M’s report loss in 08, no evidence forthcoming

DMZ · March 9, 2009 at 4:22 pm · Filed Under Mariners 

According to Pravda, the M’s managed to lose money last year, as reported in their annual report…

The report, released at Monday afternoon’s quarterly meeting in Seattle, reflected a $4.5 million loss during the fiscal year that ended October 31, 2008.

…which isn’t up on the PFD site.

The M’s pay almost nothing for the lease of Safeco Field. Their rent is so low it’s absurd. Even if you buy the $121m in claimed payroll, and you figure it takes… $50m to run operations, the farm system, keep the Moose in anti-flea medicated shampoos, that’s ~$170m.

FSN pays them at least $30m for broadcast rights. KOMO paid them $10m. They probably made $12m from the Fox/TSN TV deals. I don’t know how much MLBAM is paying out, so drop that for a second. They probably get $3-4m from the DirecTV deal… none of this counts any cut the commish takes for his slush fund, btw, I’m just trying to sketch this out.

The M’s drew 2,329,702 in their home games last year. What do you think they made in revenue per ticket? $25? Okay, so that’s $60m there. Between concessions, parking, advertising, luxury boxes, club seats licenses, and whatever, they probably cleared another $60m in profit.

Wait, we’re profitable already. What just happened? How are they supposed to have lost money, exactly?

Also, despite the headline, note that there’s no link to the report, and the M’s haven’t put it up in the “press releases” section for your perusal.


59 Responses to “M’s report loss in 08, no evidence forthcoming”

  1. Mike Honcho on March 10th, 2009 6:11 pm

    Either provide substantiative proof of where you think Derek is making things up, or can it.

    Fine, but that’s an awfully backwards way of enforcing burden of proof.

    How come you’re not in Dave’s division estimation thread, chewing on him for not adequately backing up his numbers?

    I guess it’s because Dave isn’t calling anyone’s integrity into question.

    Why is it that this time it’s not okay for me to rough out – with disclaimers – that the M’s revenue streams are as justification for why I’m skeptical of their unverifiable claim that they lost money?

    Like I said, I just don’t see how you can make a convincing argument without concrete data. And just because the M’s didn’t release the report itself doesn’t mean we should question its existence or accuracy.

    But per Jeff’s request, I’m done.

  2. Mike Snow on March 10th, 2009 6:30 pm

    And just because the M’s didn’t release the report itself doesn’t mean we should question its existence or accuracy.

    I’m sure it exists, I mean they at least had to show it to the PFD. And I expect it’s accurate in the sense that the numbers in it are derived from the team’s actual books, rather than simply being made up. But that doesn’t mean that the report isn’t carefully constructed to present facts in the light the Mariners want them presented, and what they call a loss may not be what I would call one.

  3. Jeff Nye on March 10th, 2009 6:56 pm

    Fine, but that’s an awfully backwards way of enforcing burden of proof.

    Derek’s gone out of his way to point out that this is just his best guess, using what information he can reasonably project, as to the realities of the Mariners’ financial situation. In the context of various prior instances of financial skullduggery on the team’s part, it’s not unreasonable to want to take a closer look as to whether their claim of a loss matches up with what information we CAN get at.

    You’ve been asked repeatedly to point out what specific things you think Derek is wrong about, and you haven’t done so.

  4. slescotts on March 10th, 2009 6:58 pm

    Are you suggesting that the Mariners are lying to the public about their bottom line?

    -Not ‘lying’ per se… Just doing what every other business does: limiting expenses, particularly those that come off of net profits (if any) and require payment to governmental bodies (quasi or otherwise). The M’s and MLB are smart folks. I would find it hard to believe that they didn’t have a team of accountants crunching numbers and building simulations ad nauseam.

    Is it less than truthful? Yeah, sorta’… It’s the system we have, profits and growth rule and are rewarded, fancy accounting can help achieve both.

    Besides, while we love Safeco, that didn’t go down super-well either…

  5. Mike Honcho on March 10th, 2009 7:32 pm

    You’ve been asked repeatedly to point out what specific things you think Derek is wrong about, and you haven’t done so.

    No, I’ve been asked to come up with specific numbers that refute DMZ’s comments. And I’ve already made clear that I don’t have those numbers, and that that fact doesn’t matter.

    And further, I’ve said several times that my problem is that DMZ can only give guesses (be they educated or not) as to total dollar amounts of revenues, expenses, etc. Which, to my knowledge, no one has disagreed with.

  6. Jeff Nye on March 10th, 2009 7:43 pm

    I don’t have any idea what point you’re trying to make, then.

  7. AFanOfTheSite on March 11th, 2009 12:45 pm

    I do numbers for a living, and the numbers on this site and elsewhere frequently end up raising an eyebrow or two. But I usually squelch that inner statistician, since I’m mainly here for the process of the analysis (and to learn more about the game) rather than the results.

    But, hey…. why not provide a confidence interval? Every one of DMZ’s numbers has an error, and when you sum up those errors correctly you’ll get an overall CI. The null hypothesis is the $4.5M loss. Sounds like DMZ’s point estimate is a profit….but I bet even if DMZ estimated his own confidence interval it would include the null, and he couldn’t say for certain that the team was wrong.

    But those that quibble about (the quality of) his numbers miss the point that the team has incentive to play the books to create a loss (no, that’s not “lying”… that’s “lying with numbers” which is not as bad!). Without the “forthcoming evidence”, any person reading the M’s reported number SHOULD assume it’s biased.

    And therefore a $4.5M loss is probably actually a profit.

    I post this at the end of a already dead thread. But that’s where statistical quibbling usually ends up!

  8. Mike Snow on March 11th, 2009 1:35 pm

    Confidence interval? This isn’t about statistics in the academic sense, it’s accounting.

  9. AFanOfTheSite on March 11th, 2009 2:32 pm

    He made educated guesses, and all the quibbles were about whether his guesses were right or not. Or about whether he didn’t include stuff (and DMZ I’m sure knows he missed some stuff). Hence they’re about the quality of his estimates.

    It ain’t accounting if you don’t have the numbers…. it’s statistics. It’s all statistics in the end.

    The only reason I bring this all up was all that stupid debate about someone needing to show specific errors to suggest the other person was wrong… or provide specific numbers to refute… no one has the numbers.

    But I won’t be arguing with you.

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