Yankees lost money
DMZ · December 6, 2005 at 9:38 am · Filed Under General baseball
In possibly the funniest story so far this off-season, the Yankees are pushing a story that they lost money last season. It has to be true. Why would they lie? Sadly, they’re even getting people to bite on this hook and then write about it.
Comments
34 Responses to “Yankees lost money”
Ahhh…poor New York. Maybe we should just give them a huge tax break.
I lost money last year. Can I get a cheap 50-year lease on some $30m penthouse suite in downtown Seattle? Because that would be nice.
Let’s see, 4 million attendance at $50 a head…that’s 200 million in revenue. (Might be a little inflated, but I don’t think so).
That’s BEFORE you get to any TV deals.
Can I get a cheap 50-year lease on some $30m penthouse suite in downtown Seattle?
No, Derek, but I can offer you a cheap 50-year lease on a $30m mansion in Cody, Wyoming. It hasn’t been built yet, but the city council is willing to commit to paying for it because they’re convinced it will do wonders for the local economy if you promise to move your family out there.
Actually, I take that back- the average ticket price at Yankee Stadium is GREATER than $50.
http://newyork.yankees.mlb.com/NASApp/mlb/nyy/ballpark/seating_pricing.jsp
So, uh, yeah, call it somewhere above $300 million in ticket+concession revenue by itself.
Is there some sort of rule that says journalists aren’t allowed to do math?
The reporting of the type above makes Finnigan look like a young, talented Mike Wallace.
DMZ –
You’re going about it all wrong. It’s not “I lost money, can I have a cheap 50-year lease on a penthouse?” It’s “I lost money, and now the taxpayers of King County must buy me a $30 million penthouse in downtown Seattle, pay all the property taxes for me for 30 years, and pay for renovations every five years”.
If only their player acquisition was as creative as their accounting . . .
I was wondering when someone was going to pick up on this story and question its validity. Baseball Prospectus has been glaringly inadequate in their analysis of baseball financials ever since their best writer passed away. I can’t remember his name. ugh…
I’m suprised it took you guys this long to put up a post on it.
You’re thinking of the late Doug Pappas.
This is yet another example of the well known theorem that:
New York Daily News + Yankees Source + Complicated Corporate Accounting = total garbage
[long unreadable, addressed elsewhere in thread]
Is this story going to have any serious resonance? I can’t imagine that intelligent people will take the Yankees’ claims at face value.
I’m waiting patiently for George Steinbreener’s announcement that the Yankees’ payroll next year will be $32 million. Jeter, A-Rod, Sheffield, Matsui, Rivera … everybody must go! For a limited time only, we’re offering 90 days same as cash on any brand-name player in our inventory! Buy one overpriced infielder, get a second one for half price! Zero-down financing through the end of the year! Push, pull or drag our injured starters … we’ll provide free delivery!
His prices are insane!!!
Seriously, what would George do if NYC didn’t foot the bill on the new stadium? Move the Yankees out of the biggest market in the country? RIIIIIIIIIIIIIIIIIIGHT.
Whatever, George.
Zero interest loans, plus pay nothing until July!
Makes a great gift!
I wonder if this will inspire Finnigan to write a “M’s lose more money than the Yankees” piece just to reassume fans that the M’s REALLY REALLY don’t have as much money as everyone thinks. I’m sure Finny’s waiting to receive his talking points from Lincoln right now.
It’s… It’s… HUUUUGGGGGGEEEEEEEE!!!!!!! (anyone else in upstate NY?)
[Everett post coming]
The funniest thing about this is that the supposed straw breaking this camel’s back is “underpayments” to the YES network. But the Yankees are the principal owners of YES (that’s what the Y in YES stands for) so they’re crying poverty because they didn’t pay themselves enough money. (Hiding team profits inside media assets is one of the oldest tricks in the baseball owner’s handbook, which is why the Mets are starting their own little network — and also why they suddenly are acting like they have more money than they ever had before.)
Did Forbes really report that the Yankees lost $37 million in 2004? The writers and editors at Forbes magazine may actually have some finance knowledge. If so perhaps there really is something to this.
Alternate Headline: “Steinbrenner loses $50M, finds it in his other pocket.”
I’m the Yankees! I take in $100 million in television contracts. Now I have to share $30m with other teams! Boy, that sucks.
I’m going to start my own network! Yay!
