Excuse me if I missed this in the Pirates finances debate, but year-to-year revenue is besides the point. The Nuttings purchased the Pirates in 1996 for $92 million. The team is now worth $1.35 billion according to Forbes. If Nutting chose to he could easily absorb year-to-year losses knowing that the underlying value of the team has risen way beyond the rate of inflation and will continue to rise barring a depression (which I wouldn’t rule out given the state of the world and its collective leadership).
There may not be a better return on investment in the entire U.S. economy than owning a professional sports team. The Boston Celtics are selling for $6.5 billion. The current owners bought the team in 2002 —- not exactly ancient history —- for $332 million. That’s $588 million in 2025 dollars. So they made more than 10 times their original investment in constant dollars.
take on debt to reduce taxable income and improve cash flow, dump profits into paying off debt (back into the "team"), grow value of the initial investment, cry poor for not taking a salary.
This really is more to the point. Back in ancient times, income from a team was probably important to many owners. Now, it's irrelevant. I seriously doubt Nuttin needs any distribution from the Pirates in order to pay his cellphone bill.
Borucki has an opt-out this weekend. He's had such a good spring, he should have an easy time finding a roster spot somewhere. I don't think they can afford to let him go. It's not like they just have to have Shugart and Strzelecki.
Astros are short on starting pitching. Wonder what it would take together Melton from them? ( I'd ask for Smith, but I expect he is off limits.) Melton would need a short side platoon partner, but the Pirates could use an outfielder with some power/speed and who is cost controlled.
From the Guardians "Away Back Gone: "Ortiz has allowed 19 runs on 18 hits and 12 walks in 14.2 innings across five spring training starts."
"Ortiz is walking nearly as many batters as he is striking out (7.4 BB/9, 8.6 K/9) and that's a huge problem."
I hope, like me, this makes you feel better about the trade for Horwitz. Even if it means we lost 2 prospects and will likely have NRI DJ Stewart at 1B for 8 weeks.
It was just fun to read. It's only spring training, but still, whatever is going on, it could linger.
Ortiz is going to be a real good relief pitcher, which would make the trade acceptable, if it the trade had meant that the Pirates had a good 1Bman to add to their lineup on opening day 2025 to give them a chance to compete for division or a wild card... not a guy who will miss the first 2 months of the season, not play until the Pirates are already 5 games back, and give them another excuse for why they failed to be competitive.
5 games back after 2 months is absolutely contending. Also, this was not a one year trade or signing like Tellez or Santana. Both teams made this trade hoping they will have a good or more contributor for multiple years. A question for everybody, is the outlook for Horwitz really 2 months, I could be wrong but I thought it was a late April/ early May target return.
So... we can take comfort in the fact that Horwitz is expected to contribute a full season... next year. At some point, one would expect next year to become this year, but it never does.
Yes exactly - given the payroll discussion going on, making a trade or signing that is not a one year patch (with risk for both teams) to me is an improvement. Starters can get hurt, in this case it is the start of the year. TBH this is the exact opposite of pushing things out a year. Pham (instead of trading for or signing a player with multiple years of control) is pushing things out a year.
It’s the internet. People just pull stuff out of their butts and present it as fact. There is plenty to be discouraged about in pirateville, without even making stuff up. I, personally will be rooting for Ortiz to find success, but his underlying numbers from last season don’t scream longterm success
Sasaki's debut in Toyko was impressive.....for the first inning. He was so pumped up he hit 100 and 101 and had 3 quick outs, one K. But the adrenaline quickly wore out and he struggled mightily in 2nd and 3rd. He threw 31 balls, 25 strikes, walking 3 in a row at one point. He's uber-talented but has a long arm max effort delivery on every pitch, and he throws a splitter alot. It's not a big stretch these days to say he's headed for TJ and it won't be too long into his career.
This is where Skenes excels with a level heart beat in any and all situations. They mentioned Sasaki broke a sweat in warming up maybe excessively, and he was sweating on the mound. Indoor temp 72. Skenes never deviates his pre-game. He is just the consummate pro and we are so privileged to have him. If Sasaki finds his control he will be the NL ROY.....and will dominate like Skenes.
Dejan’s big piece on the finances is out. Turns out they lost money. While I never thought they were making huge profits, I was surprised to find out they lost money.
Regardless of where the truth lies, there is a lack of business creativity and initiative with this organization. They simply accept the current situation for what it is. This is why different ownership is needed. Nutting's formula for winning baseball hasn't worked. There needs to be change.
"Plodding along with low revenues that are low, in large part, because of how the team’s been run … that ain’t it. That’s on ownership. Making money’s on ownership."
I also think this brings up a point that’s been made over the years: they need to bring in someone wealthier who can afford to take risks. Nutting and his failing newspaper chain can’t keep up with hedge fund managed teams.
I would argue that Nutting is at the point where he cannot afford to not take risks. The brand is in the toilet, and any further rise in the value of the franchise is completely dependent upon the value of baseball generally. If I owned a McDonald's, I would want my local venue to have a good local reputation. I would not rely on McDonald's corporate brand internationally to feed my family if the reputation and revenues of my franchise were dismal.
I’m not convinced he really cares that much. He has other businesses and sources of revenue. The team props up his net worth, and he can probably borrow against that if he needs to. It’s not like he has to spend, at least as of now, there’s really no mechanism beyond the revenue sharing rule to force teams to spend.
