Comments on: First Pitch: Why Can’t the Pirates Have a Free Spending Billionaire Owner? http://www.piratesprospects.com/2013/04/first-pitch-why-cant-the-pirates-have-a-free-spending-billionaire-owner.html Your best source for news on the Pittsburgh Pirates and their minor league system. Sat, 26 Jul 2014 05:22:00 +0000 hourly 1 http://wordpress.org/?v=3.9.1 By: leadoff http://www.piratesprospects.com/2013/04/first-pitch-why-cant-the-pirates-have-a-free-spending-billionaire-owner.html#comment-25980 Thu, 04 Apr 2013 19:32:39 +0000 http://www.piratesprospects.com/?p=49320#comment-25980 Thanks for the clarification.
I find it hard to criticize Pirate management spending as some do because the Pirates don’t open their books for the public, so what they really have and really don’t have is up in the air to me. They can put all their profits back into the system, but if those profits are not very much they are not going to be able to increase their payroll a whole lot, many fans feel their payroll should be much higher than it is.

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By: bqjd http://www.piratesprospects.com/2013/04/first-pitch-why-cant-the-pirates-have-a-free-spending-billionaire-owner.html#comment-25978 Thu, 04 Apr 2013 19:19:50 +0000 http://www.piratesprospects.com/?p=49320#comment-25978 this was supposed to be a response to leadoff

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By: Tim Williams http://www.piratesprospects.com/2013/04/first-pitch-why-cant-the-pirates-have-a-free-spending-billionaire-owner.html#comment-25976 Thu, 04 Apr 2013 19:04:39 +0000 http://www.piratesprospects.com/?p=49320#comment-25976 “As Tim wrote, the Pirates to our knowledge do put their profits back into the system, how much we don’t know.”

That’s what Lustig said. So it’s fact. He also said they put all of the profits back into the system.

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By: leadoff http://www.piratesprospects.com/2013/04/first-pitch-why-cant-the-pirates-have-a-free-spending-billionaire-owner.html#comment-25975 Thu, 04 Apr 2013 19:02:58 +0000 http://www.piratesprospects.com/?p=49320#comment-25975 As Tim wrote, the Pirates to our knowledge do put their profits back into the system, how much we don’t know. The TV contract is not likely to increase very much, a deal between the Pens and the Pirates seems like it would have been the way to go, but again without any real facts at hand, one can only assume.
The bottom line is that the Pirates need to fill the seats, on this we agree. To do that they need to build the farm and develop from within, not necessarily to bring players to the Pirates but to have a product that is desired by other teams, good trades are possible if you have something good to trade, that is something the Rays are doing now.
To my knowledge there are not many owners that are going to spend millions of their own dollars on players that may or may not work out, they use a balance sheet like every other business and if the profit is 10mil they are not going to spend 20 or 30mil of their own money every year to make the fan base happy. If owners do spend their own money on players, I would like to see the evidence of this and I would like to see how many of them actually do spend their own money on players.

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By: bqjd http://www.piratesprospects.com/2013/04/first-pitch-why-cant-the-pirates-have-a-free-spending-billionaire-owner.html#comment-25974 Thu, 04 Apr 2013 18:57:27 +0000 http://www.piratesprospects.com/?p=49320#comment-25974 you called me misinformed. that is attacking

You are correct that I do not know all of the details as to how the TV contract came about. FC had a chance to tell us about it at Pirates fest, but declined to do. He only said that it was better than reported.

By all indications, he got less, in some cases significantly less, than teams in similar markets. All reports have also indicated that there were several years left on the prior contract. Why extend early? Obviously a very good question when the deal he got is subpar.

You state “you have not said where the TV money that FC can’t get will come from if someone else takes over the presidency of the Pirates.” This is a ridiculous defense. Why would you ever fire anyone then. You can’t change the past. By the same logic Dave Littlefield should not have been fired since the next GM would not have been able to change his poor drafts, trades and other acquisitions.

You want some more facts as to why FC should be fired. First the terrible TV deal. Second the DUI. Third, the outrageous spat with the bar. Fourth, lying to the media and fans about the Russell/Huntington extensions. Fifth, the terrible teams he has put on the field the last six years. Sixth, hiring a GM who was demoted by his last employer. Seventh, after two consecutive collapsing announcing that thorough review of the franchise would take place but before that review takes place stating the the gm and manager would be back. How can you have an appropriate review, when you eliminate some of the most obvious solutions before you start that review. Also, don’t you have a review regardless of the outcome of the season? Why didn’t a review of the 2011 season aid in avoiding a collapse in 2012? Was there a review after 2011?

