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Baseball Primer Newsblog — The Best News Links from the Baseball Newsstand Wednesday, March 27, 2013Rovell: Forbes: MLB teams’ worth up 23%
Stormy JE
Posted: March 27, 2013 at 02:58 PM | 57 comment(s)
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1. DL from MN Posted: March 27, 2013 at 04:46 PM (#4397889)And they're screwing their fans by punting on maybe two whole seasons for a lousy 20-30-40 million? I'd be pissed-off.
That's like 1% of what the whole ball of wax is worth!
That's like 1% of what the whole ball of wax is worth!
I'm pissed.
The only justification is if they intend to reset the luxury tax in order to run a $225-250M payroll after 2014.
Why don't we see people quoting this instead of tv ratings when talking about a sports popularity. It's about as accurate in my opinion(which is to say not accurate at all)
Isn't that the current rumor of why they are doing this?
Unclear. There have been noises both ways, but nothing definitive.
Because, based on te numbers given in the quoted section, the national TV deal alone (ie: not including each team's local TV contract) is worth twice as much per season than MLBAM. TV is still were the majority of the money is coming from.
I was thinking that it was because it contradicts the media's assumption that MLB is losing popularity at an alarming rate and that the NFL is 10 times more popular than baseball.
I agree about where the money is coming from, but the fact is that the most popular sport app is MLB's app, not NFL, not NBA or Nascar, but MLB. There are idiots(and yes, I absolutely mean this 100%, they are ####### idiots) who think that tv ratings is the best/only measurement of popularity of a sport. I think my argument about app download is equally as legitimate. (which again, is to say not legitimate at all, as neither argument is founded on anything resembling rationality)
Another place that pays people absolute dogshit.
Welcome to 2013, Anywhere USA.
Welcome to 2013, Anywhere USA.
Yup. Not to go OT, but it's amazing how the middle class is clueless while the elites (of both political parties) plunder the country like Mongol hordes.
Yet another pro-immigration guy who doesn't understand that supply and demand dictates wages.
With free-trade and high immigration, U.S. wages for the bottom 90% (maybe the bottom 99.5%) will be falling for the forseeable future.
Sounds to me like we need to lower our tariffs and taxes so that cheap foreign labor can produce cheap foreign goods.
Things would be a helluvalot cheaper if we didn't insist on being the supreme world power and the government be our lord protector for virtually everything.
I was just trying to point you in the right direction, Lassus.
We don't have tariffs. We're the suckers to the world.
Yes, a lovely society where you can work at WalMart and buy cheap, low quality Chinese goods at WalMart.
Somebody needs to tell the US government we don't have tariffs as they are still collecting tariffs.
For instance we get hit with a shoe tariff that can go as high as 67.5% and I believe a lot of sneakers get hit at 48%.
Yes, a lovely society where you can work at WalMart and buy cheap, low quality Chinese goods at WalMart.
What's the real difference between a "cheap" 5 dollar iron and an expensive 85 dollar one?
If things cost less we'll be able to spend our money on other things which generally in this society translates to tourism and service industry spending as well creating capital to create new businesses and industries.
The potential revenue is quite amazing if you really think about it, especially as people get sick of cable/satellite companies.
Edit: Actually I doubt its even worth $2B. It's probably unsalable as the league would never surrender it's assets to an outside owner without retaining strict controls over its assets and their usage. It's margins all depend on sweetheart deals with the league and owners, so most profits are just a diversion from existing streams.
Another anti-immigration guy who doesn't realize supply and demand are never static.
LOL. Did low-skilled unemployment drop from ~16 percent to ~4 percent while I was having dinner?
More proof of how little you understand about economics.
Question: if I pay an illegal $1400 a month to do Spanish language localization and support for my iPhone apps, and doing so increases my revenues $4,000 per month, did he cost a US citizen a job? Or did he make it more likely I decide to invest further in expanding and create a new job for a US Citizen?
Although I doubt that 1/30th of the subscribers are tuning in to watch the Marlins or Astros, to name the most obvious suspects.
Somebody needs to tell the US government we don't have tariffs as they are still collecting tariffs.
For instance we get hit with a shoe tariff that can go as high as 67.5% and I believe a lot of sneakers get hit at 48%.
