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Thread: The Reds 2003 Revenue and Expenses

  1. #16
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    Excellent work.

    My comments:

    On the revenue side, I don't see the cash the Reds got in trades.

    On the expenses side, I think you need the player payroll charge common to all teams and the benefits calculations mentioned by Jax.

    I also think that the "administative" expense must be off by a factor of at least two and perhaps way more. You are talking about salaries for the entire front office and scouting staffs, the Reds' share of the entire minor league organization, transportation, medical expenses, lawyers, lobbyists and probably a dozen more things I cannot think of at the moment.

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  3. #17
    post hype sleeper cincinnati chili's Avatar
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    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.
    How, then, are those people of the future—who are taking steroids every day—going to look back on baseball players who used steroids? They're going to look back on them as pioneers. They're going to look back at it and say "So what?" - Bill James, Cooperstown and the 'Roids

  4. #18
    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.

  5. #19
    Member JaxRed's Avatar
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    The prior figure used showed we paid 35 (second lowest in baseball on those) that included stadium rental.

    Even if we assume that we paid Rent in Riverfront and so we subtract 9 million from the 35, that would place the Admin costs at 24 million knocking another 11 million off profits.


    And I think this will serve as a tremendous resource!!
    The lowest acceptable payroll amount for ownership to show they are not greedy pigs is 15 million more than they are currently paying. No matter what that currently is.

  6. #20
    Unsolicited Opinions traderumor's Avatar
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    I'm not sure that I agree with counting the cash received in trades as revenue. This is an operating statement, not a cash flow statement. Assuming that the Reds do not employ any kind of cutting edge capitalizing of their players as assets, I would make the credit to the partners' captial accounts. I suppose if you really wanted it in revenues, it could be loosely considered a gain on sale of assets.

    I also didn't follow where the national tv revenue number was in that article.

    It is also appropriate to make an annual amortization charge for deferred money, like Griffey's contract. Any kind of backloaded contract such as Jr.'s would be a candidate since the contract is designed to take advantage of NPV for cash flow purposes. These should be amortized an equal prorata portion per year over the term of the contract. Likewise, investment income should be recorded since the Reds are hopefully investing to help match the NPV of the deferred contracts when they come due.

    I also agree that $13M is low for all front office, minor league, etc expenses. Considering the draft budget, signing bonuses, the minor league system, spring training, and the entire scouting and admin staff probably exceeds that total alone
    Last edited by traderumor; 01-28-2004 at 01:39 PM.

  7. #21
    Member JaxRed's Avatar
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    Actually I think Redsland would like to view this as a cash flow statement, and exclude the kind of things you are mentioning.
    The lowest acceptable payroll amount for ownership to show they are not greedy pigs is 15 million more than they are currently paying. No matter what that currently is.

  8. #22
    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. “We'll be restructuring our entire con cessions deal, so there should be an increase,” Mr. Allen said. "
    Makes all the routine posts.

  9. #23
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    I think you'll find in the end that's a poorly written paragraph. Obviously the Reds won't get all the revenue. Why would SportsService agree to be the vendor if they get no money?

    I think what that meant is the county won't get a cut. Maybe I can find a better reference.
    The lowest acceptable payroll amount for ownership to show they are not greedy pigs is 15 million more than they are currently paying. No matter what that currently is.

  10. #24
    You know his story Redsland's Avatar
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    Originally posted by traderumor
    I also didn't follow where the national tv revenue number was in that article.
    It's the first entry under "National Revenue Sources," $16,666,667.

    (I split up national and local revenues because only local revenues go into the revenue sharing pool.)
    Makes all the routine posts.

  11. #25
    You know his story Redsland's Avatar
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    Originally posted by JaxRed
    I think you'll find in the end that's a poorly written paragraph. Obviously the Reds won't get all the revenue. Why would SportsService agree to be the vendor if they get no money?

    I think what that meant is the county won't get a cut. Maybe I can find a better reference.
    You may be right. Community organizations still work the concession stands, presumably for a cut of the action.

    It may be possible that Sportservice works for a flat fee that comes out of the baseball operations budget. But probably not.
    Makes all the routine posts.

  12. #26
    Unsolicited Opinions traderumor's Avatar
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    Sorry Redsland, I found the numbers for the National TV contract, but if I read it right, it looks like a 5 year contract for $2 billion, which would be $400M/year, or $13.3M for the Reds.

    I do not agree that cash-basis accounting is the best way to look at these numbers. Doing so will severely overstate the Reds' bottom line, which benefits no one. All that will do is provide fodder for those who claim that the Reds are lying about their financial situation. Amortization of backloaded contracts is a critical number in the Reds' business and should be included in any income statement. It is known, measureable, and certain to be paid. It should be included in the interest of fairness.

  13. #27
    You know his story Redsland's Avatar
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    Thanks for the feedback everyone, and keep it coming.

    I'll add in the approx. $6MM payroll fee or whatever it is once someone provides me with a cite. Also, if anyone can help me determine how much to "charge" for Social Security, etc., let me know.

    Cash from the trades? I suspect these show up as "savings" on Jax's player payroll page, but I could be wrong.

    As for front office expenses, personally I think $13MM sounds like a lot of money, but if you're skeptical about this number, I will gladly change it if you can point me toward a cite.

    Makes all the routine posts.

  14. #28
    Member JaxRed's Avatar
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    I'll get you some more numbers (probably tonight). I do NOT include the cash we get back from trades. I could probably do that.
    The lowest acceptable payroll amount for ownership to show they are not greedy pigs is 15 million more than they are currently paying. No matter what that currently is.

  15. #29
    You know his story Redsland's Avatar
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    Originally posted by traderumor
    Sorry Redsland, I found the numbers for the National TV contract, but if I read it right, it looks like a 5 year contract for $2 billion, which would be $400M/year, or $13.3M for the Reds.
    **Smacks head** Oops. I misread my own source. It says "this year and the next four." I only saw the "four."

    Thanks, I'll fix it.
    Makes all the routine posts.

  16. #30
    Unsolicited Opinions traderumor's Avatar
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    One thing I'm a little confused on is how the Reds end up with $15.8M in revenue sharing when the City Beat article agrees with the Reds' position that they likely would be paying out instead of taking in. I realize that attendance was lower than expected, but that should not result in a postive share to the tune of $16M.

    Man, this stuff is like auditing a car dealer--now you see it, now you don't.


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