First Pitch: The Only Thing About TV Revenue That Matters

The controversy surrounding the Pittsburgh Pirates’ local TV deal is a strange one. The Pirates are considered a small market team, or low revenue if you prefer. Their TV deal has been reported to be one of the lowest in the game, in a time where teams are signing huge TV contracts right and left. The Pirates signed their extension — running through 2020 — just before the TV market exploded. Call it bad timing, bad luck, or maybe go a step further and say that they should have somehow known the way the industry was trending. Either way, the reaction to the small deal has been negative.

Over the weekend, Frank Coonelly said that the deal wasn’t as low as it has been reported. This is something I’ve heard him say in the past, but without hard numbers it’s not something I’d cite as a counter argument. That’s not to say that the numbers reported are to be taken as gospel either, and I’ll get to that in a bit. Coonelly did add that the Pirates’ figure was in the top half of the league. My reaction was similar to the reaction from Bob Smizik and Charlie Wilmoth. I didn’t see the point of arguing that your revenue is actually higher, when people are basically chalking your low payroll up to the fact that the deal is one of the smallest in the league. The two linked articles talk about that. There’s not much I can add to the discussion.

The topic led me to reviewing Wendy Thurm’s analysis of every team’s local TV deals on FanGraphs. One thing I noticed with all of this is that there are many conflicting reports on the revenue of every team. The Reds are reported as having a $30 M revenue, but an update to the article says another source cites it closer to $10 M. The article lists St. Louis at $14 M, although Derrick Goold of the St. Louis Post Dispatch reports that the deal pays $25-28 M (his numbers came out after the FanGraphs article). The Brewers were listed at $12 M, but the figure is expected to be around $30 M by this point.

Overall it’s hard to know exactly what teams are receiving, since there’s so much conflicting information out there. That’s why I wouldn’t take the $18 M as gospel. It could be wrong information like the Cardinals’ figure. It could be out-dated like the Brewers. Or it could just be correct. The thing that is lost here is that none of this really matters, and overlooks the important topic.

Going through the FanGraphs article, I noticed that the middle of the pack was around $30 M. You’d think it would be higher than that, but very few teams are getting $50-60+ M per year. Most teams are reported around $30 M, with a few teams reported around $20 M or less (the Pirates included). The Brewers, Reds, and Cardinals (using the non-FanGraphs numbers) are all around that $30 M figure. So it’s possible that Coonelly could be right, and the increase could put them in that range with so many other teams. It wouldn’t be a massive increase, but it would allow the Pirates to spend what similar markets are spending if all else is equal.

Even if the TV revenue is the same, you can’t compare the Pirates and the Cardinals. The Cardinals have one of the best attendance figures in the league. The Pirates had one of their best years ever in attendance in 2013, getting 2.26 M fans. The Cardinals got 3.37 M fans, which is an average year for them. So in their best year, the Pirates still get one million fewer fans than the Cardinals. That means if you compare the best years for the Pirates with the average years of the Cardinals, the Cardinals would have about $30-35 M extra in ticket revenues, using some back of the napkin math.

The same could be said about the Brewers. They had 2.53 M fans in 2013, which was their lowest since 2006. In previous years they had been in the 2.7-3 M range. That’s not as big of an advantage as St. Louis, but it is an advantage over the Pirates.

The best comparison probably comes with the Reds. Like the Pirates, the Reds play in a small stadium. They had one of their best years in 2013, with 2.49 M fans. That’s a similar range to the Pirates. The Reds wouldn’t be benefitting from additional ticket sales. If the Pirates are making about the same as the Reds when it comes to TV money (assuming the $30 M figure for Cincinnati is the one that is correct), then they should be able to spend as much as the Reds.

Looking at the Reds’ payroll, they have been in the $73-87 M range for most of the last 6-7 years. That jumped to $106 M at the start of the 2013 season, although it doesn’t seem like they will maintain that number. Shin-Soo Choo is now a free agent, and they have been shopping Brandon Phillips and his contract. Cot’s currently has them at $83 M in 2014, and that includes Phillips. Coincidentally, their average payroll has been $83 M from 2008-2013, and the average payroll around the league hasn’t gone up that much in that time.

