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David Glass Newsbeat

Sunday, February 16, 2014

Royals’ ‘break-even’ claim is plausible, but front office can still do more

I think the man that ruthlessly cut costs at Wal-Mart and over his first decade of ownership of the Royals deserves the benefit of the doubt.

The first thing to talk about here is the new national television contracts that kick in this season. You hear a lot about this $25 million figure. That’s the number being thrown around locally and nationally — we’ve used it here — as the per-team increase from last year to this year. But some phone calls around baseball show the number to be misleading.

Most relevantly, there is no $25 million-per-team jump in revenues from 2013 to 2014. That figure (which doesn’t account for a share that MLB takes) comes from the average of the new contract compared to the average of the old contract. But the old deal increased every year, just like the new deal is scheduled to. The highest total of the old contract was last year, and the lowest total of the new contract is this year, so the raw increase from last year to this year is thought to be more like $5 million to $10 million, before MLB takes its share….

“Ninety million is a very big number for a franchise like the Royals,” Badenhausen says. “They’re spending money. They’re out of their days of the $30 million payroll. If you told Royals fans four years ago they’d be closing in on a $100 million payroll, I think they would’ve taken it.”...

Glass may very well lose money this year, but an owner more focused on taking advantage of this opportunity and less on a potential one-year loss would be willing to extend further beyond break-even. Then again, an owner solely focused on profit would keep the payroll below that break-even point.

Glass is operating, in other words, like a C student.

 

RoyalsRetro (AG#1F) Posted: February 16, 2014 at 01:28 PM | 6 comment(s)
  Beats: david glass, new tv contract, royals

 

 

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