Payroll Question - Brewers/Nats

[MickeyDavis]

As far as I know the biggest discrepancy in MLB revenue per team is the local TV deals. I know there are other marketing deals where larger market teams get more but TV money difference is large. The Dodgers receive over $200 million per year with their latest deal. The Brewers make about $24 million a year with their deal that expires in 2019.

Attanasio has said that the Brewers max payroll will be in the $100-$110 million range. This year they were much lower of course. But this is my question, the Nationals payroll this year is about $189 million. http://www.spotrac.com/mlb/payroll/ Their TV revenue is about $46 million, about $22 million more than the Brewers. The Brewers had HIGHER attendance this year than the Nats.

How can the Nats afford a $189 million payroll? Is their owner eating the losses? Do they have another large source of revenue?

[coolhandluke121]

That's a good question. Appreciation in value is probably a factor. I'm not sure of the Nats' situation with regard to assets though. Do they own their stadium? Is their value rising faster than the Brewers'? If their value is significantly greater than the Brewers', even an equal appreciation rate leads to a lot more potential profit. I'm guessing it has something to do with appreciation in value of sports teams, which I've read is a bigger factor than most fans realize in terms of how much a team can spend.

I do think Mark A should be willing to spend more than $100m a few times. I know the savings in a year like this aren't one-for-one in terms of extra money you can spend in future years (accounting is never that simple, what with taxes and deductible expenses and revenue sharing etc), but it should be a big factor. I didn't like how they consistently spent their whole budget every year. They should continue to plan for alternating cycles of young, cheap teams like this and go big when they have a legit chance to contend. Instead of signing a Suppan, Lohse, Garza, or Wolf nearly every year, aim for a guy like Greinke or Scherzer once every 3-4 years.

[MickeyDavis]

The Lerner family is loaded so maybe that's the difference.

Attanasios group bought the Brewers in 2005 for about $225 million. Lerner bought the Nats a year later for $450 million.

Forbes lists the Nats will a value of $1.2 billion, revenue of $304 million and operating income of $37.6 million. The Brewers are valuated at $925 million, revenue of $238 million and operating income of $58.2 million. That profit is higher than most teams.

[Kerb Hohl]

I believe to get the Nats to DC, the owner had to basically strike a deal that had him by the balls from the Baltimore owner. He forks over a decent chunk of TV revenue to Baltimore since they came in and "split the market." Not sure if that's still going on or not, but I know it was.

[MickeyDavis]

You're right, the Orioles actually control the Nats TV broadcasts

https://www.fangraphs.com/blogs/tv-dispute-might-be-hurting-nationals-in-free-agency/

[sdn40]

Maybe we need a referendum for taxpayers to take on all player salaries. We already pay for the stadiums. Let's have a bake sale to raise money for uniforms. Owners shouldn't be burdened with such petty things as out of pocket expenses

The Yankees deal is 1.5 billion with a B. The revenue should be shared equally. Ridiculously slanted unfair advantage that the big city owners won't likely concede anytime soon. As far as the Nats owner eating the losses, no such thing. The books may say one thing, but I'll never believe for a second that any owner loses money.

[wichmae]

The Nats are a very curious case because they dont see any of the TV money. Its basically why they'll never be able to realistically keep Bryce. Looking at the pure numbers I have no idea how that team isnt bleeding cash but they arent.

Some of the losses are made up through revenue sharing and those numbers are private (though I imagine a leak of them is ver possible like the NBA)

● Every team in the majors pays in 31% of their net local revenue, and then that money is divided up and equally distributed to every team. Since large-market teams will have much greater local revenues than small market teams, this already puts small market teams in the black.

● On top of this, a large chunk of MLB’s central fund (which are acquired through things like national broadcasts) is set aside to be allocated to teams based on their revenues.

● By 2016, the fifteen teams in the largest markets in baseball will be disqualified from receiving revenue sharing. This feature is being phased in over the coming years. The disqualified clubs will receive a refund for the amount that they would have received in revenue sharing, although teams that have exceeded the Luxury Tax threshold in recent years will not receive a full refund. (MLB.com)

[MickeyDavis]

It will be interesting to see how much Harper gets.

[El Duderino]

That's a good question. Appreciation in value is probably a factor. I'm not sure of the Nats' situation with regard to assets though. Do they own their stadium? Is their value rising faster than the Brewers'? If their value is significantly greater than the Brewers', even an equal appreciation rate leads to a lot more potential profit. I'm guessing it has something to do with appreciation in value of sports teams, which I've read is a bigger factor than most fans realize in terms of how much a team can spend.