I’m also not convinced that the new TV revenues will lead to a massive spike in payroll across the board. That’s something that will have to be seen when the Opening Day numbers are released. However, I think that if teams were flush with cash and ready to spend it all on players, we wouldn’t currently see guys like Shin-Soo Choo on the market with very little chatter.

Last year the Pirates ended up spending around $75 M, by my estimates. That was about what the Reds were spending when they first became competitive, and first added all of their big core players. They gradually increased that number to $80 M, then $87 M, then took a huge spike in 2013. Overall, the average is in the $80-85 M range. The new revenues might kick that up higher, but I don’t think the range would go beyond $90-95 M.

Coonelly’s statement doesn’t come with a specific figure, so there is still guesswork involved. However, an educated guess could say that if the deal is higher, it would probably be in the $30 M range with the Reds and a lot of other teams. If that’s the case, then there’s no reason why the Pirates shouldn’t be able to spend what the Reds have been spending. That doesn’t mean the Pirates should have been spending this much all along — the Reds certainly weren’t before they were contenders. What it does mean is that now that the Pirates are contenders, and getting the attendance, and supposedly getting better than reported TV revenue, they should be able to financially compete with a team like the Reds.

It has happened with very little attention, but the Pirates already are getting to the range where they’re competing financially with the Reds. They currently have a projected payroll of $73 M in 2014. That will likely go up when they add a first baseman, and it could go up more if they make any other additions over the off-season. Add in the in-season spending, and it wouldn’t surprise me at all if the Pirates end up with a payroll over $90 M this year. Considering the new revenues, that would be comparable to the $83 M range that the Reds have averaged prior to the revenue increases.

This is a scenario where, even if we hear a number supporting Coonelly’s claim, there is going to be some uncertainty. However, it all boils down to the Pirates’ ability to financially compete with similar teams. That’s the only thing that matters in this entire discussion. If they want to insist that they’re receiving better revenues, then there would be no excuse to keep a lower payroll than those other teams. Based on the early results as contenders, it doesn’t seem like they will be maintaining a lower payroll.

Links and Notes

**The first shipment of the 2014 Prospect Guide has now been printed, and will get to me on Thursday. I probably won’t have everything ready to ship on Thursday, but will definitely have all orders in the mail Friday morning. I’m shipping everything out of Virginia so that it can arrive earlier. In the past when I have shipped books out of Virginia on a Friday, it has arrived on a Monday or Tuesday for most places. I’ll have more updates when I get the shipment. If you’ve ordered, you will get a tracking number sent to you when I print the shipping label. You can still place your orders here to have them shipped out by the end of the week, however there are only about 70 books remaining in the first shipment. I won’t get the next shipment of books until after the new year. I will have an eBook available in the next few days.

**If you missed it, last night I talked about The New Prospect Ranking System in the 2014 Prospect Guide.

**Pirates Had the Strongest 2013 Draft, According to Jim Callis.

**Pirates Interested in Ike Davis and Mitch Moreland.

**Winter Leagues: Sam Kennelly Gains Valuable Experience.

Tim Williams

Author: Tim Williams

Tim is the owner and editor in chief of Pirates Prospects. He started the site in January 2009, and turned it into his full time job during the 2011 season. Prior to starting Pirates Prospects, Tim worked with AccuScore.com, providing MLB, NHL, and NFL coverage to various national media outlets, including ESPN Insider, USA Today, Yahoo Sports, and the Wall Street Journal. He also writes the annual Prospect Guide, which is sold through the site. Tim lives in Bradenton, where he provides live coverage all year of Spring Training, mini camp, instructs, the Bradenton Marauders, and the GCL Pirates.

