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 Post subject: Re: A.J. Burnett Will Pitch in 2014
PostPosted: Fri Jan 31, 2014 4:14 pm 
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StarlingArcher wrote:
mjdouble wrote:
StarlingArcher wrote:
Good luck charging big city prices in Pittsburgh.

There's a reason media rights is the most predictive aspect of what a team's payroll will be.

Simply an opinion with no real basis. The Phillies have run huge payrolls with relatively modest media rights.


And the Phillies are a massive market team with Media Rights and Sponsorships that are already 20% higher than the Pirates' BEFORE their new deal kicks in. So, yay, we found an exception in one of the biggest markets in the sport.

Right now our 3rd biggest source of revenue is revenue sharing (we wound up with a 35M net gain, 3rd biggest in baseball). So sure, let's get gate receipts into the top 20 or so (so move up 5 spots). Where does that leave us in revenue sharing now?

I could not care less about what other teams do because other teams aren't in the Pirates' situation.

When you're the 3rd biggest market in baseball, you can't be compared to a city roughly 1/5 your size. Especially when the city's not particularly wealthy and doesn't have much of a track record for passionate fanbases. Way too fickle and fairweather.

For the life me I don't understand why people believe there is a disincentive to growing revenues. There is not. It shows a complete lack of understanding of how revenue sharing works. If the Pirates grow revenues $10 million their net revenue share will shrink only fraction of that. There is still great incentive to grow revenue.

If you don't want to compare to the Phillies then compare with the Cards. Similar market size. Similar media deals. They can support much higher payrolls because they sell out and can charge a high price on tickets. No, the Pirates will never get to that. But they still have a lot of revenue growth potential. And higher revenues should support much higher payrolls. I agree top 20 would be difficult to maintain for long. But they certainly can go higher than where they are and have been.


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 Post subject: Re: A.J. Burnett Will Pitch in 2014
PostPosted: Fri Jan 31, 2014 5:15 pm 
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There's not necessarily a disincentive, there just isn't some massive benefit to it. You would be paying more in, getting the same back, and effectively only keeping 2/3 of your revenue increase. Unless you get a sweetheart media deal that makes a portion of the revenue untouchable (like the Phils). A 50% increase in gate receipts would net the Pirates about 13M more. Not a great increase in revenue, and that's with an increase that's not likely to be achieved.

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 Post subject: Re: A.J. Burnett Will Pitch in 2014
PostPosted: Fri Jan 31, 2014 5:23 pm 
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StarlingArcher wrote:
There's not necessarily a disincentive, there just isn't some massive benefit to it. You would be paying more in, getting the same back, and effectively only keeping 2/3 of your revenue increase.


Your numbers are WAY off. And "lots more money" is always a "massive benefit." The Pirates would keep much more of their revenue than you're projecting, especially given that MLB doesn't reconfigure its revenue-sharing on a year-by-year basis.

StarlingArcher wrote:
Unless you get a sweetheart media deal that makes a portion of the revenue untouchable (like the Phils). A 50% increase in gate receipts would net the Pirates about 13M more. Not a great increase in revenue, and that's with an increase that's not likely to be achieved.


Again, your numbers are way off. St. Louis doesn't have a sweetheart media deal and yet the Cardinals spend a lot of dough. How does that happen?


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 Post subject: Re: A.J. Burnett Will Pitch in 2014
PostPosted: Fri Jan 31, 2014 5:43 pm 
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The Pirates last year had 39M in gate receipts. 50% increase would be around 20M. Teams pay in 34% of revenue. Pirates would pay in approximately 7 million of their 20 million increase get nothing back additionally from revenue sharing.

Now, we never have to worry about that because we won't see a 50% increase, but that's the general gist. Philly's new TV deal for 2016 gives them 100m that revenue sharing can't touch. That's a bigger deal than an increase in ticket sales.

As for St. Louis, they pretty much double our sponsorship and concessions right off the bat. Then it's an infinitely better baseball town. And, they have a comfortable cushion on the Pirates in media rights.

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 Post subject: Re: A.J. Burnett Will Pitch in 2014
PostPosted: Fri Jan 31, 2014 5:49 pm 
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FWIW, I did a back of the envelope calculation using ESPN's 2013 attendance figures and this source for average ticket prices and came up with a $17,695,221.30 difference in total ticket revenue between the two clubs (with St Louis on top). I'm sure parking, concessions, etc... push that to $20MM+.

Now, that doesn't explain the entirety of the $50MM difference in 2013 opening day payrolls for both teams but it does give some insight.


Last edited by JollyRoger on Sat Feb 01, 2014 12:02 pm, edited 1 time in total.

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 Post subject: Re: A.J. Burnett Will Pitch in 2014
PostPosted: Sat Feb 01, 2014 10:20 am 
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StarlingArcher wrote:
The Pirates last year had 39M in gate receipts. 50% increase would be around 20M. Teams pay in 34% of revenue. Pirates would pay in approximately 7 million of their 20 million increase get nothing back additionally from revenue sharing.