I do think Mark A should be willing to spend more than $100m a few times. I know the savings in a year like this aren't one-for-one in terms of extra money you can spend in future years (accounting is never that simple, what with taxes and deductible expenses and revenue sharing etc), but it should be a big factor. I didn't like how they consistently spent their whole budget every year. They should continue to plan for alternating cycles of young, cheap teams like this and go big when they have a legit chance to contend. Instead of signing a Suppan, Lohse, Garza, or Wolf nearly every year, aim for a guy like Greinke or Scherzer once every 3-4 years.

Attanasio has made a ton of money off buying the Brewers and a year like this season a huge windfall. With the team having so many prospects which will be dirt cheap for years, i think we'll see more seasons where he rakes in big cash.

Keep in mind the Brewers also get revenue sharing millions which the Nationals don't and with exploding values for pro sports franchises, the Brewers have to be at the very least worth double what Attanasio paid for the franchise. If hypothetically he put the Brewers up for sale right now, i can't see him getting less than around 800 million and that figure might be light.

I'm not saying that means Attanasio should get silly in free agency, but if he were to ever act like carrying a payroll over that 100-110 million range would be killing his pockets or that he's doing some big favor by doing so, it's not true.

[El Duderino]

The Nats are a very curious case because they dont see any of the TV money. Its basically why they'll never be able to realistically keep Bryce. Looking at the pure numbers I have no idea how that team isnt bleeding cash but they arent.

Harper will get silly money, but keeping him i'd guess adds value to the franchise more than if he left for another team.

Boras is his agent though, so maybe the contract would be so big that his value as an asset could be trumped by the size of the contract. I'd assume Harper gets 40 million a year at minimum over 10 years given his age and immense talent/production, along with opt outs.

[wichmae]

In general using the term payroll gets tricky. If he's talking 100-110 for his 25 man roster then I get saying that out load. Basically if he only adds 30 mil we still arent even at league average.

http://www.spotrac.com/mlb/payroll/

[Kerb Hohl]

In general using the term payroll gets tricky. If he's talking 100-110 for his 25 man roster then I get saying that out load. Basically if he only adds 30 mil we still arent even at league average.

http://www.spotrac.com/mlb/payroll/

Yeah, we're talking 25-man. He hit $105 in 2015 and it was inching up every year. Obviously the rebuild sent it way back down.

[neiLz]

Antanasio is just a cheap owner. every time he talks about payroll it's painful to listen to. Always talking about the red. Needs to get a grip. he's a billionaire.

[jakecronus8]

The Nats are a very curious case because they dont see any of the TV money. Its basically why they'll never be able to realistically keep Bryce. Looking at the pure numbers I have no idea how that team isnt bleeding cash but they arent.

Harper will get silly money, but keeping him i'd guess adds value to the franchise more than if he left for another team.

Boras is his agent though, so maybe the contract would be so big that his value as an asset could be trumped by the size of the contract. I'd assume Harper gets 40 million a year at minimum over 10 years given his age and immense talent/production, along with opt outs.

Lame that the Yankees are going to get Harper

[sdn40]

Say what you want about Selig but he got the Brewers the hell out of that division. Best thing he did

[MickeyDavis]

Antanasio is just a cheap owner. every time he talks about payroll it's painful to listen to. Always talking about the red. Needs to get a grip. he's a billionaire.

Actually he's not. He's the principal owner but has a large ownership group. With the Bucks any of LED could have purchased the Bucks outright. Not so with Attanasio. He's made it clear that the owners/investors want to make a profit every year.

[Thunder Muscle]

It will be interesting to see how much Harper gets.

It's going to be just a gross amount. Wasn't 750M being tossed around?

[neiLz]

Antanasio is just a cheap owner. every time he talks about payroll it's painful to listen to. Always talking about the red. Needs to get a grip. he's a billionaire.

Actually he's not. He's the principal owner but has a large ownership group. With the Bucks any of LED could have purchased the Bucks outright. Not so with Attanasio. He's made it clear that the owners/investors want to make a profit every year.

I'm sorry but I'd rather have an owner willing to spend than make a profit. If he's crying about making money he shouldn't have bought a team. He was willing to waste money on lohse. He should never complain about the bottom line.

[MickeyDavis]

That's why Kohl was great in that regard. He was willing to spend money and take a loss every year knowing he'd cash in when he sold (of course the money was mostly spent poorly). The current Brewers owners will also make a killing when they sell.