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Thread: The Reds 2003 Revenue and Expenses

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  1. #1
    Administrator Boss-Hog's Avatar
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    Same here. Nice work, Redsland.

    Originally posted by cincinnati chili
    I just want to say that while I second some of the critiques (esp. the player development number), this must have taken a lot of work, and I appreciate it.

  2. #2
    Hey Cubs Fans RFS62's Avatar
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    Boy, what an exceptional thread. Thanks a lot to all who researched and contributed to this.

    I hope we can come to some final numbers everyone can agree on and archive this.
    "Twenty years from now you will be more disappointed by the things that you didn't do than by the ones you did do. So throw off the bowlines. Sail away from safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover."
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  3. #3
    Member CougarQuest's Avatar
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    Originally posted by 4256 Hits
    I believe that WLW pays them but they are hired w/ the approval of the Reds.
    I think the Reds pay Marty and Joe. If I remember correctly, Marty and Joe were under gag orders from the Reds about mentioning certain things a couple of years ago. And they made it clear that that the order was from the Reds. Marty also has made comments that he will say things about the Reds players if they are playing poorly, regardless of how the Reds feel about it, because they didn't hire him to be the cheerleader. The Reds are looking for Joe's replacement, not WLW. John Allen has said that he has worked out agreements with Joe over this year, not WLW. Aren't they working under something like the Cincinnati Reds Baseball Radio Broadcast?
    Artificial intelligence is no match for natural stupidity.

  4. #4
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    After reading this thread, I got to thinking that maybe the reason why the Reds are cutting the payroll 10-12 million next season is because they are directing that money to the scouting and player development departments. The Reds added the likes of Terry Reynolds, Bill Wood, Ron Oester, Dean Taylor and seven new scouts. Other than Al Goldis, did anyone else leave the Reds organization since Bowden was fired? If not, you have to pay the salaries and benefits for these individuals, and one way could be is cutting the major league payroll and directing it to the farm system.
    If you think small, you'll go nowhere in life.

  5. #5
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    Man, you guys are amazing.
    If you think small, you'll go nowhere in life.

  6. #6
    Member 15fan's Avatar
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    Originally posted by JaxRed
    The player payroll number will be low for 2 reasons. I don't have a link handy but all teams have to pay about a 6 million dollar charge for something as part of payroll.

    And you have no allowance there for benefits, etc. For example the Reds pay Social Security on all these guys.

    And yes, I think you'll find your 13 million figure will be WAY low.
    Not just Social Security. Factor in things like medical, dental, life and disability insurance. Furthermore, any smart organization is going to have costs such as workers' comp insurance, tort claims liability insurance, fidelity bonding, etc.

    And to answer the specific question about rates and limits for Social Security withholdings, I'd refer everyone to page 15 of IRS Circular E, Publication 15:

    http://www.irs.gov/pub/irs-pdf/p15.pdf

    Employers pay 6.2% and employees pay an additional 6.2% for Social Security in 2003. The income cap was $87,000.

    The Medicare rate is employers 1.45% and employees pay another 1.45%. Note that there is NO INCOME CAP on Medicare. Therefore, if you go with the calculations / estimate that the player payroll was $55,000,000, then the Reds paid almost $800,000 in Medicare payments alone in 2003 on the player payroll portion of the expense ledger.

    Fringes are a huge cost to an employer.

    If you want to know why jobs are moving to other nations, it's not just the hourly wages that must be paid - it's also the taxes & benefit costs associated with employing someone in the US of A...

  7. #7
    Rally Onion! Chip R's Avatar
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    Here's an article I found about back rent on Cinergy and the rent on GAB

    http://reds.enquirer.com/2000/01/13/...reds_park.html
    The Rally Onion wants 150 fans before Opening Day.

    http://www.facebook.com/pages/Rally-...24872650873160

  8. #8
    Rally Onion! Chip R's Avatar
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    I think a couple of things that we need to take into account is player depreciation and depreciation on anything the team owns. I know people believe these are accounting tricks to increase expenses but it is a legitimate expense and I'm sure the Reds claim it as such. Another expense that is a big unknown is if the Reds pay the owners any salary or if they receive dividends from any profits the Reds make.
    The Rally Onion wants 150 fans before Opening Day.

    http://www.facebook.com/pages/Rally-...24872650873160

  9. #9
    Rally Onion! Chip R's Avatar
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    Originally posted by JaxRed
    I disagree Chip. Yes there is depreciation. Yes we could amortize some items. But unless I miss the point of Redsland and most people, they want to know if the Reds have a positive or a negative cash flow.
    That may be Redsland's intention but people are going to see his post and this thread and say that the Reds are taking in more cash than they are paying out. Therefore the Reds are making gobs of money and are a bunch of lying scoundrels that are cheating the fans out of a higher payroll. Don't get me wrong, I think what Redsland is doing is very informative and he went to a lot of hard work to find all those numbers and the numbers seem to be legit. But expenses are expenses whether they be payroll, stadium or depreciation and you can bet your bottom dollar that the Reds count them as such.
    The Rally Onion wants 150 fans before Opening Day.

    http://www.facebook.com/pages/Rally-...24872650873160

  10. #10
    You know his story Redsland's Avatar
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    The Reds 2003 Revenue and Expenses

    A few days ago Krusty asked about GAB revenues. Itís a subject we all discuss from time to time, and one that I know is dear to REDREAD, myself, and others. Unfortunately, these discussion usually suffer from lack of hard data.

    So, I decided to try to make a definitive list of all of the Redsí sources of revenue. Then I attempted to find out exactly how much revenue was derived from each source. With some effort, I was able to find good numbers for all but two of the sources, which I have good estimates for.

    Then I did the same for expenses. Iíve linked to all of my references, when possible, and explained my system when this was not possible.

