Baseball Teams Lost Half a Billion, Selig Says

New York Times ^ | 12/6/01 | By RICHARD SANDOMIR

[Fulbright]

Re: Selig's contract extension.

Tom Powers in the St. Paul Pioneer Press said it best: Democrats vote for Democrats, Republicans for Republicans and blunderers vote for blunderers.

[AGreatPer]

Since I live in Harrisburg, PA, I am 4 hours from Pittsburgh and New York, 2 hours from Philly and Baltimore. I have turned down at least a dozen FREE tickets this past year. That is what I think of baseball today.

Oh Yea, God Bless Bill Mazeroski, Jerry Luncy, Hal Smith and all of the others that beat the Yankees in the greates series of all time..........1960.

[John H K]

It's exceedingly illegal for the owners to collectively decide to cut player salaries. They tried once before and had to pay enormous fines.

[engrpat]

For several years my wife and I had weekend season tickets to the Oakland A's. We stopped going several years ago when the whole salary thing got out of control. I now live in Arlington, TX and will not go to the ball park to watch some way overpaid kids play ball and charge me a price that is way out of line for the product.

[daniel boob]

Cut salaries by 50% and the collective loss would only be a more reasonable $500 million.

[daniel boob]

oops!

$250 million.

Sorry, I'm a product of the public schools system.

[WesternPacific]

The "Fans" have never returned after the Big Strike a few years ago.

The players and owners, alike, have done everything imaginable to ruin this game and the fans have not forgotten.

[nikola]

Are you saying that the owners could pay salaries such as ARod's if the price tickets weren't so high? It's a cycle that has to be broken.

[Torie]

Let me help everyone with this. The reason baseball loses money is that it is a glamour hobby business. Rich folks own the teams for the fun of it, i.e. the psychic income. Owning a winner generates even more psychic income, and thus the overpayment of player salaries. And that income is not on any balance sheet. Which only goes to show that it is nutso for public companies to own teams, unless they are viewed as a perk for the execs.

If you want to make money, as in money, own an anti glamour company, like a toxic waste dump.

[James R. McClure Jr.]

Peace be with you all,

My question is, if all these teams are losing all this money, why aren't the 'poor' owners unloading these moneypits?

James R. McClure Jr.
Anti-Federalist Democrat

[John H K]

Ticket prices are set to give the owners maximum revenue. They are NOT set to cover owner expenses.

For example, a team could charge an average of $1000 a ticket. They'd likely have only 100 fans at the game for a given night, and only collect $100,000 dollars.

If they charged $1 a ticket, the stadium would be full, but they'd only collect $45,000 that night.

Somewhere in-between the above two, there's a ticket price point where they maximize revenue in terms of (ticket price) x (number of fans) = (revenue.) THIS IS THE ONLY CONSIDERATION IN SETTING TICKET PRICES. Ticket prices are based ENTIRELY on what people are willing to pay.

As are concession prices. Concessions are complete monopolies. The price of a hot dog is set at the point where they make the most money; the price of a baseball stadium hot dog is NOT set based on the cost of meat and buns. There are enough people willing to buy a $5 hot dog that those high prices maximize revenue. They could sell more hot dogs at a lower price, but make less money, or charge even higher prices for hot dogs and sell fewer, and make less money.

Owners do NOT say "well, we are paying X dollars in salaries, we need to charge X amount per ticket to pay for those salaries."

Though when a team raises ticket prices, they like to put out press releases where they claim it's necessary because they re-signed Joe Blow to a huge new contract...this is simply a blatant, out and out lie to fool gullible and naive sportwriters and fans who don't have the slightest idea of baseball economics.

If some federal law was passed limiting the maximum baseball player salary to $100,000 dollars a year next year...the owners wouldn't cut ticket prices at all. Why should they? If an owner has 90% of tickets sold at a given price in a year, then he has 1/10th the player salary expenses the next year, what possible motivation does he have to lower ticket prices? Absolutely none. All that would happen is the Owners would pocket the money "saved" by lower player salaries.

[Cap'n Crunch]

Funny they didnt mention the Indians in the profit category, it's still nearly impossible to get tickets.

Too bad the Expos are going under, I had heard the Indians were going to play them next year and I was planning a trip to Montreal. Oh well, Toronto's closer.

[doctor noe]

Horse hockey!

[KLT]

Hmmmmmm. What's wrong with this picture, Virago? Something smells to high heaven. Sounds like we're being prepared for a big announcement, don't you think?

[NYCVirago]

Are you saying you believe these figures? Glamour business or not, these figures are clearly bogus.

[NYCVirago]

Hmmmmmm. What's wrong with this picture, Virago? Something smells to high heaven. Sounds like we're being prepared for a big announcement, don't you think?

I've heard of one pending big announcement, something about Jason Giambi signing with the Yankees, but that's not really related to the subject at hand.

[July 4th]

Selig has got to be a DemocRAT, the Lying Stinking piece of dreck.

Do you know who his college roommate was?

[floriduh voter]

Bud Selig has been the baseball commissioner forever it seems. Why? How exactly is he pleasing the owners wherein they keep him to infinity? He's their puppet and seems to me that the owners want somethin' so Mr. Selig goes to Washington. Do they want a bailout now? Are they looking for baseball welfare?

[habs4ever]

A public company could own a b-ball team to capture tax loss carryforwards.It would be a natural for very high ROE companies, namely in software, that have clean balance sheets and cash, to buy one.But, it makes more sense for it to be a broadcaster or cable network that needs product, or software,to broadcast.Many beer companies have owned teams for years, as a way to cross market, except it depends on winning to be a success, and when a team slips, like the Montreal Canadiens have done, then those wonderful synergies go too.Its hard to make a case for this as a business when 80% of revenues is allocated to payroll.And those who scream that owners wouldn't pay this money unless it wasn't worth it, have never heard of the greater fool theory.

[jackbill]

Do you know who his college roommate was?

No. Do you? Share it with us.