong any of them. They have done an excellent job at creating these many income streams.[/quote']

The bare bones RSN membership is $14.95, and it includes access to MLB Gameday audio streaming. MLB Gameday audio streaming costs $14.95 anyway. How much of that membership fee do you think they get to keep?

 

How do the Red Sox benefit from out of town fans when they sell-out games the way they do? Those tickets would sell regardless. Local travel industry (hotels, airlines, rental cars) benefit.

[User Name]

Do you really want to explore that avenue?

 

UN?, those "actions" are not realities. As I said, in order to be consistant and put a good foundation to this excersise those considerations/intentions will not easy to rate/measure through each team. How would you re-rate/rank that department? we should consider other teams' "intentions" over the last five years that would have changed their future. We would go in circles over and over again. That would be an endless path. I want to avoid that. That exercise will take us a lot of time and a lot speculation. As I said, that path is not practical IMO.

 

What does the rest of the people think?

 

There is no "going in circles" and the "actions are not realities" theme does not apply here.

 

What we are trying to measure is ability to spend. Realistically, the fact that the Free Agents turned down the Nationals offers doesn't mean that they were not willing and able to make those financial commitments.

 

The contract offers are out there for all to see. So if they exist, how are they not a reality?

 

In essence, what i am trying to point out here is that if it was up to the Nationals, they would have a payroll well in excess of 100 million, and their actions (in the form of contract offers) reinforces that notion.

[iortiz]

There is no "going in circles" and the "actions are not realities" theme does not apply here.

 

What we are trying to measure is ability to spend. Realistically, the fact that the Free Agents turned down the Nationals offers doesn't mean that they were not willing and able to make those financial commitments.

 

The contract offers are out there for all to see. So if they exist, how are they not a reality?

 

In essence, what i am trying to point out here is that if it was up to the Nationals, they would have a payroll well in excess of 100 million, and their actions (in the form of contract offers) reinforces that notion.

 

I got you point perfectly. The thing is that those "100 M" (inexistent) are the double of its 2011 payroll for whatever reason. They will always face those market challenges. Their past suggest me that they will likely lose those bid wars vs Big Market teams. Besides, What about other 29 teams' intentions over the last five years? how would you re-rank this department considering those intentions in order to be consistent through this exercise? I just do not see your point viable/practical. I'm not sure if I'm clear here.

 

What other people think?

[User Name]

I got you point perfectly. The thing is that those "100 M" (inexistent) are the double of its 2011 payroll for whatever reason. They will always face those market challenges. Their past suggest me that they will likely lose those bid wars vs Big Market teams. Besides, What about other 29 teams' intentions over the last five years? how would you re-rank this department considering those intentions in order to be consistent through this exercise? I just do not see your point viable. I'm not sure if I'm clear here.

 

What other people think?

 

The point is that no team that you could consider outright "small market" has attempted to sign a player to a 100 million dollar contract this past five years.

 

Find me an instance where the Rays, Marlins (pre-2012), Padres, Pirates, Royals, Reds, A's, Diamondbacks or Guardians have reportedly offered a Free Agent 100 million or more to sign with them. The inability to do so is a large component of a team's "Small Market" moniker.

[a700hitter]

The bare bones RSN membership is $14.95, and it includes access to MLB Gameday audio streaming. MLB Gameday audio streaming costs $14.95 anyway. How much of that membership fee do you think they get to keep?

 

How do the Red Sox benefit from out of town fans when they sell-out games the way they do? Those tickets would sell regardless. Local travel industry (hotels, airlines, rental cars) benefit.

You have no solid information about anything you are saying above, and neither do I. We can't quantify these revenues streams, but the Sox do have numerous income streams that other teams do not. They are not going through all of the trouble to create these income streams unless it is putting money directly into their coffers.

 

I have 62 Red Sox tickets sitting on my shelf. How do you know what the impact on the sellout streak is from people venturing to Boston from beyond Massachusetts. You don't. What point are you trying to make anyway? I thought the discussion was with regard to whether the Nationals were a big market team? Everything that I have read and the figures that I have seen indicate otherwise. On the one hand when I ask you for figures to support the assertion that the Nats are a big market team, which they clearly are not, part of your argument that the Nats are a big market team has been based on the fact that a lot of the financial information isn't public and therefore not considered by Forbes. You have no figures to support your argument. Yet, on the other hand you are claiming to know the magnitude of the variuos income streams benefiting the Red Sox that are also not disclosed publicly. It seems that you are talking out of both side of your mouth.

