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Sunday, December 01, 2013

Rockies owner provides detailed look at team’s budget

[Monfort] also explained why he isn’t about to spend all that new TV money next year. He said he is planning to receive $8 million less, or $19 million, believing a chunk will be kept for baseball’s central fund to compensate for last season

...The $18 million is additionally siphoned, Monfort explained, to pay $5.5 million to the MLB credit line for past loans, $5 million for player raises and $3.5 million to cover projected revenue loss from not having the Yankees and the Red Sox play at Coors Field, series that drew huge crowds this past summer at inflated ticket prices. That leaves approximately $4 million to $5 million in “new” money, and the ability to add about $11 million to the payroll, he said.

There’s a lot of information in the article including Monfort’s outline of the Rockies’ expenses (see chart at the end of the article).

Rockies fans were already a bit upset by the announcement of plans to build a restaurant deck in right field. The thinking was that the Rockies were using the windfall from the new national TV contracts on the stadium rather than new players.  However, the article says the funds for the stadium are coming from other sources.

Monfort also says the Rockies’ revenue is at $170 million and his rule of thumb is to spend 50% on payroll.  Forbes most recent valuation article had the Rockies’ revenue at $199 million, and Bloomberg’s (the one with the fancy interactive chart) had it at $195 million.

puck Posted: December 01, 2013 at 02:51 PM | 21 comment(s) Login to Bookmark
  Tags: business, rockies

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   1. McCoy Posted: December 01, 2013 at 10:06 PM (#4608373)
Give me a blank P&L and no independent accounting oversight and I'll give you P&L that'll tell you whatever you want.
   2. eddieot Posted: December 01, 2013 at 10:40 PM (#4608383)
Seriously. I know nothing about Troy E. Renck but any reporter worth his salt would start with the fact that a team owner's assessment of the team's finances isn't worth any ink at all on its own. So I guess I know enough about Troy E. Renck. Poor owners.
   3. Select Storage Device Posted: December 01, 2013 at 10:44 PM (#4608384)
"I think (our plan) is working. Yes, we got last place. Yes, we were 10 games better," Monfort said. "Yes, we had three pitchers, four starting pitchers, whose winning percentage was 61 percent. So if you had a fifth, just like the other four, and you had a bullpen that did its share of the deal, you would win 98 games. That's a lot of games."


That's some stunning analysis.
   4. Gonfalon B. Posted: December 01, 2013 at 11:00 PM (#4608391)
All they need is to rotate fifty-four pitchers with 2-1 records and they'll be 108-54.
   5. Select Storage Device Posted: December 01, 2013 at 11:23 PM (#4608399)
Pull your five 4-1 starters after 2IP every game and let your bullpen handle the other 1100 innings.
   6. Walt Davis Posted: December 01, 2013 at 11:25 PM (#4608401)
Eh? They had 2 pitchers with a WP of 61% or better, one at 583 and one at 500. Those 4 combined for 61% which I guess is close enough to what he said. Of course one of those guys made just 20 starts and the total number of victories was 43. Give him another 5 wins, add another 13 win starter and you're still counting on the pen for 37 wins. Instead the pen was 20-28.

Granted, he has a point. In the 50 starts not started by their "big 4" their starters went 11-30. That is some really bad pitching -- an 80% decision rate and an atrocious record means these were mostly blowouts. Some examples:

Bettis, 8 gs, 0-3, 5.02 (+ 6 UER)
Oswalt, 6 gs, 0-5, 7.00
Manship, 4 gs, 0-4, 6.86
Pomeranz, 4 gs, 0-4, 8.10
McHugh, 4 gs, 0-3, 9.95

24 starts, 7-11 and an ERA around 6 from Garland and Francis don't look so bad now does it?

Again the value of not sucking -- granted, that's hard to avoid when it comes to 162 starts. That's 26 starts, 0-19, 94 ER, 100 R, about 122 IP. Manage to go 7-12 and the Rox are a 500 team. Go 12-7 as Montfort wants and Katie bar the door!
   7. bobm Posted: December 02, 2013 at 12:08 AM (#4608416)
Give me a blank P&L and no independent accounting oversight and I'll give you P&L that'll tell you whatever you want.

Remember these?

http://deadspin.com/5615096/mlb-confidential-the-financial-documents-baseball-doesnt-want-you-to-see-part-1
http://deadspin.com/5619509/mlb-confidential-part-2-seattle-mariners
http://deadspin.com/5619951/mlb-confidential-part-3-texas-rangers

The proportions in the budget in TFA do not seem wildly different from those statements above. I recall they were audited statements. That doesn't mean that they all aren't playing games, e.g., amortizing player contracts, etc.
   8. puck Posted: December 02, 2013 at 11:48 AM (#4608531)
All they need is to rotate fifty-four pitchers with 2-1 records and they'll be 108-54.

Ah man, come on. They might google this.
   9. Shooty Survived the Shutdown of '14! Posted: December 02, 2013 at 11:53 AM (#4608538)
to pay $5.5 million to the MLB credit line for past loans

MLB has been loaning money to the Rockies? What the hell?
   10. cardsfanboy Posted: December 02, 2013 at 11:56 AM (#4608544)
to pay $5.5 million to the MLB credit line for past loans

MLB has been loaning money to the Rockies? What the hell?


More to the point, why should an already accounted for prior expense be taken out of a "windfall" profit.... (I understand why from the owners point of view, I just don't think that is a good argument to be telling your fans)
   11. Shooty Survived the Shutdown of '14! Posted: December 02, 2013 at 12:07 PM (#4608559)
More to the point, why should an already accounted for prior expense be taken out of a "windfall" profit.... (I understand why from the owners point of view, I just don't think that is a good argument to be telling your fans)

That's just owners being owners--I'm more troubled by MLB throwing cash at certain teams. For what purpose? Are some teams treated more favorably than others?
   12. cardsfanboy Posted: December 02, 2013 at 12:19 PM (#4608574)
$3.5 million to cover projected revenue loss from not having the Yankees and the Red Sox play at Coors Field, series that drew huge crowds this past summer at inflated ticket prices.