We need a Gucci tariff.
Question: Would someone qualified to do localization and support for iPhone apps work for $1400 a month?
Question: Would someone qualified to do localization and support for iPhone apps be so desperate for legitimate work in his home country that he would move here and become "illegal"?
Question: Why would you hire an illegal to do this when you could hire someone legally in a foreign country?
Question: Why would we care about you being such a heroic job creator as to create jobs for $1400 a month anyway, whether for US citizens or not? Those are terrible jobs.
Really? What explains the ~16 percent unemployment among low-skilled workers if demand for such labor is so robust?
After #30, no need piling on with my own response.
It's pretty easy to teach, but the person needs to be a decent English speaker and trustworthy. If you have to check their work constantly, that's not good.
To get out of that hellhole we helped turn Mexico into with our dumb drug laws, sure.
See answer 2.
Because gambling $1,400 a month on the hope I can make $4k a month makes sense, gambling $3k a month does not.
Beyond that, how could it cost more than double to outsource such work south of the border? If you're getting labor for $1,400/mo. in Arizona that would cost $3,000/mo. in Mexico or elsewhere, it sounds like you're exploiting the hell out of your worker(s).
Sounds like someone wants to exploit an illegal alien rather than pay a market wage to a US citizen or alien authorized to work, since many in those groups would also meet the Spanish language requirement suggested in the hypothetical.
Since the job doesn't exist if I have to pay $3k a month, no US worker loses any job to an illegal. I can certainly find better uses for my limited capital than paying someone $3k a month in hopes I might turn a $1k a month profit on their efforts to slowly recoup months of investment over a year or more before I even turn a profit. If i has no better spots to invest in than that low upside all risk gamble, I would save my capital for later, and hopefully much better opportunities.
And since when is it exploiting someone to offer the best paying opportunity they can find?
Because those $1400 a month jobs are great jobs compared to what immigrants usually get or left behind in Mexico and help fund more higher paying jobs for citizens if they help me expand.
I actually started this business with the help of a Mexican immigrant of unclear legality who did basic testing and data entry for me when i had no one else i could afford and trust to do it when in an extreme time crunch. Age was happy to do it, and I was grateful for her help, and without her I might not employ anyone right now or even be in business now.
You just claimed the same labor would cost $3,000/mo. in Mexico or elsewhere [#32], so it remains unclear why working for you for $1,400/mo. is so appealing. Why wouldn't such workers simply go back home and triple or quadruple their money (after adjusting for PPP) rather than live and work as illegal immigrants in the U.S. for little more than a teenager would make at McDonald's?
LOL, I almost flunked out of high school, did flunk out of college, yet have helped write dozens of commercial software products, and have personally raised over $20m in venture capital fir startups I've founded or co-founded. My first two bosses dropped out of college and between them made $50m in several successful businesses.
If an education is a requirement for tech employment I can only say Steve Jobs, Bill Gates, etc a thousand times.
Immigrants can work in a tech business, as I pointed out I've already used them. Not every job requires programming skills, and there are plenty of smart people who haven't had the opportunity for education who can still succeed without it due to their innate drive.
The kind of smarts and drive you need leave your corrupt homeland to bet on yourself in a foreign land where you start with terrible disadvantages.
I never said that, i said it could cost double to hire a US citizen. Are you really advocating I outsource jobs to Mexico? It's cheaper to hire immigrants here, because I can supervise directly and the cost of mistakes can be high, as is travel costs and greater managerial time costs.
Again you can't exploit people you offer the best pay and jobs to. You exploit them by not giving them work visas, since they'd gladly pay taxes for the security of being able to stay here rather than in the middle of a cartel war.
Again no, hiring in a foreign country is difficult, adds substantial costs, and virtually impossible for a small business like mine. Marisa Meyer discovered at Yahoo what we already know, remote workers can't be trusted, and putting in enough managerial controls to get good value out if them costs so much it is self defeating, especially when bringing them into the office to work with the team is automatically more productive, motivating and significantly lower cost to manage.
15% payroll tax on employment, plus 50% tax on invested capital (35% corporate tax on US income + 15% dividend tax + state income tax) might have a wee bit to do with it.