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  • Hank

    Spending enough money to consistently field a competitive team should be looked on as an investment by a major league owner. Owners make their money when they sell, and the best way to maximize that profit is to build a very successful franchise. Only spending the money you can bring in in the short term is short sighted and narrows your possibilities. Sports is about winning, so if you can’t say “the hell with a short term profit”, you shouldn’t be an owner. Winning isn’t everything, it is the only thing……

    • http://www.facebook.com/stephen.brooks.581 Stephen Brooks

      Actually, the best way to maximize your profit is to be located in a large market. Atlanta, Tampa, Cleveland and Oakland have enjoyed extended periods of winning but still have had to cut payroll because there comes a point at which you can’t extract any more money from your local market. Heck, Miami doubled their payroll in the ’11-’12 offseason, signing Reyes, Buehrle and Bell and trading for Carlos Lee, following the “build it and they will come” strategy. The fans didn’t show up, the team got off to a disappointing start and we all know what happened next. Not that I condone it, but it’s not my money. Meanwhile in Boston, 3 million fans paid an average of $53 a seat to watch a 69-win dumpster fire. And the Phillies, Cubs and Angels still outdraw half the playoff teams despite their recent runs of futility.

      Sports is about winning, you’re right. But even if every owner made the investments you talk about, only 1/3 of them will be successful (make the playoffs), and 20% of them will wind up in last place. And salaries would climb because every owner is going after the same players to invest in their team, until every team is at the luxury tax level, and it would look like the NBA. In Sacramento, or Washington, or Charlotte.

      There has to be more than one way to skin that cat. The high-rvenue teams keep reloading with free agents because they can. The lower-revenue teams either time their competitive windows (Milwaukee, Kansas City, Cleveland or in the extreme cases, Miami and Arizona) or try to create a sustainable model built on a steady stream of cheap labor (Tampa, Pittsburgh, Oakland).

      • piraddict

        Cogent comment! I wish more fans had your acumen.

        • Hank

          Sure being in a big market helps, but it is not a foolproof solution. Look at the Cubs vs the White Sox. Should Miami be considered a big, affluent market? There are lots of “big” market examples where the revenue doesn’t come in at the expected level. You have to do something to bring the fans in, and of course winning is at the top of the list. And why wouldn’t every owner win if they made the investments necessary??? Because some have better GMs. front office staffs, coaching staffs, etc. You have to spend the money, and spend it well to be a consistent winner. That is unless you are the Yankees, and can outspend your rivals by such a large degree that you really didn’t need to be that smart……

          • piraddict

            The population of the greater Miami area is around 5.7 million people, whereas the greater Pittsburgh area has around 2.45 million people. So as far as having potential paying customers at the ball park and as a target for TV advertising revenues Miami is more than twice the size of Pittsburgh and therefore has the capacity to support twice the expenditures on the baseball team given similar commitments by ownership. In fact the Pirates spend about $30 per potential fan versus $6.3 per potential fan by Miami. See below for more data (hopefully).

            On a dollar of salary per potential fan basis the Yankees spend about $20.6 which is below the league median expenditure of $21.5.

            Also, remember that baseball is a “zero sum game”. For every winner there is a loser, and the margin between the two really isn’t much. A team that wins 6 of 10 is likely in the playoffs. The team that loses 6 of team is in the doghouse. Yet the difference between the two, or a 5 to 5 tie in a ten game series, is the outcome of one game in ten. You are right that the difference between penthouse and outhouse is the quality of people in the system: GMs, Managers, Coaches , Scouts ….. and finally the ball players.

  • https://www.facebook.com/nate.james.125 Nate James

    Tim, thanks for looking at topic. It seems that the haters of the buccos have been coming out if the woodwork. Combine the fact that the recent winning ways has everyone thinking differently about this team, it has caused a negative attitude towards management that I see has unjust. The free agent crop this year was shallow at best and we also wouldn’t want to block a prospect on the same level as a polanco. I give credit to management and I am sure they will spend the money when there is someone out there to do so with! Winning is everything but I rather win consistently than have one great season and another long losing streak.