Now, we never have to worry about that because we won't see a 50% increase, but that's the general gist. Philly's new TV deal for 2016 gives them 100m that revenue sharing can't touch. That's a bigger deal than an increase in ticket sales.

As for St. Louis, they pretty much double our sponsorship and concessions right off the bat. Then it's an infinitely better baseball town. And, they have a comfortable cushion on the Pirates in media rights.


This is simply not true. The Phillies deal includes $2.5 billion over 25 years in rights fees, all which is subject to revenue sharing. That equates to $100 million per year. However, it doesn't start at $100 million. It actually starts at $65 million and gradually increases each year. In addition, The Phillies also fall under the supplemental revenue sharing. They have to share an additional percentage of revenues beyond the 34% base rate. So I guess in Starling Archer's mind the Phillies should pass on that $30 million bump in TV revenues in 2016 because they are only netting $18 million after paying into revenue sharing.

It is true the Phillies did forgo some guaranteed rights fees for an ownership stake in CSN, and that does not fall under revenue sharing. Perhaps they could have gotten an additional $25-50 million per year had they just settled for the cash. Scott Boras made a claim that the ownership stake might be worth as much as an additional $100 million a year, but I don't buy that at all. Not exactly an unbiased source. Frankly, I don't think these ownerships stakes in the regional sports network provide teams a ton of cash. They get a cut of the profits, and that can greatly vary. If we ever fall into another recession they could actually lose money in some years. And it is very likely the next CBA will address ownership stake in RSN loophole. I think the real value in an ownership stake in an RSN is the additional valuation it provides to a franchise.


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 Post subject: Re: A.J. Burnett Will Pitch in 2014
PostPosted: Sat Feb 01, 2014 1:40 pm 
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I would say, by and large, Scott Boras (and Yahoo) would probably have a better grasp of things than the people here who are doing mental gymnastics to convince themselves that the Pirates have all of this money hidden away that they refuse to use.

My point was never that growing revenues was bad. My point was that even if we reach an unrealistic level of gate receipt increase, it would make a rather minuscule difference in the big picture so spending expectations shouldn't change based on increased support.

Pirates would've needed to average 13,000+ more per game to equal a team like New York or St. Louis. And since that's not physically possible, that means they'd need to hike prices up significantly. I spent 20+ years in Pittsburgh, it's about as price sensitive as you can get (which is fine, you don't have a large population of rich folks willing to spend big).

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 Post subject: Re: A.J. Burnett Will Pitch in 2014
PostPosted: Sat Feb 01, 2014 3:33 pm 
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StarlingArcher wrote:
I spent 20+ years in Pittsburgh, it's about as price sensitive as you can get (which is fine, you don't have a large population of rich folks willing to spend big).


The Penguins have currently sold out over 300 straight home games with an average ticket price of $147 dollars. Pittsburgh will pay to support a winner.


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 Post subject: Re: A.J. Burnett Will Pitch in 2014
PostPosted: Sat Feb 01, 2014 3:51 pm 
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Dr. Phibes wrote:
The Penguins have currently sold out over 300 straight home games with an average ticket price of $147 dollars. Pittsburgh will pay to support a winner.

(1) For how many games?
(2) For how many seats?

If the Pirates played 41 home games, and had a stadium with 16,000 seats, and were coming off numerous consecutive playoff seasons, then the analogy would make sense.

They don't, they don't, and they aren't so the analogy is not legitimate.


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 Post subject: Re: A.J. Burnett Will Pitch in 2014
PostPosted: Sat Feb 01, 2014 4:01 pm 
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Bucfan wrote:
Dr. Phibes wrote:
The Penguins have currently sold out over 300 straight home games with an average ticket price of $147 dollars. Pittsburgh will pay to support a winner.

(1) For how many games?
(2) For how many seats?

If the Pirates played 41 home games, and had a stadium with 16,000 seats, and were coming off numerous consecutive playoff seasons, then the analogy would make sense.

They don't, they don't, and they aren't so the analogy is not legitimate.


41 games vs. 81 games
18k vs 36k (guessing)
Avg Pens Ticket $147 vs. Avg Pirates ticket $18.32

I will add though that the Pens weren't selling out prior to the salary cap. By and large MLB holds small market teams back.


Last edited by Dr. Phibes on Sat Feb 01, 2014 4:18 pm, edited 1 time in total.

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 Post subject: Re: A.J. Burnett Will Pitch in 2014
PostPosted: Sat Feb 01, 2014 4:09 pm 
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StarlingArcher wrote:
I would say, by and large, Scott Boras (and Yahoo) would probably have a better grasp of things than the people here who are doing mental gymnastics to convince themselves that the Pirates have all of this money hidden away that they refuse to use.