    So here, then, is my attempt to settle the question of how much the Reds made in 2003.
    Code:
    2003 LOCAL REVENUE SOURCES
    Ticket Sales	$17.53	x	2,355,259		=$41,287,690
    Parking		$8	x	576	x	81	=$373,248
    Concessions*						=$16,486,813*
    Local Cable						=$5,000,000
    Local Radio						=$5,400,000
    Stadium Naming						=$2,500,000
    Founders Suites	8	x	$120,000		=$960,000
    Zone 2 Suites	26	x	$85,000			=$2,210,000
    Zone 3 Suites	23	x	$50,000			=$1,150,000
    Riverfront Club Memberships**	500	x	$500	=$250,000**
    Scorecards	$1	x	10% of attendance	=$235,526
    Scoreboard Messages	30	x	$35	x81	=$85,050
    In-Stadium Advertising***				=$8,000,000***
    Spring Training Income					=$1,000,000
    
    2003 NATIONAL REVENUE SOURCES
    National TV						=$13,333,333
    Revenue Sharing						=$15,800,000
    MLB Properties Sharing					=$4,600,000
    
    2003 GROSS REVENUE
    							$118,671,660
    
    2003 EXPENSES
    Administration, Operations, Player Development#			=$13,000,000#
    Ballpark Maintenance						=$9,000,000
    Ballpark Rent							=$2,500,000
    Marketing							=$3,000,000
    Merchandise Costs						=$3,000,000
    Player Payroll							=$63,062,016
    
    2003 EXPENSES
    								$93,562,016
    
    2003 REVENUE MINUS EXPENSES
    									25,109,644
    * Neither the Reds nor their concessionaire, Sportservice, reveals concession figures. However, under their old lease, the team was required to pay the county 10% of the gross from concession sales. The 1998 payment indicated concession sales of $11,000,000. This works out to $6.13 in concession sales for each of the 1,793,649 men, women, and children through the gate that year. Inflation adjustments take that $6.13 to $7.00 per person for 2003. I have ignored other factors, like the greater availability of expensive liquors, wines, and foods in GAB, and the expensive catering options available, making this estimate a lowball one.

    ** Iím sure GAC said his connection paid $500 for a membership to the Riverfront Club, but I canít find that post in our archives.

    *** For obvious reasons, it is very difficult to find information about in-stadium advertising revenue. However, we do know that the team sold out all of its advertising space. And we also know from a suit against the Mets that they underreported their advertising revenue by $13.5 million, which suggests that this figure, combined with whatever amount was reported, would give the Mets something like $15-20 million here. Finally, the Cleveland Indians made $8.8 million on signs and ads in 1997. Since the Metsí number doesnít tell us much, and since Cleveland is a Midwestern city with a new park (sort of), I used their number, but depressed it somewhat. Yes, their number is six years old, but Cleveland is a bigger market, their team was more successful at the time, and the economy was booming. By contrast, John Allen says he may have underpriced GAB advertising. Hence my conservative number of $8 million.

    # I heard this number a few months ago and etched it in my brain. Having previously never heard how much the team spends on the FO, minors, etc. I found this piece of data interesting. But now I canít find a cite. The Brewers claim to spend about $30 million here, FWIW.
    Last edited by Redsland; 01-28-2004 at 04:32 PM.
    Makes all the routine posts.

  11. #11
    You know his story Redsland's Avatar
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    Thanks!

    And now the links even work!
    Makes all the routine posts.

  12. #12
    You know his story Redsland's Avatar
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    Originally posted by TeamDunn
    Are souvenirs and the Reds gift shop included in this?

    The actual Shop in the Westin, is that *owned* by the Reds?
    Yes. All MLB merchandise sales go into a pool that is shared equally by all teams. According the Brewers' disclosures, they got $4.6MM for 2003, which means that's what all the teams got. Assuming you believe the Brewers on matters of income.
    Makes all the routine posts.

  13. #13
    You know his story Redsland's Avatar
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    Originally posted by red-in-la
    Where does the salaries of non-players come in? Who pays Marty and Joe? They manager and coaches take in some coin as well as our illustrious President and GM and their staffs.

    Then there are travel costs and equipment as well as some rather large doctor bills.
    Marty and Joe are paid by WLW.

    Non-player salaries are paid out of the baseball operations, administrative, and player development budgets as appropriate. Healthcare, travel, catering, lodging, uniforms, equipment, the drafts, minor league operations, front office staff, RedsFest, spring training, etc. all come out of this pool.

    I'd break it all down as thoroughly as I have the revenues, but there's very little data out there to go by.
    Makes all the routine posts.

  14. #14
    You know his story Redsland's Avatar
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    Originally posted by Redmachine2003
    The Player payroll of 55,509,745 this doesn't reflect the salary dump at the end of the year or the cash receive in the trades does it?
    This is the amount actually paid by the team for 2003, according to Jax's shiny new site.
    Makes all the routine posts.

  15. #15
    You know his story Redsland's Avatar
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    Originally posted by JaxRed
    You gave all the concession revenue to Reds. Only place I saw that had figures

    http://cincinnati.bizjournals.com/ci...16/story7.html

    showed that Reds got 30% of concession revenue which would be $4,946,043.90

    so subtract 11 million from revenue.
    Per my cite in the concessions footnote:
    "Concessions: At Cinergy Field, the Reds pay 10 percent of the gross to Hamilton County. The 1998 payment indicates the Reds had concession sales of about $11 million. Under the new lease, the Reds keep it all, and sales will almost definitely increase in the new stadium, with higher attendance and more offerings, particularly in catering to the fans in luxury boxes and club seats. ďWe'll be restructuring our entire con cessions deal, so there should be an increase,Ē Mr. Allen said. "
    Makes all the routine posts.


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