[a700hitter]

I got you point perfectly. The thing is that those "100 M" (inexistent) are the double of its 2011 payroll for whatever reason. They will always face those market challenges. Their past suggest me that they will likely lose those bid wars vs Big Market teams. Besides, What about other 29 teams' intentions over the last five years? how would you re-rank this department considering those intentions in order to be consistent through this exercise? I just do not see your point viable/practical. I'm not sure if I'm clear here.

 

What other people think?

My view of payroll as an indicator of Market size is that it is very unreliable. Miami is spending a lot on payroll for the upcoming season and in past seasons they have also spent big --1997 and 2002. However, they were unable to maintain those payrolls consistently because their market wouldn't sustain it. They were trying to stimulate interest and build a fan base by building powerhouse teams that won championships. It didn't work. The Nationals are trying very much the same thing. It should work better than it did for the Marlins, but will it work well enough to support a big payroll consistently? Will it work well enough to build a loyal consistent fanbase, when it has been pointed out by other posters that DC residents don't go to games and the suburban base of fans would rather avoid the torturous traffic patterns in the area? Only time will tell, as E1 would say. However, at this point in time, they are not a big market team, and there isn't a single reliable report saying otherwise.

[ORS]

You have no solid information about anything you are saying above, and neither do I. We can't quantify these revenues streams, but the Sox do have numerous income streams that other teams do not. They are not going through all of the trouble to create these income streams unless it is putting money directly into their coffers.

 

I have 62 Red Sox tickets sitting on my shelf. How do you know what the impact on the sellout streak is from people venturing to Boston from beyond Massachusetts. You don't. What point are you trying to make anyway? I thought the discussion was with regard to whether the Nationals were a big market team? Everything that I have read and the figures that I have seen indicate otherwise. On the one hand when I ask you for figures to support the assertion that the Nats are a big market team, which they clearly are not, part of your argument that the Nats are a big market team has been based on the fact that a lot of the financial information isn't public and therefore not considered by Forbes. You have no figures to support your argument. Yet, on the other hand you are claiming to know the magnitude of the variuos income streams benefiting the Red Sox that are also not disclosed publicly. It seems that you are talking out of both side of your mouth.

I provided an analysis of the figures that Forbes used that you have, apparently, ignored. That's not my fault, and it's lazy, and/or dishonest, of you to portray may argument as lacking in data.

 

I acknowledged that any attempt to understand other revenue sources would be speculative, and that I thought it was better to speculate than to ignore them completely. Ownership, or part ownership, of a regional broadcast network is a strategic move to supplement team revenues that has been in the playbook for years. It's common knowledge. Why should we ignore it when a team does it in such a large media market? In other words, use common sense to apply them. I have not stated I know the magnitude of these things, I'm asking you if you think their magnitude is large enough to have any impact given the size of the revenues tracked by Forbes. I don't think they are. Your response to that is a failed attempt to portray me as contradictory. I'm not. I openly accept, and have even asked for speculation, but I expect what you are speculating on to make a good case for inclusion.

 

Why won't you answer my questions? If RSN costs $14.95 and includes access to MLB Gameday audio, and MLB Gameday audio costs $14.95, how much do you think they get out of this? Is this an unreasonable question? I don't think it is, not when you are using it to suggest it will have a meaningful impact on a team that generated over $270M in revenues as reported by Forbes in 2010.

 

I'm open to other suggestions, but ask yourself if they pass the smell test first. That's all. Yes, I acknowledge they are making something from these ventures. They wouldn't do it for nothing, but there's also more to this than revenues. This is a "branding" type of move. Generating interest, engaging fans, gaining popularity, which ultimately increases the valuation of the team. I think a lot of these moves aren't big money makers so much as they are name makers to inflate the team's valuation. In 9 short years, Henry has increased the valuation of the team from $400M to over $900M. That's where these types of moves are real money makers.

 

What point am I trying to make? Follow the discussion. This tangent was initiated by iortiz's comment about focussing on expansion into markets outside of the local market. Yes, they are absolutely interested in that. Every business owner in the world is interested in increasing the valuation of his/her enterprise, but in the discussion of big vs. small market teams, where the generally used dividing point is revenues and the ability to spend money, I don't see where the Sox out-of-market popularity generates a revenues differential from the competition based on the current revenue sharing.