    • emjayinTN

      Nate: Welcome to Pittsburgh Pirate Baseball. Being distrusting of the ownership of the Pirates has been an annual exercise since the 60’s that I can remember. Big difference this year is that they have to dig deeper to uncover the subject matter because it was buried under 97 WINS and a trip to the Playoffs in 2013. This management group has brought respect back to the Pirates, and the pedestrian members of the Pirates Fandom want it all – RIGHT NOW. It does not happen that way, and the Pirates are well stocked to be a contender for many years to come because they make good decisions in the college and international drafts, and they are extremely unwilling to trade young pitching talent. Five players in the Top 100 of WAR in 2013 (McCutchen, Marte, Martin, Alvarez, Walker), with another very strong OF in Gregory Polanco who can be in that number in 2014 or 2015. As strong as the lineup is, the Pitching is even stronger for 2014 and very well situated for the future.

      These guys know baseball and have made the right decisions, and luckily for us, the OWNER, Bob Nutting, has given the management team the financial support they have needed to build this contending ballclub. The Pirates used to be #30 in MLB, and in a very short period of time, they have become one of the Top 10 Franchises in the Majors. And, the local TV deal will change to reflect the growing interest in Pirate Baseball. The Pirates pretty well maxed out with ballpark attendance in 2013. I would like to see them maintain an average of 30,000 per game, but it will be difficult to do more because of the poor attendance months of April and May.

    • connolly21

      There is no REASON for 20LOSING SEASONS PERIOD IT was a good year But Burnett should have been offered 14 mill AND then let him decide . Loney at least…….. Tim I will ask again did Nutting over the past year put the clubs money into buying a larger share of the club.. 5 million spent in Dominican should have been done years ago Its hard to think positive of \Nuttig for finally spending some $

      • TonyC17

        What is saying they did not offer Loney more money. He wanted to stay in TB and he wanted to play full time. Do you really think they should just throw large somes of money even though the player might not be worth it. I like Burnett but he isn’t worth 14 million. He is deciding with family or pirates. money isn’t a huge factor.

      • stickyweb

        connolly, there are many reasons for 20 losing seasons, and current management doesn’t buy into any of them, thus the turnaround. Yes it’s 1 good season, but the farm system is the best in baseball or very close to it, so the future looks bright, despite all of your capital letters.

        Burnett – Let’s see if he wants to pitch first, then bring him back.

        Why Loney at least? Because he was the only guy out there? That doesn’t make him the right guy, and chasing the only guy could lead the org to more losing.

        Dominican – you can’t blame them for what the previous regime did or didn’t do, just give them credit for finding such gems as Marte, Polanco, Hansen, Heredia, Dilson Herrera, etc.

        If you can’t give credit to Nutting for finally spending some $, can you at least give him credit for overseeing the turnaround of the org from dumpster to diamond mine?

        • https://www.facebook.com/nate.james.125 Nate James

          Exactly! The things I hate about Pirate fans that don’t actually pay attention to the organization as a whole is they are so short sighted. Let us not forget that the Pirates almost left PITTSBURGH during the losing streak before PNC Park was built. History is history for a reason and the future is very bright for this team. We have to remember that Pittsburgh is a small market. We do not have the wealth of resources that NY or LA or even TX has. Our owner is not a billionaire (from reports I have read) who can just pump millions into the team. He needs to be a smart investor with his money which he has. We have spent TONS in the draft, we have built up our Carribean operations, and we are starting to see the fruits of that labor. This team will always be an underdog in the current economics of baseball. So until they fix it and keep a salary cap and floor, we will always have these so called Pirate fans screaming to spend money. It isn’t our owners fault, its MLB embracing the huge markets and giving in to whatever they want.

  • jaygray007

    *Just curious. do we have any information about what debt the team was into from the early 2000s? Is that all paid off? Am I totally making this up?*

    It’s funny that the Pirates have done exactly what they’ve said they would do, but there’s still this distrust.

    So fixated on payroll, but the pirates have the talent of a much more expensive team.

    they have a guy who would probably exceed the Cano contract playing center field only making 7 million this year. They have a guy who is worth in the mid-teens millions playing third and only making a few million. Marte would probably get 10+ mil per year on the open market and is making rookie money. Gerrit cole will likely pitch like a #3 at the very least this year, worth over 10 mil on the open market and is making rookie money. then there’s the Liriano bargain, and Morton making about half of what he is worth for 2014 before his contract sets in. The shark tank too.

