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Report: MLB recorded record revenues in 2013

Dec 17, 2013, 5:05 PM EDT

Money Bag

Maury Brown of Forbes reports that Major League Baseball’s 2013 revenues will exceed $8 billion. Which will be an all-time record. And that next year, thanks to new TV revenues coming online, the figure could approach $9 billion. By way of comparison, revenues were at $1.4 billion in 1995, the year after the baseball strike.

Not bad for a sport that everyone likes to talk about as dying and antiquated and not tuned in to the modern mindset and all of that jazz.

  1. alang3131982 - Dec 17, 2013 at 5:08 PM

    Maybe baseball players (including the multi million dollar a year players) are actually underpaid? Not just Mike Trout.

    • Reflex - Dec 17, 2013 at 5:27 PM

      The rapid rise of salaries over the past decade strongly implies that is the case. Its also part of why the Pujols, Hamilton and Cano contracts are not nearly as bad as the detractors claim. We are in a period of salary inflation, by the mid-point the annual amounts will seem reasonable, by the end in at least one case the athlete will seem underpaid, and in the other two, only slightly overpaid(no idea which, but one of those three should have a unexpectedly strong late 30’s career).

      • dcfan4life - Dec 17, 2013 at 6:53 PM

        You both are missing some major points when referencing salaries in MLB. First off, unlike every other major sport, there is no salary cap. Just a luxury tax which is so high that only the Yankees I believe have ever exceeded it. Second, teams play 162 regular season games a year, around double the next highest sport. Every game is televised, with sponsors and the whole works. Hence the huge tv deals. But that also factors into money per game scenarios. Look at some of the higher paid athletes in each sport and what their paid per game.

        Lebron James – $19,067,500 a year, $232,530.48 a game
        Alex Rodriguez – $29,000,000 a year, $179,012.34 a game
        Sidney Crosby – $12,000,000 a year, $146,341.46 a game
        Tom Brady – $13,800,000 a year, $862,500 a game

        Now every player has bonuses and incentives, but these are base salaries except for Bradys since football has the signing bonus guaranteed but not much else. Basketball and Hockey have some guaranteed money too. However MLB the entire contract, every dollar, is guaranteed. So even tho on average the highest paid MLB player, Arod, makes less per game than most top counterparts in other sports, he does however get paid every dollar regardless of performance, health or anything. He gets it all. So to say MLB players are underpaid is ludicrous with such contract structures. Sign on the dotted line, never get another hit in MLB and you still make every dollar. Tell me, how is that being underpaid?

      • gibbyfan - Dec 17, 2013 at 7:45 PM

        Yes, but I would much rather suffer the ‘rigors’ of a 162 game schedule than play 16 with the biggest, strongest atheletes on the planet potentially trying to do me serious physical harm on virtually every play………even more so now that even the catchers are protected (which they should be)……..yup–rather have AROD’s job than Brady’s

      • dcfan4life - Dec 17, 2013 at 8:11 PM

        Id rather have a 100% guaranteed contract any day of the week. Football your out on the street as soon as you blink.

      • Reflex - Dec 17, 2013 at 8:54 PM

        In this context, ‘underpaid’ is relative to available league wide revenues. In other words: Given how much the sport is raking in, do the athletes who actually put their health on the line to generate that revenue receive the correct percentage of that revenue for the risks they are taking?

        In a larger sense, no, athletes do not contribute millions of dollars of benefit to society. That said, neither do team owners or executives. Given that, if the money is there I’d rather see it go to those who do the actual work on the field. If you stopped paying the athletes that money it is unlikely the revenue would go away, it would just increasingly go into the pockets of the already ultra rich owners.

      • detectivejimmymcnulty - Dec 17, 2013 at 9:27 PM

        The Angels signed a TV contract for $3 billion over 20 years after signing Pujols and WIlson. They already won those contracts before they ever showed up for Spring Training.

      • Reflex - Dec 18, 2013 at 1:55 PM

        Absolutely agree. People who think the M’s overpaid for Cano are ignoring the business aspect: The M’s are in the midst of negotiations with Root for cable rights. Signing Cano undoubtedly raised their eventual take beyond what they paid for his contract. In effect they got an elite 2B for ‘free’ for a decade. The Angels got Pujols free for similar reasons. The same thing occurred with the first A-Rod contract for the Rangers, they signed him and then followed up with a tv deal that more than covered his contract(beyond what they had been paid for tv rights prior).