Now I get the network to pay me $0 for the contract! Oh noes!! I am $100m poorer! Also, those other teams don’t get any of that sweet, sweet revenue-sharing!
Maybe this is another way for the Yankees to say their fans: “Sorry, we’re not going to sign any big name this off season.”
Seeing Mr. Zumsteg use ‘Oh noes!’ on this thread just made my day.
Maybe the Yankees can get back in the black the way other teams do: by trading off some of that high priced talent.
This report started with Mike Lupica. If you’re familiar with Lupica,
you’d know that George couldn’t get him to do anything. Lupica is not
a fan of the Yankees. The easiest way to avoid looking at one’s own
problems is to focus on someone else. But, your problems won’t get any
better.
#22, sounds like a The Onion headline if I ever heard one.
Susan
I am not clear what you mean by “your own problems won’t get any better”.
Whom do you mean by “you”. The Mariners? Steinbrenner?
Re: #28
I love it when people act like they don’t know what something means in an attempt to make the speaker/writer feel stupid. Take a look at what Susan wrote, Colm, and tell me you can’t figure out that it should be read as “one’s problems won’t get any better.” I’m not a fan of bad writing either, for what it’s worth.
#5- The Yankees’ average ticket price in 2005 was $27.34 (according to this article, sans HTML goodness: http://portal.tds.net/news.php?story=66498)
I’m pretty sure the link you have lists the prices for 2006, and we also must take into account that about 60% of the seats in Yankee Stadium are in the upper deck. Most of those sell for $19. Plus they have several thousand bleacher seats for $10. If we figure $30 * 4 million tickets, that’s $120 million in gate receipts for 2005.
For television, YES pays the Yankees $60 million per year, and I think their radio deal is $10 million per. The Yankees own–I think–60% of YES, so any profit the network makes doesn’t go entirely to the Yankees. If I’m right on the 60% figure, that means they would sort of be better off not hiding money in YES, since MLB’s 34% revenue sharing would leave them with 66% of the money. But that’s for people who know a lot more than me to examine.
Given their absolutely insane payroll, luxury tax bill and revenue sharing, I could actually buy that the Yankees lost money in 2005. Not $85 million, but a smaller loss isn’t unrealistic.
#30- Even if your figuring is correct, it’s still probably their preference to make a few less dollars and hand out less money to poorer teams.
Rich people HATE leveling the playing field. That’s why we have sales tax/no estate tax/republicans.
“Is there some sort of rule that says journalists aren’t allowed to do math?”
They aren’t allowed to use Google, either.
And #31, the gratutitous political commentary doesn’t add anything. Really. I come here for baseball news, and leave the politics elsewhere. I like the refuge.
I can’t fathom how the Team Marketing Report has the Yankees average ticket price at $27 last year. While 60% of the Stadium may be in the upper deck, only the very upper part of that sells for $19. It’s maybe 10% of the stadium seats at most. The rest of the upper deck sells for over $40 (last year it might have been $35 for the upper tier reserved, in the outfield only). The bleacher seats are only about 10% of total seats as well. And these cheap seats are the very last of those that are sold.
I’d say the average sold ticket had to be closer to $40. That’s $160M + parking + concessions = well over $250M. The YES payments to the Yankees at $60M is clearly low, but even given that, the radio deal is about $15M and the over-the air TV deal (for 30 games) is over $10M. Then there’s the Yankees share in national TV revenue, radio and Internet, and playoff revenue (which this year wasn’t that high). Plus, promotional deals with advertisers all over Yankee Stadium and affiliated with the team. And merchandising, and Team Store sales. And that’s not even counting the Yankees share in YES profits. I don’t have the numbers for any of these additional revenue streams, but we were already at $335M before them. Is another $100M too low?
Team salaries and tax payments were $310M. Revenue is conservatively estimated at $435M. Unless running the Yankees costs $125M a year (and if so, George must be making a HUGE “salary”), there’s no way they are losing money.
from Jim Littke: “According to the New York Daily News, the Evil Empire lost between $50 million and $85 million last season, no small feat for a team drawing four million fans and raking in more than $300 million. But hand over $200 million-plus to meet payroll obligations, fork over another $110 million in luxury tax and revenue sharing payments, then picture the scene at Yankee Stadium next spring as The Boss wanders the concourse and lectures pretzel vendors, “Whoa there! Easy on the mustard.””