|06-03-2008, 05:21 AM||#1|
Join Date: Mar 2007
Did the Reds Really Save Money By Keeping Bruce in AAA?
Much has been written about how much money the Reds saved by keeping Bruce in AAA until he passed the "Super 2" threshold. The general consensus is that the Reds saved around $8 million in present dollars by waiting to call him up until now.
While it is true that the Reds likely saved around $8M in Bruce's salary four years from now, that is looking at the Reds overall financial situation in a vacuum. Keeping Bruce in AAA for the first 7 weeks of the season affected many other aspects of the Reds finances.
First, there is the cost of the player signed to keep CF spot warm for Bruce until he was "ready". The Reds signed Corey Patterson to a $3.5M contract to hold the place for Bruce until he was "ready." Now the Reds did need a true defensive CF and possible leadoff hitter, so I don't think that the $3.5M was way off base, if Patterson had just replicated his career numbers. He didn't, so the $3M seems way too much.
Regardless, Patterson was signed to take Bruce's place. It is no coincidence that Patterson was signed right after Bruce was injured in spring training. That was clearly the point when the Reds decided that Bruce would start the season in AAA. So even if the Patterson contract was a bad idea, it was the one made, so I think it is safe to say that the Reds spent $3.5M on Patterson this year as a result of deciding to keep him in AAA.
So that means that the Reds have at this point saved only $5M by keeping Bruce in AAA. But there were other financial factors that were affected by keeping Bruce in AAA. First, attendance.
I think it is safe to say that the Reds would have added at least 2,500 fans a game if they had Bruce up from the beginning of the season. First, they would have been a better team, and winning attracts fans. Second, Bruce would have been a draw himself. I think the 2,500 number is very conservative.
So if they drew 2,500 more fans a game for the 28 home games (not counting opening day), and each fan spent $25 on tickets, food, souvenirs, etc per game, that would result in $1,750,000 in revenue for the Reds this year. Throw in additional revenue from Bruce jerseys and other Reds merchandise bought by fans not going to games, and very conservatively, the Reds would have taken in at least another $2M in attendance this year if they had Bruce up for the whole season.
So that this point the Reds have saved only $3M by keeping Bruce in AAA for the first 7 weeks of the season.
Another consideration is the TV and radio ratings. To be honest, I have no idea how much more the Reds would have made with higher ratings, so I won't figure it in, but I am sure it would be something.
And the if the Reds don't make the Playoffs this year, and if the Reds would have made the Playoffs if they had Bruce up from the beginning of the season, then the Reds would have more than made up for the remaining $3M.
The Reds would make $4.2 million at least on in stadium revenue for each playoff game they play in. (42,000 seats - $100 a fan). So even if the Reds had only one home game in the playoffs, they would have more than made up the remaining $3M they would have lost by bring up Bruce at the beginning of the season. That doesn;'t factor in additional TV and Radio money, nor increased season ticket sales, more merchandise sales and so on.
So in conclusion, even if bringing Bruce up to start the season would not have resulted in the Reds making the Playoffs, the Reds only would have saved $3M by keeping Bruce in AAA. And if it would have resulted in the Reds making the playoffs, they would have made millions of dollars, if not tens of millions of dollars more by bringing up Bruce.
So the Reds risked not making the Playoffs this year in order to save $3M four years from now. They took a bigger risk on Mike Stanton and Corey Patterson. I would rather they risked losing the $3M in four years.
|06-03-2008, 03:07 PM||#2|
I'm back... and forth
Join Date: Sep 2006
Location: Chicago, IL
Re: Did the Reds Really Save Money By Keeping Bruce in AAA?
I do agree with most of what you are saying. However, I think you are generalizing the ticket situation too much. With the revenue sharing program in the majors right now, it isn't like the Reds would have just had extra cash in their pocket due to ticket sales. I'm not exactly sure how it all works, but that money goes to the MLB and it is shared using some crazy formula. I saw somewhere where the Reds only made $42 million at the gates last year, spent like $68 million on salary, yet still made a profit through the revenue sharing (Which is why we should be happy their are teams like the Sox and Yanks and Cubs). I'm not sure of these exact figures, but revenue sharing does help the Reds a lot, being a small market team.
That being said, this would have been an entirely different season if Bruce was up from the start. However, I think letting him get hot in AAA was also a good idea, as that has translated to instant success once he got the call up. Who knows how a 20 year old (at the time) would have responded to playing in front of a sell out with the pressure of opening day.
However, the decisions they made in regard to his "replacement" in center were just awful. I would have been fine with Freel for a month and half, and saved that $3 mil.