The value of teams will continue to accrue, and he might be hopeful that changes to economics further benefit him. They also have this ballpark village concept that’s going to be coming online in a few years. Perhaps he’s hopeful that a combo of those things will turn the tide.
I think that he cares. The publishing business right now is brutal. The margins are miniscule for every type of publishing. I am familiar mostly with the freelancing, editing, typesetting end of it, but publishers, authors, and everyone else do not have much money to spare for basic services. More and more, I find myself bidding against Pakistanis who are willing to work for $2 or $3 per hour. I can't even imagine what the situation is like for newspapers and magazines in the U.S. .
“Anyone who quotes profits of a baseball club is missing the point. Under generally accepted accounting principles, I can turn a $4 million profit into a $2 million loss and get every national accounting firm to agree with me.” - Former Blue Jays President Paul Beeston
Pretty sure he is talking about below the line expenses here, it’s true operating earnings or profits versus what’s left over after you account for interest, taxes, depreciation, amortization, rent and management fees.
Are they hiding ticket sales funds under a mattress somewhere? Secret TV money in the mayonnaise jar in Travis Williams fridge? These numbers are so believable because they are exactly what you’d think they’d be. For all the talk of them not opening the books, or using financial chicanery, as you suggest, we can see the reality of their business because it’s conducted in public.
the pirates are inarguably *not* a public business and the article you're citing as infallible *openly* speculates over hundreds of millions of dollars.
but knowing you, you'll reply that you didn't say the exact same thing you just said and I'll waste my time with hours of conversation that makes me dumber so this will be my last response to you.
Well, you have an unfortunate habit of rephrasing what people say to make it sound more outrageous/absolute than the poster intends.
I never cited it as infallible. I used the term credible, which I’ll stand by. And no, they aren’t a public company, but much of their business is conducted in public. Anyone can make an educated guess on their revenues because so much information is publicly available: their ticket sales data and ticket prices aren’t classified. Anyone with Google can figure it out. There’s a lot of reporting on revenue sharing figures, credible estimates for local TV deals, etc. Their share of the national TV money is public. And the revenues he’s citing sound very similar to the PG reporting, which clearly came from financial statements they obtained.
Yes, because if I’m not sure, I don’t give a definitive answer. And I’ve explained numerous times why this is. Not hard to grasp. Unless you don’t want to… ;)
DK's article says they get $25 million in local tv money which is half of what they got before ATT sports net folded and they took partial ownership of the network with penguins ownership (fenway sports group). Losing half of their tv money is pretty serious.
Local tv money is almost certainly shrinking in all markets. Streaming continues to take market share. And some of the top streaming services (e.g. YTTV) don’t even offer local sports networks. I’d also bet that those that do are not paying top dollar distribution fees as they try to grow their businesses in what are now fractured markets (one or two cable companies vs 6-7 streamers plus cable).
He spends a lot of words explaining payroll - which most of us know fairly well, then just drops the $172m “operating expenses” without any explanation.
Eventually he cites the analytics org growing from 111 to 138 people, over 6 years… that can’t possibly be more than a few million.
He isn’t real detailed there, but it is expensive to run a baseball team. They have to pay for travel, all the costs associated with running PNC Park, the Dominican facility, Pirate City, all the minor league affiliates, the salaries and bennies for all the front office staff, etc etc etc.
Regarding the analytics staff, those guys aren’t coming cheap. You’re hiring people with fancy degrees who would make 6 figures on Wall Street to analyze numbers. You’re hiring an engineer or a physicist who could make 6 figures in the private sector to work in the pitching lab. It’s not inconceivable to think that the total benefits package for one of those guys could run well into the 6 figures.
You think about it, it’s really one of the ways the game has changed since most of us were kids. Back then the expenses were limited to player and coach payroll, buying hot dogs, turning on the lights on, maybe some weight training equipment for the players. Now these teams are buying high tech equipment for R&D with pricy staff to go along with it.
i agree that’s it’s expensive to run a team - how much? i have no clue and i’m not sure DK does either. What are they spending all that other money on??
Fortunately there’s a baseball team that has to release financial statements to compare. The Atlanta Braves generated $595 million *baseball* revenue last year compared to our roughly $300 million figure cited by Dejan. Their payroll figure, according to Spotrac was $238 million. That leaves $357 million unaccounted for, far more than the $215 million or so spread the Pirates have, if you believe Dejan’s figures. A caution: I have no idea how they sort out the non-baseball expenses associated with running Battery Park. But the Battery Park revenue doesn’t appear to be included in the $595 million figure, according to the Sports Business Journal, as the mixed use development is listed as a separate $67 million dollar figure.
I appreciate your point and research. For an article that is centered around revenues, costs and profits, it does a poor job explaining where a large majority of those costs are.
We all know how much they spend in payroll, the fanbase wants to know where the rest of the money goes and why it’s not reinvested in payroll. To write “actually, they’re losing money!” and not explain the mysterious >50% chunk of costs that no one knows about seems ridiculous.
My assumption is that their operations are set up to be profit neutral, give or take a few million on either side. They have enough below the line expenses for Nutting and his investors to offset the incomes they generate/earn elsewhere. This really comes down to how they split the pie and what is most effective recipe to producing a consistent winner.
I think you make a fair point. But at the same time, we can compare the revenues presented, and compare them to the Braves and see that we are getting swamped. Even with a half decade of competitive baseball, I’m just not convinced this market is capable of producing revenues competitive with the Braves.