Do you need more facts to fire him?

If I had more time, I would tell you why Huntington and Hurdle should be fired. Short hand, you oversee two collapses like Hurdle did, you don’t get to keep your job. You are given more money to draft players than any other club in majors and pretty much all you have to show for is picks that any of piratesprospects readers could have made and some low a talent, you don’t get to keep your job.

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By: jg941 http://www.piratesprospects.com/2013/04/first-pitch-why-cant-the-pirates-have-a-free-spending-billionaire-owner.html#comment-25973 Thu, 04 Apr 2013 18:44:16 +0000 http://www.piratesprospects.com/?p=49320#comment-25973 Great job, Tim!

Two things – there’s other differences btw millionaires and billionaires. Even though I think the crazy billionaire thing is a pipe-dream, there is that reality that people for whom money is no object tend to but lots of toys/things that decrease in value all the time (or certainly don’t increase in value/make them a profit (Bugattis, yachts, etc.). IOW, they’re SO rich, they don’t need this 100th thing in their portfolio to throw off profits – a loss-leader if you will.

Some baseball-crazy gazillionaire with big ego might just love to have a pet team and a world series trophy, who knows.

But, back in the real world, there are certain scenarios that say the Bucs could possibly add $30 million/year to “win” and still stay above water, but a bunch of things have go into that equation.

First and foremost, the actual owner WILL have to make less money to buy up a winner. However, there is one area where the Pirates are in exponentially better shape than the Rays….the fan base, IMO. The Rays – who I agree are clearly the smartest organization in baseball – are stuck in this stunningly bad fan hell. They have averaged 92 wins/yr for the last 5 years, playoffs 3 times, WS once…..and nobody gives a crap, nobody goes to the games….unbelievable.

Conversely, when the Bucs merely start to peek above .500, folks come out of the freakin’ woodwork, so I think there’s a financail model you could run in Pittsburgh with some assumptions that might say, for instance: if I could actually field a 85-90 win team that was a playoff contender each year, how much would my fan-only revenue go up? In this town, honestly, I think attendance could increase by as much as 5,000 per game for a team constantly in the hunt, if not start to approach regular (or many, many) sellouts. Feel free to weigh in on that, but we all saw what happened the last two years when they merely started to look not-awful for a change.

I could conservatively say that adds $25/person/game for each of those 5,000 new tix – that’s a little over $10 million in new profits/year. but I’d also run an even more aggressive model that showed assumptions for merchandise, possibility of increasing tix prices, etc., and maybe I’m even low on what a typical fan spends at the Park each game.

If ownership is making, say, $20-$25 mil/year, then maybe $10-$15 of the $30 mil in salary increase can come from the “success premium” profits, but you’d still have to rely on the owner taking a $15-$20 million haircut, unless you also thought an energized/increased fanbase could allow you to find other revenue streams I’m not thinking of, renegotiate your cable deal, etc.

In Tampa, with that fan base? No. In this town? Absolutely, the potential is there to get to sell-out mode with a consistent winner.

Everybody would have to give something, ownership makes less personal profit, fans need to show up and kick in their piece on a regular basis.

You still may end up with the written-about “Pittsburgh Paradox” that Tampa went thru in 2007 and 2008, where the Rays took their last-place profit of $21 million, threw $20 at new salaries the next year, went to the World Series, and the owner made only $1 million.

Hard to ask non-crazy billionaires to knowingly lose money like that on a regular basis, but it would be exciting to see the Pirates give it a roll like the ’07 Rays did, to see if it would work.

But – MORE IMPORTANT THAN ANY OF THAT – I’m also w/Tim right now that more money in the hands of bad decision-makers ain’t the answer.

Maybe that’s why Nutting won’t cross that line, maybe he doesn’t want to lose any more of his money with the same people making the same kinds of day-to-day decisions, who knows. Obviously, the real attraction of the “new billionaire ownership” dream is that they come in with BOTH more money AND the best-and-brightest (Friedman/Maddon) to make the decisions.

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By: leadoff http://www.piratesprospects.com/2013/04/first-pitch-why-cant-the-pirates-have-a-free-spending-billionaire-owner.html#comment-25970 Thu, 04 Apr 2013 16:19:43 +0000 http://www.piratesprospects.com/?p=49320#comment-25970 I did not personally attack you, but you can take it any way you want to.
You have facts, just not the right ones, you need to get more facts before you fire anyone.
You don’t know what was available to FC when he made the deal, you don’t know what the deal is with the Penguins. You don’t know what Root sports is prepared to pay the Pirates and the Penguins in the future, you have not said where the TV money that FC can’t get will come from if someone else takes over the presidency of the Pirates.
The difference in Leadoff and you is that you are not Fired, keep writing, just get more facts before you start firing someone.