    Granted, all teams have at least a few good young cheap players, but the pirates are much more talented than their salary indicates. While they’d be EVEN BETTER if they raised payroll, multi year deals to aging players is a good way to get them out of the running when Alvarez needs a big ole contract (The pros and cons of a pedro extension can be debated. I was just using him as illustration).

    • https://www.facebook.com/bruce.humbert Bruce Humbert

      Jaygray,

      I am not sure it is distrust as much as a bit of frustration – I really do trust the FO and while I have some specific concerns I would not give them an “F” for the off-season – even if they do nothing more before Opening Day. But I would not give them an “A” either – or even a “B” – best I could do would be an Incomplete – that would probably turn into a “C” if they do nothing else. And as I told my students who whined over “just a C” – that is a passing grade – and really not all that bad.

      As for you points on their current players and the “bargain” contracts, that is just the way the system is set up to work. That is why teams place so much value on players who they can “control” for future years. Tampa has shown the way on this – staying competitive – building through the farm system – but moving players BEFORE they sign the big contract – as they plan to do this year with David Price.

      So yes the Pirates benefit now – and double yes because they have a pretty full pipeline that will allow them to at least consider moving Pedro, Cole etc. at the appropriate time in a couple of years for prospects to keep the process going.

  • jaygray007

    Also, i didn’t know where else to put this, but this is just a friendly reminder that Jose Tabata is projected at .275/ .342/ .400 and 1.5 WAR in Fangraphs’ “Steamer” projections. Fun!

    He’s 3rd in my “Most over-hated, underrated Pirates of the last decade” ranks, right behind Adam Laroche and Jose Veras. (list was off top of my head. could probably come up with better)

    • IC Bob

      I do think Tabata can be good when he plays. It just seems to me that he is one of those guys that that when he plays good he always gets nagging injuries. He is the Darren Mcfadden of baseball. A day to day injury turns into a weeks of inactivity. I just don’t trust the guy.

      • jaygray007

        Kudos on the Darren Mcfadden comparison

    • emjayinTN

      007: Liked Veras for what he brought to the Pirates at a very cheap price. Tabata came with 3 other guys who have pitched for the Pirates in exchange for two guys – Xavier Nady and Damaso Marte – who never achieved what the Yankees thought they were getting, and are probably both out of baseball by now. Yep, NH took a beating in the press over that one, and also the trade of Jason Bay. Tabata has the ability to bring a decent prospect, or an even trade with Texas for Moreland or Mets for Davis.

      Adam LaRoche, Mr. Constipation, never got anywhere near what the Pirates hoped to get. He openly resented being traded from the Braves to the Pirates, and never seemed to hit until the horse had already left the barn. We needed a leader who could give us the strong LH bat, but his batting averages in the months of April and May were usually less than “Mendoza” quality. When the pressure was off, he seemed to pile up good stats to finish the year looking average. I do not miss him at all, although he has found a home in Washington until next year. He is just one of the many hopes for 1B that were trotted into Pittsburgh each year – all of whom left us wondering why we spent the money to get them – Kevin Young, Randall Simon, Matt Stairs, Craig Wilson, Sean Casey, Doug Mientkiewicz, Lyle Overbay – did I miss anyone?

  • Cato the Elder

    I appreciate this exercise – the finances of these franchises is such a black box that you almost have to compare and contrast the few variables that are known, e.g. market size, attendance, payroll – but am I crazy to think that these hundred million dollar enterprises are not run as cash businesses? I can’t buy a new car for without getting a loan, do we really expect these teams to be giving $100 million dollar extensions without some kind of insurance underwriters to spread the risk.