        TV deals are dramatically reshaping the financial landscape of MLB, and make a lot of the supposedly bad contracts incredibly smart investments. Spend $240M/year on Cano and get nearly twice that back from Root Sports? Yes please!

      • Reflex - Dec 18, 2013 at 1:56 PM

        Er, obviously I meant “$24M/year on Cano”….$240M/year would really be shocking…

  2. RedHeadedBastard - Dec 17, 2013 at 5:26 PM

    Baseball > Football

  3. El Bravo - Dec 17, 2013 at 5:31 PM

    Pie > Cake

    • historiophiliac - Dec 17, 2013 at 5:34 PM

      Bread Pudding
      ___________

      Pie > Cake > Cobbler > Cookies > Ice Cream > Yogurt

      • cohnjusack - Dec 17, 2013 at 5:40 PM

        You lost me at cobbler.

        Seriously lady, get your life together.

      • historiophiliac - Dec 17, 2013 at 5:46 PM

        Whatever, Communist. To the corner with you and your “people’s pleasure”! The crust is on top. It’s unnatural.

      • sportsdrenched - Dec 17, 2013 at 5:45 PM

        If a cobbler was cooked in a Dutch Oven, it wins.

      • bh192012 - Dec 17, 2013 at 6:28 PM

        I don’t think shoemakers taste very good at all. Dutch or not.

      • roanboon - Dec 17, 2013 at 8:39 PM

        I feel guilty saying this with Paperlions and others having an intelligent conversation about the subject matter at hand, but I just gotta say it:

        Cobbler < Pandowdy < Grunt

  4. sportsdrenched - Dec 17, 2013 at 5:33 PM

    I’d have to a little more research, but I beleive that this is the 2nd year in a row MLB has closed the gap on the NFL in revenue. But tell anyone at PFT that. Their heads might explode and Cur would have to go clean it up.

    • dcfan4life - Dec 17, 2013 at 6:54 PM

      Cant make that assessment since the NFL season is still going and they havent reported their revenue yet. Have to wait until what, April to find that out.

  5. paperlions - Dec 17, 2013 at 5:42 PM

    A smaller portion of revenues are spent on player salaries in MLB than in any other major sport in North America. Other sports are at 50% or more. MLB is at 42%.

    • 18thstreet - Dec 17, 2013 at 5:47 PM

      Wow.

      What portion of MLB revenues are spent on maintaining the minor league system, or scouting internationally? The other major sports don’t have to spend money there. Well, I guess hockey does. (Insert hockey joke. Good.)

      Still pretty amazing.

      • paperlions - Dec 17, 2013 at 5:54 PM

        No idea. That may account for some differences, but probably not more than 1%. Many teams don’t own many of their MiLB teams (all own their GCL teams), and many MiLB teams make money, so while there are expenses, there are also profits that are not reported at the MLB revenue level. NBA has a D league now. NHL has a minor league system, not all teams there are owned by the parent club, but most of those I think also make money. Lots of international scouting in hockey. I’m sure there are some differences in development expenses, but not enough to make a dent in $9B in revenues. NFL may have much much higher insurance/medical premiums.

    • pepperallowed - Dec 17, 2013 at 8:37 PM

      This isn’t true. The NFL/NFLPA is a 53/47 split. However, it’s a bit of creative accounting as the owners get 1.5% of the revenues first to put toward stadiums.

    • Reflex - Dec 17, 2013 at 9:09 PM

      I do not doubt you, you usually back up your assertions, but where are you getting your numbers? Last I read on the topic baseball had the highest portion towards player salaries of major sports. But that is likely out of date since I read that a few years ago and several major tv deals have been signed since…

  6. vanmorrissey - Dec 17, 2013 at 5:50 PM

    That being said, can’t the teams lower their prices, even a little? They’re awash in money and I get it, its a business, but throw the fans who attend the games something back.

    • spudchukar - Dec 17, 2013 at 6:35 PM

      Dude, are you high? This is America. All those bean counters with Business degrees, are rolling on the floor in laughter. Give something back? Appreciate the Fans? Ah hah, hah, hah, hah, hah. Tell me another one.

    • Gordon - Dec 17, 2013 at 7:44 PM

      Only way prices will come down is if a lot less people go to the games. That goes for all of the major sports. Why would they lower prices if they can keep raising them without a negative impact on revenue & profit?

      There are obviously a ton of people still going to games. It would be interesting to see how that revenue growth happened: More people going to games? Ticket price increase? More non-ticket revenue (food & beverage, parking, souvenirs, TV rights)? All of the above?

