August 26, 2010

Internal MLB Financial Documents Leaked

Deadspin made an announcement earlier this week:
We've obtained financial statements for a number of baseball teams — containing perhaps some of the most closely guarded information in sports — and they offer a rare glimpse at how MLB franchises do brisk business in the modern era. ...

[T]ake a look at the documents below, paying close attention to the teams' operating income, their revenue-sharing figures, the size of their TV deals, and the amortization of player contracts (a neat trick of accounting pioneered by Bill Veeck that allows an owner to turn his team into a lucrative tax shelter). If there is a thread running through all of these financial statements, it is the incredible ability of baseball teams — whether they're winners or losers, big market or small, "rich" or "poor" — to make their owners a fat pile of money.
There were links to PDFs or Excel files of financial statements from the Pirates, Rays, Marlins, Angels, Mariners, and Rangers (Parts I, II, III). The Pirates' data, leaked to the Associated Press, show that the team has been quite profitable.

The Times reports that an MLB investigation is focusing on insurance companies that do business with various clubs.

Maury Brown has been writing about and analysis the data at Biz of Baseball.

At Fangraphs, he asks: Will Leaked MLB Financials Kill Revenue Sharing?:
[W]hile the leaked documents are an incredible look inside how clubs truly operate, greedily we should demand more. Those at the top of MLB's revenue-making ladder should be placed under the same scrutiny. In a perfect world, the leaker of the MLB club financials would have graced us with the Yankees and Red Sox figures ...

What was often said, but not given hard numbers to back up, has become common knowledge: even those with the lowest player payrolls in baseball, and some with historically terrible records in the standings, are profitable.


Patrick said...

I understand now why terrible GMs are able to keep their jobs for so long.

Michael Holloway said...

This is good.

Now, can the City of Toronto can get back that $500,000,000 that we paid for the Dum; that we then gave to the franschise owners at that time, Labatts, who then sold to Interbrew, who then sold to Coors? ...Well I thought I'd ask.

It's not the money as much as the principal. Major League baseball has been running a shell game with cities that guarantee franchises never pay for their stadium. Public money finances every MLB Stadia built in the last 20 years as far as I know. And these Stadia are the centre piece of the business model - a model that is obviously working REALLY well.

It would be really interesting to see some Expos books as well...

laura k said...

It's not the money as much as the principal.

Is that a pun?

It is most definitely the money. Taxpayer money.

Toronto got screwed, but the city had it good compared to many others. After financing the building of Camden Yards, Baltimore taxpayers guarantee the house. That means the city - the taxpayers - buys all the unsold tickets, so the owners always sell out the house, no matter how bad a team them field. There are many similar examples.

As always, see Neil deMause's Field of Schemes for the 411.

Dave Zirin's new book also sounds very interesting:
Bad Sports: How Owners Are Ruining the Games We Love