    The difference between the Pirates and Cardinals goes beyond just the pure attendance numbers, there is a significance to the fact that the Cardinals have filled their stadium every year for decades, while the Pirates filled their stadium for half of a season. That is to say, there is a predictability to the Cardinals future revenue streams that just isn’t there for the Pirates, yet. It is much easier for the Cardinals to spend tens of millions of dollars 5 years from now than it is for the Pirates because the Cardinals (and their potential investors) can be much more confident in the size and stability if their attendance/revenue. This means they can get more money at a better rate today than the Pirates. Also, this is why $30 million in TV revenue is not equal to $30 million in ticket revenue. The TV revenue is guaranteed where as the ticket money is not. Everybody wants the Pirates to spend the money they got from their attendance bump last year, but I can’t help but think that they already spent most of that. Sure there might be some surplus, but not a ton. When signing a player to a multi year deal, the team is spending money they don’t have yet, and because it isn’t guaranteed that they will get it, they have to hedge. Imagine a bunch of injuries occur and the Bucs fall below .500 again this year, do you think they would still be selling out games in August and September? No, me either, so that risk has to be taken into account. Again baseball clearly is not a zero-sum cash business where the money coming in one year is what is spent the next season. And even if it was, player salaries, which everybody fixates on, is only one piece of the pie. Who knows how the Pirates and Reds differ in terms of spending on the front offices, scouting, minor league and international operations, or how the parking, concessions, and merchandizing revenues differ. And that doesn’t even address all of the past debts accrued.’All in all, I think the whole business of baseball is way more complicated than people want to admit.

    • piraddict

      True Cato. But for the Pirate Way to succeed there has to be a bias towards spending on system infrastructure costs instead of on high priced free agent salaries. Production of a bevy of MLB minimum salaried talent is the Pirate’s path to success on the field and on the income statement. There seem to be too many fans who give lip service to that idea but fail t understand and embrace the consequences of it.

  • Jared

    One really quick point/question: The new national TV deal kicks in next season, 2014 season, so really the teams do not have the extra revenue from that deal yet, correct? That revenue will be there, but it will not be there until next season. That would mean that increase spending from that revenue really should occur next season, right? Teams that are spending that money now are spending “anticipated revenue increases” and not hard cash, if I am thinking correctly. Essentially, it would equal out throughout the year since they would be receiving the revenue and spending it at the same time…but its not crazy to think that there are some teams, especially small market teams, that would rather actually have the revenue fully on the books before turning around and spending it. I am just speaking generally, of course, but I would think that the Pirates revenue would increase more next offseason due to the TV deal, not this offseason.

    That’s for the national tv revenue, but this article was about the local revenue and what that means for the payroll…and all I will say is that I will be quite satisfied/OK with a payroll between $85-90 next season. I do not care so much about “the number” as I do about how you get to the number (how that money is used).

    • stickyweb

      Good points Jared. Like Bruce above, I’m not terribly disappointed in the Bucs offseason so far. Other than Loney, there wasn’t a 1B that made any sense, and it appears the Bucs were in on him to the end but he preferred to stay in the same city and to play every day. He’s been a 1.6 WAR avg for the last 3 years and for his career (calling it a 7 year careerinstead of 8 since it’s been 1084 games), so the $7 mil / year looks about right, but do we really want the Bucs overpaying for 3 years for a guy like this to get him to switch teams?

      By comparison, Ike Davis has been a 1.8 WAR avg for his career (which is 445 games, essentially 3 years). Sure he’s coming off his worst year, but if you’re looking for value, that’s the time to get them, not when they’re coming off a career year. And I think several factors make him more appealing than Loney. 1) the offensive upside (and thus total upside) is much higher than Loney; B) the salaries will be much less and the 3 year commitment isn’t there (if he sucks, he’s gone, but if he doesn’t, they control him for the same 3 years) ; 3) his career splits against RHP are stronger than Loney and we’re looking at them both for a platoon situation; and IV) he’ll be 27 next season vs. Loney being 30.

      All in all, I think NH would have gone for Loney but didn’t want to overpay for him and thinks he can get Davis (or a comparable other 1B with many of the same advantages listed above) for a reasonable return, since several teams have extra 1B options and only the Bucs and Brewers need one. Essentially he’s thinking what he trades away is worth the flexibility of not being locked in for 3 years. And since he’s got so much pitching depth, he’s probably right.

      Signing a free agent RF would have only made sense on a 1 year deal, and they weren’t going to get anybody better than Tabata/Snider/Decker/Lambo on a 1 year deal.