      There’s no obvious incentive to lower prices, as nice as that would be for families.

    • gibbyfan - Dec 17, 2013 at 7:49 PM

      It’s all about the money and free markets Van……. they will give something back to the fans when the fans take something back from them………while the fans continue to give they will continue to take

    • Kevin S. - Dec 17, 2013 at 10:40 PM

      Why should they? Hell, that won’t even lower the price for the casual fan, because demand is so high that the scalpers will just get the difference on the secondary market.

  7. righthandofjustice - Dec 17, 2013 at 5:52 PM

    What are the operating incomes of these teams? If revenue is up but spending is up more then it is not a very good sign.

    Let’s look at an example from the same Forbe magazine a few month ago:

    As of March 2013, Forbes valued the Yankees at $2.3 billion with a 2012 revenue at $471 million. However, their operating income is only a truly pathetic $1.4 million. A bottom line of only a million doesn’t look like a bargain for potential investors who are willing to shell out more than $2 billion dollars for the company.

    • Joe - Dec 17, 2013 at 6:34 PM

      Sports team accounting is really opaque. I believe the Yankees offload some revenue by granting below-market rights to YES, which they also have ownership of. It’s also helpful to know the salaries that Hal and Hank and any other owners are pulling down. And I think they have a weird way of amortizing player contracts that never made sense to me (may not apply to the Yankees).

      Regardless, the business value is determined by the amount of cash that is available to the owners. For the Yankees and probably everybody else, that’s a lot more than their Operating Income.

  8. chacochicken - Dec 17, 2013 at 6:45 PM

    MLB is building the largest, most opulent mausoleum in history.

    • ptfu - Dec 17, 2013 at 6:51 PM

      Yep. “Baseball is Dying” ™

      • chacochicken - Dec 17, 2013 at 6:57 PM

        Interesting that it seems to be said by fans of the NFL which is in the midst of the concussion crisis that will likely only get worse and appears to be a significant future detriment to the sport.

      • jamie2141 - Dec 18, 2013 at 9:29 PM

        Nice one ! Isn’t amazing how “Baseball is Dying” never dies no matter what evidence there is to the contrary – it must fall under the Colin Cowherd rule to never let the facts get in the way of an opinion.

  9. moogro - Dec 17, 2013 at 11:07 PM

    This may resemble a bubble if people decide to unplug their cable TV sports subsidy.

  10. mottershead1972 - Dec 17, 2013 at 11:38 PM

    my one year old will play baseball, not football… more $$$ and nobody trying to kill you…

    • davidbrentfan - Dec 18, 2013 at 2:43 AM

      Do you think that your 1 year old actually has a reasonable chance of making it as a professional baseball player?

      Hahahahahaha.

      I don’t think you should have your 1 year old play baseball instead of football or another sport due to salary considerations…

      • churchoftheperpetuallyoutraged - Dec 18, 2013 at 8:18 AM

        My 19mo old isn’t playing football because he’s not going to give himself brain damage. It’s not just the pro’s who are suffering from CTE as a complication from multiple concussions, it’s college and high school kids as well.

  11. km9000 - Dec 18, 2013 at 12:48 AM

    The thing that gets me isn’t the average MLB salary (which apparently is $3M+). It’s how much the highest paid guys get in a sport where its elite, like Cabrera, Trout, McCutchen, and Kershaw haven’t recently been to the WS. They can’t carry their teams like in the NBA.

    And even if Pujols, Cano, and A-Rod performed like they get paid to, that alone wouldn’t make their teams surefire contenders for the next couple years.

    • historiophiliac - Dec 18, 2013 at 9:31 AM

      Um, Cabrera went to the WS in 2012…the same season he won the Triple Crown. Just saying.

  12. chumthumper - Dec 18, 2013 at 10:25 AM

    We all know, of course, this will not keep the owners from shaking the tin cup looking for handouts.

  13. keltictim - Dec 19, 2013 at 4:59 PM

    So revenues are rising yet people will still talk smack about selig and “want him out of the way”. Sure seems like he’s doing a good job to me if the money keeps going up.

  14. pastabelly - Mar 26, 2014 at 12:46 PM

    So, maybe $14.1M really isn’t enough for Stephen Drew? :)

    Hard for me to feel badly for baseball players when freaking colleges are making $billions on college football players who are paid nothing other than tuition, books, and room and board. Now that’s a joke.

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