DK seemingly makes a lot of shit up, and pins it on “sources” when he’s wrong. I’d bet his “independent team” he hired for investigating the Pirates finances was actually just him stealing some of Ethan’s payroll numbers and a handful of off-the-record quotes from Travis Williams.
Remember, Ethan’s payroll numbers are just for the 40-man and player benefits, they do not include MiLB salaries, bonus pool monies for MLB incentives, and roughly $20m in spending on the MLB amateur draft and international amateur free agency.
His estimates seems reasonable to me, and loans are a simple matter to check. If the team is taking small loans, they are not making money. I find the article credible, even if the source is dubious.
highlights a couple things that don't get talked about enough, namely how much the players bargained in favor of minors in the last CBA.
but don't be naive, every single organization in baseball takes on some amount of debt, i.e. loans. It would be financial malpractice not to.
there's also enough classic Dejan exaggeration of *known* issues to questions his judgement of what's not.
the entire paragraph about the "erupted" spending on amateurs is obviously bullshit. Both north american draft *and* international free agency have been capped explicitly to control costs. You can easily add up the Pirate's known costs for both and conclude they don't spend $26.5m per year.
It appears SI relied on the incomplete PG reporting. The PG reported on just revenues versus payroll, with no idea of the expenses in between. Say what you want about Dejan, but the picture he painted is complete.
The PG's articles on this subject over the years have been ridiculous: obviously written by a bunch of journalist types who took every course in feel-goods and none in hard subjects. It takes a special kind of naive to write things like, "can you believe that expenses depend upon revenues? How scandalous!" This was the basic gist of the PG articles that read on the subject: accusing the Pirates of basing expenses on revenues.
Yes... they are fixated on the idea that revenues decide expenses as is the fact of life for every business on earth that does not have an infinite line of credit from Wall Street, London, Brussels, or Tokyo.
I think people really struggle with the fact that these guys, as rich as they are, don’t have unlimited sums of money. They all spend roughly in line with their revenues… even Cohen. And even if ole Bob did decide to take a loan, or dip into the personal funds, he’s still outclassed by guys like Cohen 20 to 1 in terms of net worth.
I used to read him all the time when it was on post gazette. This is the only site I pay for. This is my news channel and social media combined for a great low rate.
The silver lining is that it should focus attention on the team's primary issues. The cheap owner meme is an easy go-to. The bigger problem is FO incompetence and the fact that Nuttin has let a culture develop where losing is perfectly OK.
I've been saying this for years. The Pirates are spending about what I would expect them to spend given their hopeless revenue situation. Even if they had another $10 million or $15 million in player payroll every year for the past 6 years, what difference would it have made? Would 2 more Tommy Phams have improved the team or made it worse?
The problem is not the spending on payroll. The problem is hiring the first guy to call Nutting who has a degree in BS from a New-England liberal arts school (where BS is the only major allowed) to run the team, and then never holding them accountable for on-field results until a bullpen pitcher plays hanky panky with a 13 year old (which, unlike on-field results, is not the fault of the GM).
Their brand is in the toilet, and it is not because they are cheap. They are cheap because their brand is in the toilet. Their brand is in the toilet, because they have been run badly for 30 years. Hire a real GM and start solving the problem!
But they had $20 million last year to spend on free agency and $15 this year. They opted to sign a bunch of guys whom they could have had on split contracts or even minor-league deals. There is nothing to indicate that giving Littlefield $10 million more to play with each off-season would result in anything more than 2 or 3 more Fraziers, Hedges, Phams, and Tellezes every season in place of the Palacioses, Williams, and Rivases.
except for, of course, the 2013 world series champion roster he put together with the help of mid-tier free agent signings that would be in the Pirate's price range with a ~$100-110m roster.
there's a helplessness displayed here that I don't understand.
The Red Sox 2013 middling free agents and in house salaries still came to over a $150mil payroll and adjusted over $170mil. I know apples to oranges. That team had a fairly strong core between 5 and 8 players if I'm remembering correctly that would have been top 3 or 4 paid players on the '25 pirates.
I think my numbers are close, I got to go look it up now lol.
You are helping me make my point. Signing piles of middling, low-tier, or high-risk free agents every off-season is basically what Littlefield does every year whether he is here or in Boston. He got lucky in 2013. That strategy is going to work 1 time in 100. Who wants to wait 100 years for Ben to get lucky again?
Yeah they really need to look at how they are operating. The money isn’t there for them to operate in the manner they wish. For the life of me I can’t figure why Nutting isn’t ganging up with the Rubenstein’s, Monfort’s and Reinsdorf’s of the world to loudly whine and complain for a salary cap?
one loosely-sourced article and your brain cannot even fathom *any* reason for why Bob Nutting displays no vested interest in upending the economic framework of Major League Baseball?
2.) Nutting has shown a studied disinterest in change.
Why? I have no idea. Other owners are screaming for a salary cap. These numbers could also be wholly true, and Nutting could be financially benefiting in other ways that we can’t fathom, in which case it wouldn’t matter to him that the Pirates aren’t profitable. But that’s wholly unknown, and it wouldn’t change the fact that the Pirates aren’t a great business, assuming the numbers presented here are true. His article also doesn’t really delve into those aspects.
