Forbes: Jays losing a bundle?

[dagger]

I take this with a grain of salt because we don't know what the Jays get from the mothership for the media rights, and the likelihood - expressed by a couple of analysts - is that it undervalues those rights and hence detracts from the Jays revenue stream.

In any case, here is the Forbes analysis of all 30 teams.

http://www.forbes.com/mlb-valuations/li ... esc_search:

[rarefind]

I will never trust the money trail reported by the Blue Jays while Rogers owns the team, stadium and media outlets. There is a recent boom in the value of live sports from an ad revenue perspective and I think we would be quite naive to believe that Rogers is not profiteering from that significantly. Now the American media rights scope is dramatically different to the state of affairs in Canada, it is safe to assume that if teams can make money off TV rights to a buyer that is using them for local/state broadcasts only - Rogers having the whole of Canada should catch them up quite nicely. The Rangers nice 3 billion dollar of 20 years isn't a terrible barometer to apply here. Despite Baseball being more entrenched Texas, Canada has a larger population to that particular state by 10m. So while I doubt the valuation of the Jays "rights" over the next 20 years would be comparable I wouldn't believe that it would have Rogers moving into the poorhouse anytime soon. It is a little different when money is actually changing hands between ownerships (ex. FOX and the Texas Rangers) as opposed to staying in house completely and how numbers have to be reported.

Rogers can use Blue Jays content to sell magazines, drive viewership to their SN website, cross platform promotion (mobile, web, etc.) and of course the games themselves with broadcasts, in stadium advertising and concessions. Correct me if I am wrong, but undervaluing the incoming revenue saves Rogers in potential revenue sharing. That's why this cross platform ownership structure is so lucrative to them. Furthermore, if the Jays are indeed not making money - heads would be rolling down Blue Jays Way and out the door of the Rogers' executive offices. I'd trust Guy Laurence a little bit more than that to be honest.

Sorry didn't proofread, busy day at work but had to rant.

[duppyy]

Rogers always playing the Victim. It's pathetic.

[Schad]

Wouldn't surprise me if the Jays were losing money, even taking into account the media rights. Now, that doesn't exactly take Rogers off the hook...if you have an unfavourable financial situation borne by a half-empty stadium and the Canadian dollar, you should either be operating like the Rays, or you should be spending whatever figure you feel is necessary to really kick-start revenue; that means a budget of "until we're confident that the team is very competitive", whether that's $110m or $150m. They've instead spent a lot while refusing to spend a little extra to round out the team in two consecutive years, and that's profoundly bad business, but profoundly bad business appears to be Rogers' specialty.

[Randle McMurphy]

The Jays are "losing" money, eh? Guess that means Sportsnet is profiting instead.

[rarefind]

Exactly, saying the Blue Jays are losing money is a different statement altogether than saying Rogers is losing money by operating the Blue Jays.

[Skin Blues]

Wouldn't surprise me if the Jays were losing money, even taking into account the media rights. Now, that doesn't exactly take Rogers off the hook...if you have an unfavourable financial situation borne by a half-empty stadium and the Canadian dollar, you should either be operating like the Rays, or you should be spending whatever figure you feel is necessary to really kick-start revenue; that means a budget of "until we're confident that the team is very competitive", whether that's $110m or $150m. They've instead spent a lot while refusing to spend a little extra to round out the team in two consecutive years, and that's profoundly bad business, but profoundly bad business appears to be Rogers' specialty.

The half-empty stadium is still league average in terms of attendance. They make a ton on cable packages all across Canada. They're clearly not losing money.

It's kinda funny how common knowledge it's become that they're manipulating the accounting in order to under report their revenue. They've been paying $12M/year in TV revenue sharing, compared to $50M for the Rangers, $50M for the Angels, $130M for the Yankees, $42M for the Padres... you get the idea. Realistically this book-cooking is saving them $30M+/year. Do we know what the new media deal is worth? I believe the previous one expired after the 2014 season.

[Schad]

The only reason I'm willing to accept that they're losing money is that the Rogers Corporation has demonstrated in recent years that they could **** up a single-vehicle accident, and the panicky shutting off of the money spigot (even when leaving it partially open was better business sense) suggests that they weren't reaping the rewards of their decisions.

As for some of those other deals, they're money-losers for the rights-holders...they may be manipulating the numbers, but the point at which those deals are actually profitable is well below what is being paid.

[Skin Blues]

Well, that's what cable companies are willing to pay for them, so that's what they're worth. I'm not sure how they monetize is to recoup their investment, but they must be doing it somehow. It could be that they realize there will be no way to sell a cable package at all 5 or 10 years from now without a major draw such as exclusive rights to a sports team's games, and the opportunity cost of NOT forking out major cash is that you lose 75% of your subscribers.

So... I suppose it's theoretically possible they could be losing money, but just because you use a buy-one-get-one-free coupon on a coffee mug rather than a Ferrari doesn't change the value of the coupon, haha. And to be honest I don't believe Rogers is that stupid that they can't make money with the amount of power they have. The CRTC may eventually drive them to unprofitability, but I really doubt we're close to that point yet.

[Schad]

Well, that's what cable companies are willing to pay for them, so that's what they're worth. I'm not sure how they monetize is to recoup their investment, but they must be doing it somehow. It could be that they realize there will be no way to sell a cable package at all 5 or 10 years from now without a major draw such as exclusive rights to a sports team's games, and the opportunity cost of NOT forking out major cash is that you lose 75% of your subscribers.

For many of the regional sports networks, they have the rights to the local teams, or they don't have any leverage whatsoever with the big cable companies on carriage fees. That's their 'in'...the RSNs carrying some of the smaller teams are paying big money for rights and getting next to no viewers, but if they were to lose the rights, they won't get carried, period.

[Lateral Quicks]

This report indicates the value of the team roughly quadrupled since Rogers bought it. For ~15 years of ownership that's not a bad return at all. Obviously that doesn't take into account earnings/losses over that time, but I'd very surprised if that amounted to a net loss.

I'm skeptical the Jays will be losing money going forward. Between the MLB central fund which is getting a per-team increase of $25M a year, revenue sharing, luxury tax disbursements, and the fair value of the domestic TV contract estimated at $50-60M per year, they're paying a big chunk of their expenses before we even start talking about gate receipts. Assuming those are conservatively clearing $50M per, it's a challenge to see how they're losing a lot of money. I could see a small loss, especially if the Canadian dollar stays where it is or continues to tank, but a lot? I'm not seeing it.

[Korr]

Aren't salaries in USD? With the weakening CAD they're paying their players 10-20% more this year compared to last year when the loonie was around 90-95c USD.