Wednesday, August 25, 2010

More thoughts on Pirates finances

By Jeff

The story of Pittsburgh Pirates ownership profiting from a losing baseball team is not going away any time soon. Fans and critics of the team have been making these claims for years, and now there are actual reports that can be used to support them.

Here is an interesting article from, that blames MLB as a whole for letting the Pirates ownership get away with making money at the expense of putting together a winning baseball team.

One issue I have with the column, though, is the author makes a statement as if it were fact, yet he does support it with statistics. Joe Sheehan writes in the first paragraph, While positioning themselves as the victim of 'the system' and trading away an entire starting lineup, the Pirates have been one of the most profitable teams in MLB, pocketing $29.3 million in 2007 and '08 combined, years in which they cashed revenue-sharing checks for a whopping $69.3 million." released financial information from just a handful of teams including the Pirates. How can he say that the Pirates are one of the most profitable teams in MLB when he doesn't provide any numbers from other teams to compare the Pirates' profits to? It could be true that the Pirates were near the top in profits, but no proof was provided in the article.

The Pirates are the punch line of many baseball jokes, and they deserve to be so. The problem I have is when members of the national media make statements like this and act like they know more than they do. It reminds me of a "ESPN First Take" anchor making fun of the Buccos last summer when they were trading away all their veterans. The anchor recited a list of names that included Jason Bay, Xavier Nady, Nate McLouth, Jack Wilson, Freddy Sanchez and Adam LaRoche, and finished it by saying "That's a great team". Obviously he never watched a Pirates game in his life or he would have realized the team had all those guys on one roster and they were still well below .500 baseball.

We're all guilty of making such statements. I recall telling a friend I thought the Nationals gave Ryan Zimmerman way too much money considering he was injury prone. For some reason, I thought I heard or read that he got injured a lot. In reality, Zimmerman has played in at least 157 games in every season he's been a regular except for 2008 when he only played 106. But that doesn't excuse individuals, myself included, for making these uneducated proclamations. Sometimes we are so wrapped up in thinking we know everything about sports, we get carried away, rather than admitting we are not familiar with every player and organization in sports.

Sorry, I kinda digressed.

The Police - Walking on the Moon


  1. I really wish that Dejan interview was on podcast, but it's not up yet. He seemed to think (and I agree) that $15 million profit is really not that much for an MLB franchise to earn in one season. He was finding it hard to understand why everyone thought this news meant that the Pirates are in good financial shape. Just because a team is profitable for a few years doesn't mean they are in good shape. I just hope that their debt level is indeed "manageable" as Coonelly indicated it was on Monday.

  2. It might be my lack of knowledge in the business world, but how can you be considered in good financial shape when you have a debt of more than $100 million? I would think that debt would be lower If they were one of the most profitable teams in the league. But again, I don't know much about business.

  3. That's my point. A lot of people saw the $34 million in profits over three years and immediately jumped to the conclusion that this team is making bank. The debt level is very important to this conclusion. Every professional sports team has some amount of debt. It's simply part of running a billion dollar corporation, but some teams obviously have more debt than others.

    I don't know a lot about debt levels of huge corporations, but the statistic that is often looked at by the banks is the debt to equity ratio. This is important mainly because interest rates are attributed to certain debt to equity ratios. In the Dejan interview I keep citing (that is for some reason not available on podcast) he said that the Pirates did not use more of their profit to lower their debt because then they would have had a much higher interest rate.

    I stand by conclusion that we're screwed unless we get really lucky with some prospects and management decides to add some legitimate pieces to this puzzle in the next few years. I hope I'm wrong, but I don't think we have an owner with enough money to get the job done.