MLB's financial records, provided they are accurate, have Tampa Bay in the middle of the pack in key categories. And its future looks good.
© St. Petersburg Times,
published December 7, 2001
The 100 games the Rays lost last season made them one of the two worst teams in the major leagues. But in terms of the money they lost -- somewhere between $4-million and $22.8-million depending on how you figure it -- they haven't done nearly as bad.
The Rays, no matter how you add it, did not have a good year. But in some key financial categories -- including all-important local revenues -- they rank closer to the middle than the bottom of the 30 teams, according to financial documents released Thursday by Major League Baseball officials.
For a team that many have cast in dire financial straits and that some have suggested should be eliminated, the figures -- assuming they are accurate, which is another story -- actually could be considered good news.
And with their payroll headed down and their share of national revenue scheduled to increase, it could be even better over the next few seasons.
Even MLB senior vice president Sandy Alderson, who spent much of the evening commenting on the severity of the game's economic problems, indicated there was some reason for optimism.
"Many of the problems experienced by Tampa Bay have been experienced by other clubs, and (the Rays) are taking steps at the club level and the commissioner is taking steps at the league level to deal with those problems," Alderson said. "I think the commissioner has confidence between the effort of ownership and his own efforts the situation will improve."
Overall, the Rays generated $62.3-million in local revenues, far short of the top-ranked Yankees ($217.8-million), but 21st overall and closer to the average ($94.3-million) than the bottom (Montreal's $9.8-million).
Among teams behind the Rays are the large-market Blue Jays ($54.1-million) and Phillies ($57-million), along with the Reds ($46.5-million) and cross-state Marlins ($36.1-million). The teams apparently targeted for elimination, the Twins ($31.9-million) and Expos, ranked 29th and 30th.
"Local revenues are the measuring stick for contraction," Alderson said. "Local revenues are very important. Clubs have to demonstrate the ability to generate local revenues to at least a minimally acceptable degree to enjoy revenue sharing to provide a reasonably competitive environment."
Baseball released the figures for a congressional hearing Thursday where commissioner Bud Selig painted a grim picture of struggling franchises and red ink.
"Baseball's financial losses and overall economic stability are even bleaker now than they were in the summer of 2000," Selig told the House Judiciary Committee. "Although revenues continue to grow, so do losses."
Selig said five of 30 teams made a profit this year, and two teams must be eliminated. Most believe the Expos and Twins are targeted.
He said owners of financially weak franchises have made progress but that "we believe certain clubs have no prospect of long-term competitiveness on the field or financial viability off the field."
The Rays' biggest shortcoming is at the turnstile where they generated $18.2-million from regular-season game receipts on attendance of 1.3-million. Only the Marlins ($16.8-million), Twins ($17.6-million) and Expos ($6.4-million) generated less.
But in revenue from local media (TV, radio and cable), the Rays took in $15.5-million and ranked 16th, and in other local revenues (such as sponsorships, signs, parking and concessions) the Rays generated $28.6-million and also ranked 16th. At least some of the sponsorships, however, were multiyear agreements that soon will expire.
Apart from their limitations, the Rays (and D'backs) received about $6-million less in national revenue ($18.3-million) than the other teams as part of their expansion agreement. That restriction ends after next season, the same time revenues from the new national television package increase by about $5-million per team, providing the Rays an additional $11-million in national revenue.
What does it all mean?
According to baseball, the Rays lost $22.8-million, the result of $80.6-million in total revenues and $103.4-million in operating expenses. The loss is the sixth largest of the 30 teams, though closer to the average (a $7.7-million loss) than the bottom (Toronto's $52.9-million loss).
Or they lost $17.9-million. That's what you get after taking the $22.8-million loss and factoring in what they received from other teams through the revenue-sharing system ($12.4-million) and what they paid in interest on debt from franchise acquisition and stadium renovation ($7.5-million).
Or they lost about $4-million, at least on a cash basis. That's what you get after factoring in the $14-million in player salary that was deferred; the MLB documents, listing the Rays with $57-million in player payroll and benefits, don't appear to account for that.
In any case, that financial picture of the team seems better than many observers expected, which likely pleased team officials. They were not allowed to say so, however, because MLB refused to allow team officials to talk to the media, insisting all comments come from MLB executives.
Donald Fehr, head of the players union, was not at the hearing but said baseball presented incomplete financial information to Congress though terms of the collective-bargaining agreement prevent him from commenting on specifics.
"In order to understand the claims made by the owners and properly evaluate them, you need vastly more information than the owners have been willing to share and you need to do a critical analysis," Fehr said.
At the hearing, Minnesota Gov. Jesse Ventura seemed to represent the fans.
He complained the teams were abusing their special legal status to force eager cities to build expensive stadiums.
"Major League Baseball is really no different than OPEC," Ventura said. "It controls supply and it controls price with absolutely no accountability."
There was a lot of saber-rattling at the hearing, as members of the committee suggested it might be necessary to repeal the sport's unique exemption from antitrust laws, which was granted by the U.S. Supreme Court in 1922.
Selig was the target of many barbs from members of the committee, who complained about costly stadium deals and overpaid players.
Ventura, the former pro wrestler, played the role of the populist. He said baseball could learn a thing or two from the World Wrestling Federation, which does not need to build new stadiums to make a profit.
He noted that no other sport has the same protection as baseball. "Why baseball and not football? Why baseball and not basketball? This is crazy."
He said owners were obsessed with building new stadiums.
"If we build a new stadium (in Minneapolis), they will come back in six or eight years and tell us they need a new one," Ventura said.
Asked by Rep. Robert Wexler, D-Boca Raton, about the prospects for the Florida Marlins, Selig declined to give specifics other than to say the team needs a new stadium. When Wexler pressed him to rate the commitment to the Marlins, Selig replied, "The Marlins are in South Florida and let's leave it at that."
At a news conference after the hearing, Selig declined to answer questions about the Rays or any other franchise.
He said, "We have a lot of problems to work our way through."
But Selig also left open the possibility of allowing teams to relocate, which baseball has opposed for three decades.
"We have looked at the possibility of relocation and have not ruled it out in the near future," Selig told the committee. "It is not, however, an immediate answer to the problems we are trying to solve."
During the testimony, Twins president Jerry Bell said Alabama businessman Donald Watkins is allowed to pursue purchasing the Twins while also considering whether to make an offer for the Rays.