Don't know if this is optimistic or pessimistic. I'm all in on the Skenes era.. I assume he will be here through his arb years only (last year only if Bucs are competitive). So... assuming pitchers are pitchers if Bucs can have only one TJ a year among their SP depth then if Jones is the one this year so be it. Get it done and come back stronger. Just need Skenes to not need a TJ until he leaves for mega $. From today's report I find a glimmer of hope that it was discomfort not grabbing his elbow etc. However, if he needs TJ go get it done now. I'm warming up to giving Mlod the first shot over the even younger guys if for no reason other than I fully feel MLod as a 'good' starter is still more valuable than turning him into a late inning reliever. If he is showing promise now, let's go for it. And it adds another pitcher to what is very good SP depth Let's go Bucs.
It seems almost certain that Jones will not be on the Opening Day roster. Assuming he is not and Falter my predictions are:
10. Carmen Mlodzinski….100%
11. Pete Strzelecki………….80%
12. Kyle Nicolas………………50%
13. Ryan Borucki……………..40%
——————————————————-
14. Joey Wentz……………….30%
15. Justin Lawrence………..30%
16. Michael Burrows………..20%
17. Tanner Rainey…………….20%
18. Thomas Harrington….…10%
19. Carson Fulmer…………….10%
I have this hunch Mlodzinski or Ferguson will fill the rotation. Nicolas has flashed his high-end potential. I think they’ll keep Borucki over Wentz. I’m not as convinced as most that Harrington is a candidate as he’s not even on the 40-man. Surely not Fulmer, right? Right?!
I agree on Harrington and I am not sure (total guess) that maybe he was still in camp because there was an opening for starter innings when his turn was due vs. some of those sent down. As I just posted, I hope Mlod gets first shot at filling a SP role. If Borucki can be kept in the minors (I forget his out clause) then I might give Wentz the spot if only for depth knowing that somebody will get hurt or under perform. If it is a clear Wentz vs. Borucki and they likely lose the other, I would choose Borucki as you have. For some reason I think they want Lawrence so Nicolas could be the odd man out, but he would be back soon.
It is easy to identify hits, especially Extra Base Hits, but the game sometimes turns on who can get on base by working a Walk. I have read some negatives or questions about 'Cutch and Pham, but they are team leaders in working Walks. Listed are the guys on the Pirates in ST that are team leaders in the category of Walks to Strikeouts -
Endy Rodriguez - 9 Walks, 3 K's
Enmanuel Valdez - 9 Walks, 5 K's
Tommy Pham - 10 Walks, 7 K's
Andrew McCutchen - 9 Walks, 8 K's
Ke'Bryan Hayes - 4 Walks, 3 K's
Billy Cook - 8 Walks, 9 K's
Joey Bart - 6 Walks, 8 K's
These are the folks who I term "grinders" - they grind out every single AB because they know it is important to help their team. On the other end of the spectrum, players with K/BB numbers 3/1 or 4/1 better be hitting 20+ HR's/yr! And IKF (41 K/3 BB) and BDLC (52 K/4 BB) created a whole new world of futility and embarrassment last year. Glad they unloaded BDLC and IKF is only here again because it would cost too much to get rid of him now.
I like this post, Mel. I've always been a big fan of grinders. Loved the way a Jason Kendall was just so hard to strike out and enjoyed his bats. I love when a guy takes ten or more pitches out of a pitcher in a single at bat. THAT is helping your team.
And despite some low batting averages that are becoming common these days as pitching leaps ahead, I'm always a fan of a guy hitting .240 but his on base percentage is .350.
Brings me back to Moneyball... "He gets on base."... (A movie I can watch at any time when I come across it.)
Your list there is one that gives me comfort, esp when looking at Pham, who we acquired for SOME reason, right?
I know Cutch's eye is fantastic. Give that guy a challenge and it'll be a game changer for him. Really happy to see Endy, the switch hitter, leading the parade. Makes me wonder what the Bucs are gonna do at Catcher.
I would love to see them keep all three and rotate a guy or two into first base (endy can play second) so they can keep their catchers fresh all season. To me, athletes get injured when they're fatigued. Imagine having Hank, Bart and Endy...
When HR's became what everyone was looking for, the number of strikeouts and strikeout rates were overlooked. I'm no different - give me a kid who can hit 20+ HR's in 400 AB and I'll take a 3/1 K/BB.
Excuse me if I missed this in the Pirates finances debate, but year-to-year revenue is besides the point. The Nuttings purchased the Pirates in 1996 for $92 million. The team is now worth $1.35 billion according to Forbes. If Nutting chose to he could easily absorb year-to-year losses knowing that the underlying value of the team has risen way beyond the rate of inflation and will continue to rise barring a depression (which I wouldn’t rule out given the state of the world and its collective leadership).
There may not be a better return on investment in the entire U.S. economy than owning a professional sports team. The Boston Celtics are selling for $6.5 billion. The current owners bought the team in 2002 —- not exactly ancient history —- for $332 million. That’s $588 million in 2025 dollars. So they made more than 10 times their original investment in constant dollars.
take on debt to reduce taxable income and improve cash flow, dump profits into paying off debt (back into the "team"), grow value of the initial investment, cry poor for not taking a salary.
rinse and repeat.
This really is more to the point. Back in ancient times, income from a team was probably important to many owners. Now, it's irrelevant. I seriously doubt Nuttin needs any distribution from the Pirates in order to pay his cellphone bill.
I’d point out, he also has other sources of income. Wigle Whiskey for example. And I doubt anyone cares if he’s taking distros there.