You've "personally raised over $20m in venture capital for startups [you've] founded or co-founded," but you're paying your illegal-immigrant worker(s) less than most teenagers make in a big-city McDonald's?
The hypothetical in #32 involved outsourcing.
... pay them a fraction of what legal workers with the same skills are paid.
Results not typical.
Makes it more likely you and your spouse can buy the half-million dollar home you can suddenly afford a mortgage on.
You know, the one built by a contractor using illegal immigrants paid less than industry standard to construct.
Same goes for income tax - if income tax grows, especially on the lower income groups, then you see a pressure for higher wages or under-the-table payments as people cannot afford as much as they did before.
It has been shown that sales taxes, when applied as universally as possible and with payments to those who are at the lower end of the income scale so as to prevent it from being regressive, are by far the most efficient taxes. Same goes for pollution taxes - such as a carbon tax to help cut greenhouse gas emissions - as both lead to more savings (discourage spending) which helps the economy in the long run. Sadly governments are stuck in the short term (especially in the US with the every 2 year election cycle) which prevents long term thinking and risk taking. Here in Canada we had a GST (goods and services tax) put in place which is a more efficient tax than the one it replaced (a hidden manufacturer tax). We also had metric put into place, a dollar and two dollar coin, and removal of the penny - none of which could be done in the US with the way things are going there as some special interest group would scream too loud and stop it as the politicians would be too close to another election to do something risky.
It reminds me of the housing bubble.
This is happening everywhere; not just in MLB.
CRAP, I just tapped my HELOC for a 4% stake in the Mets.
As you well know, the Yankees need teams like the Marlins & Astros to provide opposition. A schedule calling for 80 games/year versus the Red Sox, 40 games vs the Cubs and 40 games vs the Dodgers would soon become boring, at least to most fans. As long as baseball prevents teams from readily moving from smaller markets to larger ones, and thus being in competition with your beloved Yankees, MLB is right to apportion the media revenue equally among all teams.
I don't think that helps the Ricketts case for getting their variances to install big billboards...
All you well know, every player in a starting lineup needs another player filling in at each and every position for him and his team to have any chance of success. Perhaps we need flat salaries as well to reflect this.
So, why don't you do the right thing and pay a Citizen or legal alien the $2800 per month? You said you're making $4000/mo in marginal revenue. That's a perfectly fair profit margin.
Because those $1400 a month jobs are great jobs compared to what immigrants usually get
$1400/month is less than illegal semi-skilled construction workers get in the Northeast. They make $100-125 a day, 6 days a week, so ~$2500/mo. Cleaning ladies make $12+/hr; again more than you're paying. For ##### sake, if they work a standard 40 hour week, you're not even paying minimum wage.
You're exploiting the #### out of these people. I hope the INS finds out and fines the #### out of you.
I'm sure Forbes is doing a valuation by discounted cash flow, based on current assumptions, and a reasonable cost-of-capital, or a multiple on earnings.
If a buyer thinks they can raise free cash flow/earnings above current trend, they may well pay more. Or, the buyer could have simply overpaid.
I mean, the AOL/Time Warner merger put a price of over $175B on AOL. Do you really think that was a good valuation?
Considering AOL was the "acquiring" company they used their inflated stock price to buy a company with more tangible results. The fact that the public valued AOL at that amount would seem as "valid" as a valuation method found in a finance textbook. My guess is that AOL would no longer exist as a separate entity (they might be a division of some other company) if they did not do that merger.
Ultimately companies and teams are worth whatever another person/company is willing to pay for it. The fact that other journalists and people pass Forbes' valuations as some sort of reference point when it clearly is always wrong annoys me. Its not some subjective criteria they're using.
That's a mistake. You fall pay to the winner's curse. Whoever overvalues the company wins the auction.
Studies have shown that something like 2/3 of M&A transactions destroy value for the acquirer, typically b/c the acquisition premium is too high.
You shouldn't just believe what the current market price tells you about value. We've certainly had enough bubbles in the last 15 years to prove that.
A) Michael Ozanian has been at this a long time, and every now and then windows open up that allow them to check their assumptions
B) Major league baseball isn't a particularly complicated business. I'd be truly surprised if Forbes' estimates of costs and revenues are way off.
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