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By: LWD http://www.piratesprospects.com/2013/04/first-pitch-why-cant-the-pirates-have-a-free-spending-billionaire-owner.html#comment-25969 Thu, 04 Apr 2013 15:54:27 +0000 http://www.piratesprospects.com/?p=49320#comment-25969 You are talking about TV markets but missing area on influence. Cincy draws from Columbus, Louisville, Lexington and Indy. Cleveland has Buffalo and Erie and splits Youngstown. SD has most of S. Cal outside of LA County plus prices/costs are inflated because everything. Pirates are sort of stuck in a lousy area. To the North and Northwest they are battling with the Indians for fans/viewers. To the East once you get past Somerset or Breezewood you are dealing with Baltimore and Philly. There’s really no population and the rest of the area is WV – Charleston, Morgantown and Wheeling. Really not comparable to Indy, Columbus and Louisville.

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By: bqjd http://www.piratesprospects.com/2013/04/first-pitch-why-cant-the-pirates-have-a-free-spending-billionaire-owner.html#comment-25967 Thu, 04 Apr 2013 15:06:50 +0000 http://www.piratesprospects.com/?p=49320#comment-25967 i was not going to post again, but you personally attacked me calling me misinformed. That is far from the truth. I’m willing to bet I am more informed than 99% of the fandom. I follow everything, a lot.

I would agree that the number of viewers greatly affects the the size of the television deal. I also a agree that the buccos will never get a TV contract as big as the Rangers, Dodgers, Angels, etc.

However to suggest that could not do better is ludicrous.

Cleveland similar size to Pittsburgh $40 million per year for 10 years.

http://hardballtalk.nbcsports.com/2013/01/02/indians-new-local-television-deal-with-fox-worth-400-million-for-10-seasons/

The Reds, one of the smallest TV markets in MLB $30 million a year

http://www.bizjournals.com/cincinnati/blog/2013/04/reds-30m-tv-deal-ranks-higher-than.html

that article notes that “experts say they could get a bump to as high as $75 million when they renegotiate the current contract, which is due to expire in 2016.”

The Padres $50 million per year for 20 years

http://www.cbssports.com/mlb/blog/eye-on-baseball/18355869/reports-padres-new-tv-deal-could-be-worth-more-than-1-billion

Rockies are getting $20 million per year, but there deal expires after next year. I think its safe to assume that they will do better.

http://www.sltrib.com/sltrib/sports/54034430-77/rockies-television-deal-billion.html.csp

FC failed in getting a good deal for the Pirates. All of these teams are in a similar size markets and have done remarkably better.

As far as the meeting between the Pens and Bucs, I don’t know what went down and neither do you. All you know is that the Pens made an offer to buy the Pirates.

16 months after that meeting, the Pens signed an extension with Root for a 20 year agreement. I could not find financial terms. Not that I need to defend the Penguins, but it was suggested in my research that the cost of starting a regional sports network would be about $300 million and obviously, 80+ Penguin games would not be enough to fill all of the needed programming. I can only assume that the cost and the lack of programming were prohibitive in creating a network.

And yes FC should be fired. If you lost your company millions of dollars, what would happen to you. That is on top of everything else.

So leadoff, in the words of Donald Trump, “You’re fired”.

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By: Tim Williams http://www.piratesprospects.com/2013/04/first-pitch-why-cant-the-pirates-have-a-free-spending-billionaire-owner.html#comment-25966 Thu, 04 Apr 2013 14:25:22 +0000 http://www.piratesprospects.com/?p=49320#comment-25966 I appreciate the discussion as well.

I don’t really like the “it’s not our job to know” line. Yes, analyzing the market is the job of Coonelly, but predicting something like this shouldn’t be expected.

You bring up the financial comparisons. I’d say this is something like when the markets tanked back around 2006. I don’t think anyone really saw that coming. Maybe people thought things could go bad, but if your investment manager didn’t pull all of your stocks out of the market before it tanked, I don’t think that would have been on him.

That’s how I see this situation with the Pirates. It’s a total surprise market swing.

But as we’ve talked about, if they don’t sign early, then the market explodes and they can use that for their next deal. So the big question would be, why the need for an early deal?

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