Exactly
Borucki has an opt-out this weekend. He's had such a good spring, he should have an easy time finding a roster spot somewhere. I don't think they can afford to let him go. It's not like they just have to have Shugart and Strzelecki.
Any word on how Mlodzinski did today?
Went 4. Three quick, last inning not good.
Mlod has options and needs to stretch out in AAA if he really wants to be a starting pitcher
Put Ferguson in the rotation and open the season with this batch of relievers
Bednar
Holderman
Santana
Nicolas
Lawrence
Wentz
Borucki
Mayza
Mlod’s already as stretched out as any of their starters.
Verdugo signed w Atl for 1.5M. I didn’t want him, but how on earth does Pham get $4M and Verdugo 1.5? Maybe Nuttin should be cheaper.
The main return for the Red Sox in the Mookie Betts trade.
seems like he overplayed his hand.
So did Pham, only nitwit BC fell for it.
Astros are short on starting pitching. Wonder what it would take together Melton from them? ( I'd ask for Smith, but I expect he is off limits.) Melton would need a short side platoon partner, but the Pirates could use an outfielder with some power/speed and who is cost controlled.
Haven't read the DK article.....but did it site the amount of revenue sharing received? Kinda sorta important.
yes.
From the Guardians "Away Back Gone: "Ortiz has allowed 19 runs on 18 hits and 12 walks in 14.2 innings across five spring training starts."
"Ortiz is walking nearly as many batters as he is striking out (7.4 BB/9, 8.6 K/9) and that's a huge problem."
I hope, like me, this makes you feel better about the trade for Horwitz. Even if it means we lost 2 prospects and will likely have NRI DJ Stewart at 1B for 8 weeks.
It was just fun to read. It's only spring training, but still, whatever is going on, it could linger.
Ortiz is going to be a real good relief pitcher, which would make the trade acceptable, if it the trade had meant that the Pirates had a good 1Bman to add to their lineup on opening day 2025 to give them a chance to compete for division or a wild card... not a guy who will miss the first 2 months of the season, not play until the Pirates are already 5 games back, and give them another excuse for why they failed to be competitive.
5 games back after 2 months is absolutely contending. Also, this was not a one year trade or signing like Tellez or Santana. Both teams made this trade hoping they will have a good or more contributor for multiple years. A question for everybody, is the outlook for Horwitz really 2 months, I could be wrong but I thought it was a late April/ early May target return.
So... we can take comfort in the fact that Horwitz is expected to contribute a full season... next year. At some point, one would expect next year to become this year, but it never does.
Yes exactly - given the payroll discussion going on, making a trade or signing that is not a one year patch (with risk for both teams) to me is an improvement. Starters can get hurt, in this case it is the start of the year. TBH this is the exact opposite of pushing things out a year. Pham (instead of trading for or signing a player with multiple years of control) is pushing things out a year.
2 months seems a tad excessive.
It’s the internet. People just pull stuff out of their butts and present it as fact. There is plenty to be discouraged about in pirateville, without even making stuff up. I, personally will be rooting for Ortiz to find success, but his underlying numbers from last season don’t scream longterm success
Sasaki's debut in Toyko was impressive.....for the first inning. He was so pumped up he hit 100 and 101 and had 3 quick outs, one K. But the adrenaline quickly wore out and he struggled mightily in 2nd and 3rd. He threw 31 balls, 25 strikes, walking 3 in a row at one point. He's uber-talented but has a long arm max effort delivery on every pitch, and he throws a splitter alot. It's not a big stretch these days to say he's headed for TJ and it won't be too long into his career.
This is where Skenes excels with a level heart beat in any and all situations. They mentioned Sasaki broke a sweat in warming up maybe excessively, and he was sweating on the mound. Indoor temp 72. Skenes never deviates his pre-game. He is just the consummate pro and we are so privileged to have him. If Sasaki finds his control he will be the NL ROY.....and will dominate like Skenes.
He's that good.
Dejan’s big piece on the finances is out. Turns out they lost money. While I never thought they were making huge profits, I was surprised to find out they lost money.
https://dkpittsburghsports.com/team/site-stuff/feed?page=0&content=pirates-losing-money-bob-nutting-investigation-mlb-dk
Regardless of where the truth lies, there is a lack of business creativity and initiative with this organization. They simply accept the current situation for what it is. This is why different ownership is needed. Nutting's formula for winning baseball hasn't worked. There needs to be change.
As Kovacevic writes:
"Plodding along with low revenues that are low, in large part, because of how the team’s been run … that ain’t it. That’s on ownership. Making money’s on ownership."
I also think this brings up a point that’s been made over the years: they need to bring in someone wealthier who can afford to take risks. Nutting and his failing newspaper chain can’t keep up with hedge fund managed teams.
I would argue that Nutting is at the point where he cannot afford to not take risks. The brand is in the toilet, and any further rise in the value of the franchise is completely dependent upon the value of baseball generally. If I owned a McDonald's, I would want my local venue to have a good local reputation. I would not rely on McDonald's corporate brand internationally to feed my family if the reputation and revenues of my franchise were dismal.
I’m not convinced he really cares that much. He has other businesses and sources of revenue. The team props up his net worth, and he can probably borrow against that if he needs to. It’s not like he has to spend, at least as of now, there’s really no mechanism beyond the revenue sharing rule to force teams to spend.
The value of teams will continue to accrue, and he might be hopeful that changes to economics further benefit him. They also have this ballpark village concept that’s going to be coming online in a few years. Perhaps he’s hopeful that a combo of those things will turn the tide.