      As an aside, if the Brewers really need a 1B, why wouldn’t they tender Gamel since he’d only get about $1.5 mil? Seems like it would have been worth it to see what he has. Or were they that sure they’d get Hart resigned?

      I have no problem with them banking the new TV revenue for a rainy day when the market lines up better with their needs.

  • stickyweb

    And now for something completely different:

    If the Bucs get a LH 1B (thus keeping Lambo as an option in RF), until someone steps up and grabs RF on a semi permanent basis or until the toolshed arrives, can we refer to our RF as Jaffdrew Snibata?

    Thanks folks, tip your server and I’m here all week!

  • leadoff

    The beat goes on, Money is always a factor, short sighted people think it is only the Pirates, but it is every team in sports, every team has a budget, every team has revenue streams and payroll and every team loses players because they don’t want to pay them for whatever reasons. IMO, regardless of payroll figures, the Pirates have built a very strong organization from top to bottom.

    • connolly21

      Again should have been happening looooonnnnggggg ago

      • stickyweb

        Yup connolly. Or they could have continued their losing ways another 10 years, and then you would actually have something to complain about. Are you seriously saying that NH taking 6 years to turn a pile of shit into a top organization is too long? So he should have been fired after 3 or 4? And if he was, you think they’d be in a better situation than now?

        Forget about the 15 years before he (and Nutting for the most part) arrived. They couldn’t control that anymore than you could. Look at what they’ve done in their time here and appreciate it. But save the “they could have done this 10 years earlier line”, because no, they weren’t even here, so they couldn’t have.

      • leadoff

        Your right, it should have and the franchise should not have had to wait until an entire new management team came in the get the job done, but McClachy was in charge and he was not very good at running a baseball organization. Owners don’t use their own money but they get the right people to do the job that is necessary, that is the big difference as well as a few other differences between Nutting and Mclatchy as far as I am concerned. Nutting is an organizational owner, Mclatchy wanted to win, but he wanted to make money for himself above the organization, in other words he did not put the organization first as Nutting does.

  • Andrew

    The television revenue argument is salient because it is a legitimate way to complain about ownership/front office. It is a little more intellectually robust way of saying the Pirates are cheap.

    I can see both sides of the argument. Bloomberg ranked the Pirates 28 of 30 in media rights and if you look at chart here from a more recent article that Pirates are at the low end with some of their low end partners deals set to expire sooner than the Pirates. Yes, the Rangers deal several months after the Pirates deal created a new baseline, but the explosion of sports media revenue was not an unknown phenomenon in 2010, when Coonelly negotiated the deal with ROOT. However, I think that anyone who has overly strong feeling about the argument has their belief colored by their pre-existing opinion of ownership/front office.

    http://www.fangraphs.com/blogs/dodgers-could-be-last-team-to-strike-gold-with-local-tv-deal/

    The Pirates are a small market team, and will always be constricted by this fact. As Cato pointed out above one year of winning, two (maybe three) of competitive baseball is not going to significantly alter the variable revenue streams. And I think Tim is correct that the Pirates payroll is comparable with the Reds. And I agree with the larger point that lack of a television another $10 million in local television revenue has not hindered their ability to compete.

  • CalipariFan506

    Let’s remember how bad the Pirates were. Root may have had the edge in negotiating just because they could probably put other nonsense on that would rate more highly than Pirates games by September like WPIAL football on Thursday or Friday nights and at the time Big 12 and Pac 12 football on Saturdays.

    Also I think what gets overlooked in every Pirates are cheap debate is that 10 years ago they were pretty much underwater. Meaning more debt than franchise value. I’m sure nutting has been using some of the surplusses jost to maintain the debt level and keep it under control. I’d be it’s still in upwards of $100M.

  • endofline

    The Pirates are at a disadvantage when it comes to gate revenues on two fronts. First their attendance has lagged in the lower part of MLB and their ticket prices are also some of the lowest. According to the team marketing report the Pirates avg ticket price is $4.14 lower than the Reds. Multiply that time an attendance of 2.5 million an you have a $10 million shortfall vs the Reds in revenue. Do the same with the Cards and you have a $40 million spread then add another $30 million for the difference in raw attendance.