This is another one of those comments that have to raise a few eyebrows. That is 5 games which, according to the owner, has a profit difference from a normal 5 game set of 3.5 mil. That is a huge profit difference. Mind you, the Rockies sell premium tickets for teams like the Cubs and Cardinal's also. More than likely they'll just shift the premium tickets to another series.


Man it's sometimes tough to find "basic" info on the web. Supposedly the Rockies "premium" prices is about double the cost of an average ticket, the Rockies average ticket is roughly $23, so assuming the doubling of prices is accurate, that comment is probably true. Of course that is assuming that they don't shift another 5 game stretch into double priced tickets.


Looking at attendance for those game, you have a listed attendance of 203,805 an average of 40,761 per game. (note the Dodgers series immediately following the Red Sox series outdrew the Red Sox by an average of 7,000 people) Rockies averaged 34,000 a game all season long.
   13. cardsfanboy Posted: December 02, 2013 at 12:21 PM (#4608578)
That's just owners being owners--I'm more troubled by MLB throwing cash at certain teams. For what purpose? Are some teams treated more favorably than others?


I don't think so, I think there is a general rule that pretty much any team can borrow from MLB. I know I've heard of other teams doing it, not sure what the requirements are.
   14. Shooty Survived the Shutdown of '14! Posted: December 02, 2013 at 12:23 PM (#4608584)
I don't think so, I think there is a general rule that pretty much any team can borrow from MLB.

Bud knows how to make friends. It would be interesting to know the ins and outs of how this loan fund is used and when and by whom and for what.
   15. tshipman Posted: December 02, 2013 at 12:35 PM (#4608598)
Monfort also says the Rockies’ revenue is at $170 million and his rule of thumb is to spend 50% on payroll.


This to me is the truly shocking statement.

First of all, from the attendance numbers above, the Rockies get approximately 70 million from attendance alone. They also receive 30 million from MLBAM. This means that they are making only about 70 million per year from all other revenue streams. That is really quite low.

Beyond that, you have a bald statement that they try to spend 50% of revenue on payroll. That is very, very low for professional sports! The NBA just had a huge lockout to get to that point, which allowed teams like the Milwaukee Bucks to be profitable before appreciation! If this is the case, MLBPA has really lost a ton of ground over the last decade. 10 years ago, player payroll was something like 58-60% of revenue. If 50% is the new normal, that means that the union has lost huge ground with nothing to show for it.

Quite frankly, as a Giants fan, this is welcome news because it means that the Rockies will virtually never attempt to be competitive unless all their drafts hit. If I were a Rockies fan, I'd be beyond livid. You're capping your payroll at 85 million? Your TV deal is worth less than 70 million per year? This seems to be an operation run only to make money, and they do a bad job of it!

Edit: TFA states that the Rockies receive 54 million starting next year as part of the national TV deal. That means that if they project revenue to 170 million, they must have a startlingly incompetent negotiation team in charge of local TV. These numbers are goofy and don't seem to add up.
   16. cardsfanboy Posted: December 02, 2013 at 01:34 PM (#4608681)
Beyond that, you have a bald statement that they try to spend 50% of revenue on payroll. That is very, very low for professional sports!


Not baseball, since baseball also has to fund the minor leagues, something the other pro sports don't have to worry about(except hockey)
   17. cardsfanboy Posted: December 02, 2013 at 01:36 PM (#4608684)
Bud knows how to make friends. It would be interesting to know the ins and outs of how this loan fund is used and when and by whom and for what


On past threads, we have wondered, if MLB would be willing to front the investment from the general fund, to fund a stadium for areas that need it. I know Bud likes to extort that money out of the city, but in some respects, if the league funds it, they could stand to profit from it, and even control, to an extent, how the team markets their product.
   18. McCoy Posted: December 02, 2013 at 05:13 PM (#4608938)
Gotta love the system. Bud takes money away from all teams but then allows them to borrow that money back from him, and with interest too!
   19. You Know Nothing JT Snow (YR) Posted: December 02, 2013 at 05:32 PM (#4608963)
Gotta love the system. Bud takes money away from all teams but then allows them to borrow that money back from him, and with interest too!


Hey, nobody loves a secret loan more than Honest Bud.
   20. puck Posted: December 03, 2013 at 02:07 AM (#4609290)
Mind you, the Rockies sell premium tickets for teams like the Cubs and Cardinal's also. More than likely they'll just shift the premium tickets to another series.


The tickets they sell for the Yankees and Red Sox are way above the usual "premium" they sell for the Cubs. I don't remember what the premium prices were for infield box seats, but they were $85 for the Red Sox and Yankees which is probably $20 higher.

$3.5M for 5 games, I suppose it's possible. That would be $17.50/seat for the roughly 40,000/game who saw those games. That's about 5,000 more than their average. Considering the 5 games were midweek games, it's probably more like 10,000+ more the team's average.

Though the second of those Sox games would have been a sellout no matter what, since it was Todd Helton's last home game.
   21. puck Posted: December 03, 2013 at 02:11 AM (#4609291)
Beyond that, you have a bald statement that they try to spend 50% of revenue on payroll. That is very, very low for professional sports! The NBA just had a huge lockout to get to that point,


I suppose it very much matters what counts as revenue, but is 50% low? A lot of the recent labor fights by the owners were to get players below 50%, right? So that sounds like where owners want to be.

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