My point was never that growing revenues was bad. My point was that even if we reach an unrealistic level of gate receipt increase, it would make a rather minuscule difference in the big picture so spending expectations shouldn't change based on increased support.

Pirates would've needed to average 13,000+ more per game to equal a team like New York or St. Louis. And since that's not physically possible, that means they'd need to hike prices up significantly. I spent 20+ years in Pittsburgh, it's about as price sensitive as you can get (which is fine, you don't have a large population of rich folks willing to spend big).

Every fanbase is sensitive to large hikes in ticket prices. That is kind of the point. The Pirates have missed opportunities to gradually increase ticket prices by being so bad for so long. They built a new stadium and went 10 years without raising ticket prices! That is insane! They still would have sold the same amount of tickets last year and the year before if they had been able to increase tickets a few times along the way. The incremental lost opportunities is why their revenues are so low.


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 Post subject: Re: A.J. Burnett Will Pitch in 2014
PostPosted: Sat Feb 01, 2014 4:25 pm 
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Dr. Phibes wrote:
Bucfan wrote:
Dr. Phibes wrote:
The Penguins have currently sold out over 300 straight home games with an average ticket price of $147 dollars. Pittsburgh will pay to support a winner.

(1) For how many games?
(2) For how many seats?

If the Pirates played 41 home games, and had a stadium with 16,000 seats, and were coming off numerous consecutive playoff seasons, then the analogy would make sense.

They don't, they don't, and they aren't so the analogy is not legitimate.


41 games vs. 81 games
18k vs 36k (guessing)
Avg Pens Ticket $147 vs. Avg Pirates ticket $18.32

I will add though that the Pens weren't selling out prior to the salary cap. By and large MLB holds small market teams back.


What hurts the Pirates is Summer. There are a lot more entertainment options than in the winter.

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 Post subject: Re: A.J. Burnett Will Pitch in 2014
PostPosted: Sat Feb 01, 2014 4:38 pm 
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nad69dan wrote:

What hurts the Pirates is Summer. There are a lot more entertainment options than in the winter.


I actually think that aspect would be a plus if they were consistent winners and fans had the sense they were doing everything they possibly could to field the best team they can every season.


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 Post subject: Re: A.J. Burnett Will Pitch in 2014
PostPosted: Tue Feb 04, 2014 11:25 pm 
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nad69dan wrote:
What hurts the Pirates is Summer. There are a lot more entertainment options than in the winter.


True.

Still, what better place to be [on a nice sunny day] than PNC?!

All great points all around. FWIW, if I lived in the area I'd buy season tix.

But in this day and age, with prices the way they are (in general; to include food/parking, etc) and with baseball being not as 'fun' as other modern sports, it's understandable why the Pirates don't draw as well.

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 Post subject: Re: A.J. Burnett Will Pitch in 2014
PostPosted: Thu Feb 06, 2014 3:31 pm 
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Just saw that both Capuano and Maholm are still available, too. Might be good innings eaters for them on a one year deal.

ZM

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 Post subject: Re: A.J. Burnett Will Pitch in 2014
PostPosted: Thu Feb 06, 2014 5:50 pm 
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If the Orioles sign Arroyo, as they are rumored to be in the process of doing, I change my answer to ...

Pirates, 1 year, $10.5 million with incentives that could make it worth $12.5 million.


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 Post subject: Re: A.J. Burnett Will Pitch in 2014
PostPosted: Fri Feb 07, 2014 4:47 pm 
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Just read this:

"Roch Kubatko of MASNSports.com reports that A.J. Burnett signing with the Orioles "doesn't look good."

Kubatko notes that talks are "not dead but (the) feeling is he wants to pitch in (the) NL." The report comes on the heels of Phillies GM Ruben Amaro saying the club was likely done with their big moves. Given that those two teams and the Pirates have been seen as the favorites to sign Burnett, the odds of the right-hander winding up back in Pittsburgh appear to be increasing."

http://www.rotoworld.com/player/mlb/2880


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 Post subject: Re: A.J. Burnett Will Pitch in 2014
PostPosted: Sat Feb 08, 2014 10:24 am 
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Didn't Arroyo sign with the D Backs?


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 Post subject: Re: A.J. Burnett Will Pitch in 2014
PostPosted: Sat Feb 08, 2014 10:52 am 
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VanSlick wrote:
Didn't Arroyo sign with the D Backs?


Yep. 2 years, $23.5MM (2014: $9.5MM, 2015: $9.5MM, 2016: $11MM/$4.5MM buyout)


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 Post subject: Re: A.J. Burnett Will Pitch in 2014
PostPosted: Sat Feb 08, 2014 12:04 pm 
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In separate stories in MLB rumors, the Phillies are done shopping and the Orioles are not likely to land Burnett because he doesn't want back in the AL East. My hope is that this entire affair has been posturing and the Pirates offer something close to fair market with a big chunk deferred to keep this years payroll down to something they are comfortable with.


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