I think that he cares. The publishing business right now is brutal. The margins are miniscule for every type of publishing. I am familiar mostly with the freelancing, editing, typesetting end of it, but publishers, authors, and everyone else do not have much money to spare for basic services. More and more, I find myself bidding against Pakistanis who are willing to work for $2 or $3 per hour. I can't even imagine what the situation is like for newspapers and magazines in the U.S. .
Fair!
Fell for it again.
“Anyone who quotes profits of a baseball club is missing the point. Under generally accepted accounting principles, I can turn a $4 million profit into a $2 million loss and get every national accounting firm to agree with me.” - Former Blue Jays President Paul Beeston
Pretty sure he is talking about below the line expenses here, it’s true operating earnings or profits versus what’s left over after you account for interest, taxes, depreciation, amortization, rent and management fees.
Are they hiding ticket sales funds under a mattress somewhere? Secret TV money in the mayonnaise jar in Travis Williams fridge? These numbers are so believable because they are exactly what you’d think they’d be. For all the talk of them not opening the books, or using financial chicanery, as you suggest, we can see the reality of their business because it’s conducted in public.
the pirates are inarguably *not* a public business and the article you're citing as infallible *openly* speculates over hundreds of millions of dollars.
but knowing you, you'll reply that you didn't say the exact same thing you just said and I'll waste my time with hours of conversation that makes me dumber so this will be my last response to you.
Well, you have an unfortunate habit of rephrasing what people say to make it sound more outrageous/absolute than the poster intends.
I never cited it as infallible. I used the term credible, which I’ll stand by. And no, they aren’t a public company, but much of their business is conducted in public. Anyone can make an educated guess on their revenues because so much information is publicly available: their ticket sales data and ticket prices aren’t classified. Anyone with Google can figure it out. There’s a lot of reporting on revenue sharing figures, credible estimates for local TV deals, etc. Their share of the national TV money is public. And the revenues he’s citing sound very similar to the PG reporting, which clearly came from financial statements they obtained.
No dude, you say stuff like this...
*I'd lean towards protecting Sammy Sianni in the Rule 5 draft*
Then when it doesn't happen, you play this game of semantics and say...
* I said lean*
That's your thing on here.
Yes, because if I’m not sure, I don’t give a definitive answer. And I’ve explained numerous times why this is. Not hard to grasp. Unless you don’t want to… ;)
DK's article says they get $25 million in local tv money which is half of what they got before ATT sports net folded and they took partial ownership of the network with penguins ownership (fenway sports group). Losing half of their tv money is pretty serious.
Local tv money is almost certainly shrinking in all markets. Streaming continues to take market share. And some of the top streaming services (e.g. YTTV) don’t even offer local sports networks. I’d also bet that those that do are not paying top dollar distribution fees as they try to grow their businesses in what are now fractured markets (one or two cable companies vs 6-7 streamers plus cable).
True, except for teams like the Yankees who have had their own networks for years.
He spends a lot of words explaining payroll - which most of us know fairly well, then just drops the $172m “operating expenses” without any explanation.
Eventually he cites the analytics org growing from 111 to 138 people, over 6 years… that can’t possibly be more than a few million.
He isn’t real detailed there, but it is expensive to run a baseball team. They have to pay for travel, all the costs associated with running PNC Park, the Dominican facility, Pirate City, all the minor league affiliates, the salaries and bennies for all the front office staff, etc etc etc.
Regarding the analytics staff, those guys aren’t coming cheap. You’re hiring people with fancy degrees who would make 6 figures on Wall Street to analyze numbers. You’re hiring an engineer or a physicist who could make 6 figures in the private sector to work in the pitching lab. It’s not inconceivable to think that the total benefits package for one of those guys could run well into the 6 figures.
You think about it, it’s really one of the ways the game has changed since most of us were kids. Back then the expenses were limited to player and coach payroll, buying hot dogs, turning on the lights on, maybe some weight training equipment for the players. Now these teams are buying high tech equipment for R&D with pricy staff to go along with it.
i agree that’s it’s expensive to run a team - how much? i have no clue and i’m not sure DK does either. What are they spending all that other money on??
Fortunately there’s a baseball team that has to release financial statements to compare. The Atlanta Braves generated $595 million *baseball* revenue last year compared to our roughly $300 million figure cited by Dejan. Their payroll figure, according to Spotrac was $238 million. That leaves $357 million unaccounted for, far more than the $215 million or so spread the Pirates have, if you believe Dejan’s figures. A caution: I have no idea how they sort out the non-baseball expenses associated with running Battery Park. But the Battery Park revenue doesn’t appear to be included in the $595 million figure, according to the Sports Business Journal, as the mixed use development is listed as a separate $67 million dollar figure.
The capital loans they took on to create the development that brings in more revenue ain't gonna pay themselves off!
Assuming the financing for both projects is similar, it would appear that the revenue from Battery Park alone would cover those payments.
I appreciate your point and research. For an article that is centered around revenues, costs and profits, it does a poor job explaining where a large majority of those costs are.
We all know how much they spend in payroll, the fanbase wants to know where the rest of the money goes and why it’s not reinvested in payroll. To write “actually, they’re losing money!” and not explain the mysterious >50% chunk of costs that no one knows about seems ridiculous.