[iortiz]

Have you factored in the revenue from Red Sox Nation Memberships. They have several levels of membership that entitle you to different levels perks. Also' date=' have you factored in the nuber of fans that travel to Boston from outside the region to see Sox games. I go to about 8-10 games every year. There are thousands of fans like me. On this forum, just for the upcoming season we have posters who will be traveling to Fenway from Miami, Mexico and California. I don't know if Elk is coming up from MD or VA is coming from VA. Other teams don't have that. How do you factor that in? You are surely missing some of these revenue streams. The Red Sox are not missong any of them. They have done an excellent job at creating these many income streams.[/quote']

 

I do not have the NYY's/BOS's books in order to know what is the impact (value) of these income streams via other markets (directly/indirectly). I do not know if these streams are about 100* of millions or 10* of millions or only a couple of millions. I do not even know how much their global exposure/popularity could impact the BRAND-value specially in big market teams like Boston or NYY, e.i. if they decide to sell only the franchise someday. I suppose a lot.

 

On the other hand, and looking at MLB teams' operative incomes (EBIDA), the magnitudes fluctuate from -6 M to 30 M; Forbes suggests. It's curious that the only two teams that had negative records were the Mets and the Red Sox in this regard. We have been saying that our baseball operations did not look good from an outside-in perspective. Forbes suggests that Red Sox' 2011 EBITDA was -1.1 M (Probably this was the driver of the clean up). This team was not profitable according with Forbes last year (Maybe this was the reason why they do not want to spend this year among other). If these streams represent the 1-3% of Red Sox' franchise value (which is a very viable quantity IMO) , and if we put this in perspective, it would have represented a 10-20 M EBITDA. NYY's operative income (EBITDA) according with Forbes was 25 M. If all these is true, their interest in other markets is legit and important IMO, and could play an interesting role in the size of a team (franchise value/brand value). But again, we will never know since we do not know how they make their revenue recognition.

[ORS]

I do not have the NYY's/BOS's books in order to know what is the impact (value) of these income streams via other markets (directly/indirectly). I do not know if these streams are about 100* of millions or 10* of millions or only a couple of millions. I do not even know how much their global exposure/popularity could impact the value specially in big market teams like Boston or NYY, e.i. if they decide to sell only the franchise someday.

 

On the other hand, and looking at MLB teams' operative incomes (EBIDA), the magnitudes fluctuate from -6 M to 30 M. It's curious that the only two teams that had negative records were the Mets and the Red Sox. We have been saying that our baseball operations does not look good from an outside-in perspective. Forbes suggests that Red Sox' 2011 EBITDA was -1.1 M (Probably this was the driver of the clean up). This team was not profitable according with Forbes last year (Maybe this was the reason why they do not want to spend this year among other). If these streams represent the 1-3% of Red Sox' value (which is a very viable quantity IMO) , and if we put this in perspective, it would have represented a 10-20 M EBITDA. NYY's operative income (EBITDA) according with Forbes was 25 M. If all these is true, their interest in other markets is legit and important IMO. But again, we will never know since we do not know how they make their revenue recognition.

I'm not sure if you are aware of this, but operating income can be a little misleading, particularly for the Red Sox and Yankees, here's why....

 

From Wikipedia

Second, by owning their own RSN, teams that must share revenues with other members of their league can mask its broadcast-related profits. Under the old model, a team collects a large fee for licensing its games to the RSN. That fee would then be disclosed and shared with the other teams in the league. Under the new, team-owned RSN model, the team demands only a nominal fee, so the profits for local broadcasting stay with the team.

 

http://en.wikipedia.org/wiki/Regional_sports_network

 

This has been written about many, many times in the past on the topic of revenue sharing and how the biggest financial giants of the sport fudge the books to hide revenues from the revenue sharing pool. There's also a benefit for teams that take from the revenue sharing pool that have ownership of their network. By committing to the same undervalued cost of broadcast rights, their reported revenues will be smaller relative to their peers, increasing their benefit through revenue sharing. It is a widely recognized problem with the system.

 

Operating income is important when you are analyzing most businesses, but in baseball, when a club has ownership of its broadcast network, they need to be taken with a grain of salt.