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Financial documents show Pirates could spend more

Aug 23, 2010, 9:35 AM EDT

The Associated Press published a round of documents late Sunday night that show the Pirates, on the verge of their 18th consecutive losing season, are still a highly profitable franchise and have been profitable for many years. According to the documents, which are now on full display over at...

The Associated Press published a round of documents late Sunday night that show the Pirates, on the verge of their 18th consecutive losing season, are still a highly profitable franchise and have been profitable for many years.

According to the documents, which are now on full display over at Deadspin, the Bucs made an income of nearly $29.4 million in 2007 and 2008 thanks to sources like revenue sharing, television packages, MLB merchandise and the MLB.com website. 

That’s not a major sum of money for most professional franchises and it shouldn’t be all that surprising, but the Pirates have operated on a very meager payroll for ages and it certainly appears that they could be spending more.

“The numbers indicate why people are suspecting they’re taking money
from baseball and keeping it — they don’t spend it on the players,” David Berri, president of the North American Association of Sports
Economists, told the Associated Press. “Teams have a choice. They can seek to
maximize winning, what the Yankees do, or you can be the Pirates and
make as much money as you can in your market. The Pirates aren’t trying
to win.”

The Pirates had baseball’s lowest Opening Day payroll this season — $34.9 million — and are at the very bottom of a bad National League Central division.  If anything, perhaps the revelation of these documents will put pressure on the Pittsburgh ownership to lock up young cornerstone players like Andrew McCutchen and Pedro Alvarez when it comes time for free agency.  Making owners cringe can be a good thing.

  1. BC - Aug 23, 2010 at 9:58 AM

    Sad commentary on the Pirates – the left side of the Yankees’ infield makes more money than the entire Pittsburgh team.

  2. Jonny5 - Aug 23, 2010 at 9:59 AM

    Well, this is a growing problem in the game as i see it. Pro baseball Teams built to turn a profit, With really no care to win. Doesn’t this kind of contradict the entire premise of the game? Sure, it’s a great thing to turn a profit, but to ignore the object of the game (winning) just to ensure you turn a profit is a problem imo.

  3. Chipmaker - Aug 23, 2010 at 10:03 AM

    There’s a North American Association of Sports Economists? Wouldn’t that just be Maury Brown and Andrew Zimbalist knocking back some draft beers in a bar?
    .
    I can just see the drinking game — watch Congressional testimony and every time there’s a blatant lie or fudging of figures, drain your mug. No one makes it past the first witness.

  4. BigBlueAmazinFan - Aug 23, 2010 at 10:48 AM

    So they made $29.4 million in profit over 2007 and 2008. Their payroll is $39.4 million so if you add $15 million to that what are you going to get? Why not take the money if you can make it? I wouldn’t dump a dime into the team if I could make money off a loser. You can’t even get 1 quality player for $15 million a year and 1 player isn’t going to make you a winner. That being said they would have to spend more than they make to field a winner. They are better off building their farm system and trying to win that way. Other teams can do it why not the Bucs?

  5. Old Gator - Aug 23, 2010 at 10:56 AM

    I was about to write something along the lines of, “as long as the big market teams continue to tolerate these small market parasites stuffing their pockets with luxury tax money instead of using it for the purposes it was intended for – ie, to help the smaller markets sign and keep quality ballplayers and assure a reasonably level degree of competition…etc.”
    .
    But then I had one of those “duhh-uhh” moments and it occurred to me, hell, that’s how the big market teams assure themselves that there’ll always be doormat teams on whose carcasses the big guys can fatten their records every season and maintain their competitive advantage despite shelling out all that luxury tax money. They can watch EYPs rise up from the drafts to the show through the ranks of the poor deprived hick town teams like the Pyrites and the Feesh, then harvest them when their arbitration eligibility or free agent status makes them a financial inconvenience for their little brothers in the hinterlands. This is hip capitalism at its finest.
    .
    The fans? Did someone ask what about the fans? Who are the fans, anyway?