My assumption is that their operations are set up to be profit neutral, give or take a few million on either side. They have enough below the line expenses for Nutting and his investors to offset the incomes they generate/earn elsewhere. This really comes down to how they split the pie and what is most effective recipe to producing a consistent winner.
I think you make a fair point. But at the same time, we can compare the revenues presented, and compare them to the Braves and see that we are getting swamped. Even with a half decade of competitive baseball, I’m just not convinced this market is capable of producing revenues competitive with the Braves.
DK seemingly makes a lot of shit up, and pins it on “sources” when he’s wrong. I’d bet his “independent team” he hired for investigating the Pirates finances was actually just him stealing some of Ethan’s payroll numbers and a handful of off-the-record quotes from Travis Williams.
Remember, Ethan’s payroll numbers are just for the 40-man and player benefits, they do not include MiLB salaries, bonus pool monies for MLB incentives, and roughly $20m in spending on the MLB amateur draft and international amateur free agency.
I agree with AB here, the figures are highly credible. A lot of the revenue figures he cites are publicly available.
His estimates seems reasonable to me, and loans are a simple matter to check. If the team is taking small loans, they are not making money. I find the article credible, even if the source is dubious.
highlights a couple things that don't get talked about enough, namely how much the players bargained in favor of minors in the last CBA.
but don't be naive, every single organization in baseball takes on some amount of debt, i.e. loans. It would be financial malpractice not to.
there's also enough classic Dejan exaggeration of *known* issues to questions his judgement of what's not.
the entire paragraph about the "erupted" spending on amateurs is obviously bullshit. Both north american draft *and* international free agency have been capped explicitly to control costs. You can easily add up the Pirate's known costs for both and conclude they don't spend $26.5m per year.
SI made them look bad, kova not so much. The latter appeared to put a lot of effort in. I haven't read him in a good while
It appears SI relied on the incomplete PG reporting. The PG reported on just revenues versus payroll, with no idea of the expenses in between. Say what you want about Dejan, but the picture he painted is complete.
The PG's articles on this subject over the years have been ridiculous: obviously written by a bunch of journalist types who took every course in feel-goods and none in hard subjects. It takes a special kind of naive to write things like, "can you believe that expenses depend upon revenues? How scandalous!" This was the basic gist of the PG articles that read on the subject: accusing the Pirates of basing expenses on revenues.
Their stories have relied on incomplete financial statements, which I’m guessing were provided to them by a source at SEA.
Their big fixation seems to be on the tie between payroll and ticket revenue, which seems to be a point of dubious value.
Yes... they are fixated on the idea that revenues decide expenses as is the fact of life for every business on earth that does not have an infinite line of credit from Wall Street, London, Brussels, or Tokyo.
I think people really struggle with the fact that these guys, as rich as they are, don’t have unlimited sums of money. They all spend roughly in line with their revenues… even Cohen. And even if ole Bob did decide to take a loan, or dip into the personal funds, he’s still outclassed by guys like Cohen 20 to 1 in terms of net worth.
I used to read him all the time when it was on post gazette. This is the only site I pay for. This is my news channel and social media combined for a great low rate.
https://www.si.com/mlb/pirates/news/new-report-raises-questions-pittsburgh-pirates-financials
The silver lining is that it should focus attention on the team's primary issues. The cheap owner meme is an easy go-to. The bigger problem is FO incompetence and the fact that Nuttin has let a culture develop where losing is perfectly OK.
I've been saying this for years. The Pirates are spending about what I would expect them to spend given their hopeless revenue situation. Even if they had another $10 million or $15 million in player payroll every year for the past 6 years, what difference would it have made? Would 2 more Tommy Phams have improved the team or made it worse?
The problem is not the spending on payroll. The problem is hiring the first guy to call Nutting who has a degree in BS from a New-England liberal arts school (where BS is the only major allowed) to run the team, and then never holding them accountable for on-field results until a bullpen pitcher plays hanky panky with a 13 year old (which, unlike on-field results, is not the fault of the GM).
Their brand is in the toilet, and it is not because they are cheap. They are cheap because their brand is in the toilet. Their brand is in the toilet, because they have been run badly for 30 years. Hire a real GM and start solving the problem!
The additional budget would obviously allow them to attract a class of free agent above the Tommy Pham's of the world.
Whether or not they'd be effective with that additional budget is an open question but don't play dumb.
But they had $20 million last year to spend on free agency and $15 this year. They opted to sign a bunch of guys whom they could have had on split contracts or even minor-league deals. There is nothing to indicate that giving Littlefield $10 million more to play with each off-season would result in anything more than 2 or 3 more Fraziers, Hedges, Phams, and Tellezes every season in place of the Palacioses, Williams, and Rivases.
except for, of course, the 2013 world series champion roster he put together with the help of mid-tier free agent signings that would be in the Pirate's price range with a ~$100-110m roster.
there's a helplessness displayed here that I don't understand.
The Red Sox 2013 middling free agents and in house salaries still came to over a $150mil payroll and adjusted over $170mil. I know apples to oranges. That team had a fairly strong core between 5 and 8 players if I'm remembering correctly that would have been top 3 or 4 paid players on the '25 pirates.
I think my numbers are close, I got to go look it up now lol.
You are helping me make my point. Signing piles of middling, low-tier, or high-risk free agents every off-season is basically what Littlefield does every year whether he is here or in Boston. He got lucky in 2013. That strategy is going to work 1 time in 100. Who wants to wait 100 years for Ben to get lucky again?