    The Pirates still have a long way to go to close the revenue gap before we even begin to talk about TV contracts.

    • endofline
    • stickyweb

      Great post, end. It’s not just the attendence number difference but also the reduced ticket price on those millions of people.

  • piraddict

    Tim, I don’t follow how you can advocate the Rays model yet then criticize the Pirates for not being big salary spenders. It doesn’t follow that if the Pirates have a better than suspected TV contract they should spend it on player salaries. One intriguing way to look at the question is to compute the ratio of 2013 starting payroll to the population of the greater area that the team’s fan base can be drawn from. The population numbers and 2013 starting payrolls are from Internet searches. So who knows how well they can be trusted, but they are accurate enough to make a point.

    2013 Payroll per Market Size
    TEAM ($/Fan) Payroll ($MM) Pop. (MM)
    Reds $48.9 $107.5 2.2
    Brewers $46.1 $83 1.8
    KC Royals $40.7 $81.5 2.1
    Cardinals $39.6 $115 2.9
    SF Giants $36. $140 3.8
    Pirates $30.6 $75 2.45
    Tigers $28.5 $148 5.2
    Indians $26.9 $78 2.9
    Nationals $26.2 $114 4.35
    Phillies $25.0 $165 6.6
    White Sox $24.5 $119 4.85
    Dodgers $24.0 $217 9.05
    Orioles $24.5 $91 4.35
    Rockies $22.5 $72 3.2
    Padres $21.6 $67 3.1
    Cubs $21.4 $104 4.85
    Dia-Backs $20.7 $89 4.3
    Rays $20.7 $58 2.8
    Yankees $20.6 $229 11.1
    Twins $20.5 $76 3.7
    Red Sox $19.9 $151 7.6
    Blue Jays $19.6 $117.5 6.0
    Mariners $16.7 $72 4.3
    Rangers $16.5 $114 6.9
    Athletics $16.1 $61 3.8
    Braves $14.75 $90 6.1
    Angels $14.1 $128 9.05
    Mets $6.5 $73 11.2
    Marlins $6.3 $36 5.7
    Astros $3.55 $22 6.2

    some assumptions that were made were that the two team statistically areas: New York, Chicago, LA, SF/Oakland, Wash/Balt had the fans evenly split between the two teams. Also some teams like the Cardinals draw fans from way beyond their statistical area so their $/fan are significantly overstated.

  • piraddict

    some comments on the data above (sorry it didn’t translate well during the posting process!

    1) The Pirates are unfairly criticized for under spending. Given the potential of the Pittsburgh market they are outspending most of the league.

    2) Higher per fan spenders habits are unsustainable, look at what the Reds are doing now. They will probably be hurting for years to come because of their profligacy of recent years.

    3) Most teams are spending around $21 per fan. Tim’s beloved Rays are at $20.7. The Yankees are at $20.6!!! The Red Sox won the Series spending $19.9!!!! For long term sustainability the Pirates should operate in this range as well which given their statistical area population implies a payroll of about $53MM.

    4) The Rays compete in the AL East with a $58MM payroll. The Pirates need to do it the exact same way, a point made by you Tim many times! But we all need to accept the implications of that conclusion, which means we don’t advocate for higher spending on free agents!

    Instead sensible fans should be insisting that the Pirates keep their annual salary budget under $60MM so that they can reduce prices for tickets, beer, hot dogs etc. That is surely in the fans best interests.

    But who ever said that fans are sensible?

  • esd4

    So the Pirates’ payroll is lagging about $10M behind what the Reds’ was before the recent (baseball) economic boom, about $15M behind the Brewers, and $30M or more behind the Cubs and Cardinals. Now that there’s more money in the game, Pittsburgh is even further behind ($30M behind the Reds, for instance).

    I agree that having a competitive payroll is all that matters, but the team’s payroll isn’t competitive. When you’re $30M behind your small market competitors and you claim poverty to avoid a reasonable $14M deal with a #2 pitcher, you are in trouble.