  6. birdmancometh - Aug 23, 2010 at 10:59 AM

    Thats actually a good point, which is surprising since you are aparently a Mets fan. Spending 15-20 mil more $ would not assure the bucs of a winner. What they need to do is stop being idiots. You can win with low payrolls. Just look at the Pads, they’ve won a good percentage of the NL West titles in the past decade. A low-payroll team can’t build a dominant lineup, but it can be fairly inexpensive to field a good defensive club and a good bullpen. Those two things will keep you out of the cellar.

  7. Detroit Michael - Aug 23, 2010 at 10:59 AM

    It’s hard to get agitated given that the Pirates have not been just 1-2 good players away from making the playoffs. They’ve got to get a crop of good prospects before it’ll do much good to expand the major league payroll.

  8. David - Aug 23, 2010 at 11:10 AM

    MLB teams are not a public trust, they are in fact private for profit ventures. 14 million profit on 140 million gross revenue is a healthy profit margin, but hardly outrageous. And as much of a benefit as payroll can provide, a low MLB payroll is not evidence of no desire to win.

  9. Secretary Cleary - Aug 23, 2010 at 11:36 AM

    Looks like the investment is working out well for the Nutting’s and their fellow investors. This is the template employed in Florida and other small markets (mediocre team + complaining about unfairness of the system + new revenue sharing = big profits with continued mediocrity on the field). Granted, Florida has a lousy stadium, but they seem to be the best performers and player development mill of the small markets, along with one of baseball’s most profitable teams, per Forbes.
    Now Pittsburgh received it’s beautiful ballpark and revenue sharing after complaining about the injustices of MLB parity. This has just been a horribly run franchise since Bonds left. At least they are raking in $29m a year, if not a lot more.

  10. RichardInBigD - Aug 23, 2010 at 11:44 AM

    The Pirates, if they want to use that money to actually win, and are willing to go through a 4 ot 5 year process to do it, should spend some of that profit on a good GM, and a more discerning scouting operation. If you’d like to see an example, see Jon Daniels and the Rangers. He took a bankrupt owner in a town that had become very ho-hum about their team, and over the last 6 years has turned this thing into what would appear to be one of this years top contenders for the big prize. The GM has to be someone that’s truly tuned in to what’s going on in the big world of baseball, but doesn’t let the usual convention get in his way of getting the desired result…

  11. BigBlueAmazinFan - Aug 23, 2010 at 11:46 AM

    Being a Met fan is not easy! They continue to spend on guys who don’t help and trade away quality young guys. The worst part of it is that they turn around and trade new young guys to get the old guys that they traded away back when they can’t play anymore!

  12. Jonny5 - Aug 23, 2010 at 11:52 AM

    Dude, stick the Private enterprise you know where. I am aware of this, or there would be no profit. And I am also aware that low payroll does not mean no will to win. It just shows that some teams put winning above profit more so than others do. The pirates are notorious for unloading good players just to keep salary low. They are notorious for losing, yet they turn a higher profit than the Phillies do, who if you havent noticed, sell out every game, and have 20 times the merchandise sales. The Phillies ownership has a different idea of how much money should be profit ,and how much should go to building a team. If I were a Pirates fan I would want their ownership lined up and shot.

  13. John_Michael - Aug 23, 2010 at 12:37 PM

    In related reasoning, unemployment benefits provide an incentive not to find a job. Same thing, just bigger numbers in MLB.

  14. BleedGreen - Aug 23, 2010 at 1:33 PM

    If you’re making money hand over fist while having 18 straight losing seasons, whats the incentive to spend more money to win?

  15. David - Aug 23, 2010 at 3:59 PM

    If you honestly believe that the Yankees make less in profit than the Pirates, I have a bridge to sell you. And in case you failed to notice, profit in 2009 was about 5 mil, well under 5% of gross revenue. And based upon reports, those profits for the past few years haven’t been pocketed by the ownership group, but reinvested. There was nothing in those financials anywhere near as suspect as any of 10 things that have come out in the McCourt divorce. Its fairly plain to see that the new ownership of the Pirates is attempting to build a winner in the only means available to them – and that means currently spending as little as possible on the MLB level.

  16. dprat - Aug 23, 2010 at 4:22 PM

    Huh? Don’t know what Scandinavian country you work in, but in my state max. unemployment amounts to less than 25% of my salary. Yeah, I sure hope I can manage to get myself laid off (an all too real possibility right now), so I can just live off that sweet, sweet dole.

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