Yeah they really need to look at how they are operating. The money isn’t there for them to operate in the manner they wish. For the life of me I can’t figure why Nutting isn’t ganging up with the Rubenstein’s, Monfort’s and Reinsdorf’s of the world to loudly whine and complain for a salary cap?
for the life of you? for the life of you?!
one loosely-sourced article and your brain cannot even fathom *any* reason for why Bob Nutting displays no vested interest in upending the economic framework of Major League Baseball?
Two things can be true:
1.) these numbers appear wholly credible.
2.) Nutting has shown a studied disinterest in change.
Why? I have no idea. Other owners are screaming for a salary cap. These numbers could also be wholly true, and Nutting could be financially benefiting in other ways that we can’t fathom, in which case it wouldn’t matter to him that the Pirates aren’t profitable. But that’s wholly unknown, and it wouldn’t change the fact that the Pirates aren’t a great business, assuming the numbers presented here are true. His article also doesn’t really delve into those aspects.
Don't know if this is optimistic or pessimistic. I'm all in on the Skenes era.. I assume he will be here through his arb years only (last year only if Bucs are competitive). So... assuming pitchers are pitchers if Bucs can have only one TJ a year among their SP depth then if Jones is the one this year so be it. Get it done and come back stronger. Just need Skenes to not need a TJ until he leaves for mega $. From today's report I find a glimmer of hope that it was discomfort not grabbing his elbow etc. However, if he needs TJ go get it done now. I'm warming up to giving Mlod the first shot over the even younger guys if for no reason other than I fully feel MLod as a 'good' starter is still more valuable than turning him into a late inning reliever. If he is showing promise now, let's go for it. And it adds another pitcher to what is very good SP depth Let's go Bucs.
It seems almost certain that Jones will not be on the Opening Day roster. Assuming he is not and Falter my predictions are:
10. Carmen Mlodzinski….100%
11. Pete Strzelecki………….80%
12. Kyle Nicolas………………50%
13. Ryan Borucki……………..40%
——————————————————-
14. Joey Wentz……………….30%
15. Justin Lawrence………..30%
16. Michael Burrows………..20%
17. Tanner Rainey…………….20%
18. Thomas Harrington….…10%
19. Carson Fulmer…………….10%
I have this hunch Mlodzinski or Ferguson will fill the rotation. Nicolas has flashed his high-end potential. I think they’ll keep Borucki over Wentz. I’m not as convinced as most that Harrington is a candidate as he’s not even on the 40-man. Surely not Fulmer, right? Right?!
I agree on Harrington and I am not sure (total guess) that maybe he was still in camp because there was an opening for starter innings when his turn was due vs. some of those sent down. As I just posted, I hope Mlod gets first shot at filling a SP role. If Borucki can be kept in the minors (I forget his out clause) then I might give Wentz the spot if only for depth knowing that somebody will get hurt or under perform. If it is a clear Wentz vs. Borucki and they likely lose the other, I would choose Borucki as you have. For some reason I think they want Lawrence so Nicolas could be the odd man out, but he would be back soon.
I rather see Burrows than Mlod, but I think you are right, agree on Nicolas, I feel that he should be the closer in Indy.
I could easily see all of that happening.
It is easy to identify hits, especially Extra Base Hits, but the game sometimes turns on who can get on base by working a Walk. I have read some negatives or questions about 'Cutch and Pham, but they are team leaders in working Walks. Listed are the guys on the Pirates in ST that are team leaders in the category of Walks to Strikeouts -
Endy Rodriguez - 9 Walks, 3 K's
Enmanuel Valdez - 9 Walks, 5 K's
Tommy Pham - 10 Walks, 7 K's
Andrew McCutchen - 9 Walks, 8 K's
Ke'Bryan Hayes - 4 Walks, 3 K's
Billy Cook - 8 Walks, 9 K's
Joey Bart - 6 Walks, 8 K's
These are the folks who I term "grinders" - they grind out every single AB because they know it is important to help their team. On the other end of the spectrum, players with K/BB numbers 3/1 or 4/1 better be hitting 20+ HR's/yr! And IKF (41 K/3 BB) and BDLC (52 K/4 BB) created a whole new world of futility and embarrassment last year. Glad they unloaded BDLC and IKF is only here again because it would cost too much to get rid of him now.
I like this post, Mel. I've always been a big fan of grinders. Loved the way a Jason Kendall was just so hard to strike out and enjoyed his bats. I love when a guy takes ten or more pitches out of a pitcher in a single at bat. THAT is helping your team.
And despite some low batting averages that are becoming common these days as pitching leaps ahead, I'm always a fan of a guy hitting .240 but his on base percentage is .350.
Brings me back to Moneyball... "He gets on base."... (A movie I can watch at any time when I come across it.)
Your list there is one that gives me comfort, esp when looking at Pham, who we acquired for SOME reason, right?
I know Cutch's eye is fantastic. Give that guy a challenge and it'll be a game changer for him. Really happy to see Endy, the switch hitter, leading the parade. Makes me wonder what the Bucs are gonna do at Catcher.
I would love to see them keep all three and rotate a guy or two into first base (endy can play second) so they can keep their catchers fresh all season. To me, athletes get injured when they're fatigued. Imagine having Hank, Bart and Endy...
When HR's became what everyone was looking for, the number of strikeouts and strikeout rates were overlooked. I'm no different - give me a kid who can hit 20+ HR's in 400 AB and I'll take a 3/1 K/BB.