Tuesday, December 20, 2005

There's That Funny Number Again

Tacked on to the bottom of Barry Bloom's MLB.com piece about the Nationals lease charade, is a strange little number that keeps popping up: $30 million dollars of profit:
Until then, the team will continue to play at aging RFK Stadium where it sold about 2.7 million tickets this past season and reportedly made a profit of about $30 million. Emphasis added, of course.

That's roughly the same figure that AJ Burnett's agent cited a few weeks back when blowing off the Nationals for the big dollars in Canadia:
"With this club, we had to be more thorough more than anything, because we knew there was a possibility that A.J. might say he wants to play for the Nationals -- because of Karen, the fact that they drew 2.7 million people last year and made $32 million," said Braunecker. "That is a club that is going to have a lot of financial resources going forward."

Yet the figure that they've leaked to the press is $10 million. Supposedly that figure is the after-tax profit, but why cite the $30 million figure if that's not how much the team is really making? Is the $20 million ga(a)p between the two figures just a paper loss? Isn't it more politically expedient to cite a mere $10 million figure when you're asking a city to pay over half a billion dollars for your stadium? Just askin'....

I've written before about how MLB's numbers are always funny. (And politically charged!) Mid season, they released some revenue projections that didn't pass the smell test when you crunched some numbers regarding the media contracts, and the large increase of tickets from Montreal to DC.

Obviously I'm just speculating here. I haven't seen the balance sheets -- and even if I could see them, there are ways of shuffling around things to obfuscate the truth.

Just know that you need to take everything MLB says in terms of profits and loss with a grain of salt. There's no incentive for them to be completely honest, and, in DC's case, there's probably a big disincentive.

2 Comments:

  • The $30-million figure is (I believe) the Nats' EBITDA for their last fiscal year. Companies, not just MLB, often use EBITDA as a metric (one of many) for measuring profitability.

    By Anonymous Jeff, at 12/21/2005 12:21 PM  

  • Thanks for clarifying that. I suspected that that was the case -- hence the lame GA(A)P joke in the middle.

    But the way depreciation is done with major league teams is silly -- they can actually depreciate the players!

    So much of the difference between the two figures occurs only on paper, right?

    The $30 million figure is probably closer to reality than the $10? Or am I completely misreading things?

    By Blogger Chris Needham, at 12/21/2005 12:24 PM  

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