And let's talk about average ticket prices for the stadium as a whole. According to Team Marketing Report, the Average Ticket Prices, 2002: The teams with $90 million or more payrolls for 2002: New York Yankees: $24.26 Boston Red Sox: $39.68 Texas Rangers: $18.03 Arizona Diamondbacks: $13.80 Los Angeles Dodgers: $16.38 New York Mets: $22.53 Atlanta Braves: $20.59 And for Houston: Houston Astros: $18.87 So Houston's average ticket price is higher than that of the Dodgers, DBacks and Rangers, but lower than the others. The Link to the data: http://www.teammarketing.com/fci.cfm?page=fci_mlb2002.cfm
For comparison with newer stadiums like the Astros, Pittsburgh tickets are priced from $9 min to $60 max. San Fran, which opened the same year as Enron (I think?), goes from $9 to $60 as well.
And for Houston: Houston Astros: $18.87 So Houston's average ticket price is higher than that of the Dodgers, DBacks and Rangers, but lower than the others. Thanks for the data -- that certainly is more useful than the mins/maxs I had. Sidenote is that the Rangers and DBacks are both in massive financial hell. One is trying to avoid bankruptcy and the other is trying to shed payroll.
Where Drayton makes (will make?) his money is in franchise value. He bought the team from McMullen for 115 million. Even assume his "losses" are truly losses, and not just creative accounting-he said he's lost 105 mill, and another 5 mill for this year, so 110 mill in losses. That's 225 million he's "spent" on the Astros. According to Forbes' franchise values (per ESPN), the Astros are "worth" 337 million. So if he sold the team at Forbes' franchise value to "cut" his losses, he licks his wounds with a 112 million dollar GAIN over the last 9 years. I don't think feeling sorry for Drayton is necessary.
Cleveland's payroll isnt close to 90 million. They are not in the group that I was talking about. Atlanta's ticket prices are at the same level as Houston's. New York teams naturally have higher ticket prices because of the absurd standard of living there. Everything from paper to apples is more expensive there. With Arizona, other than about 2,000 seats, all others range from 1 dollar to 28 dollars. Also, you failed to mention the Dodgers Their seats range from $6-$21
Cleveland's payroll isnt close to 90 million. They are not in the group that I was talking about. Up until this year, they were. Of course, they couldn't afford it and are now shedding payroll. Atlanta's ticket prices are at the same level as Houston's. Of course, they have a massive national TV deal. New York teams naturally have higher ticket prices because of the absurd standard of living there. Everything from paper to apples is more expensive there. How is that relevant? Higher ticket prices = more revenues. It doesn't matter if they have to be higher. The fact is they still get more money to spend. With Arizona, other than about 2,000 seats, all others range from 1 dollar to 28 dollars. Very true -- mrpaige's stats showed this better than mine did. Of course, they had to get massive loans from MLB last year to meet payroll, and are teetering on the brink of bunkruptcy. Also, you failed to mention the Dodgers Their seats range from $6-$21 Yeah, they seem to be the exception. Of course, they have the 2nd largest TV market, so they get an nice infusion of TV revenues.
Regardless of all the facts, Drayton has not lost money 9 straight years. No baseball owner has. I agree with that. MLB's finances were not in such a mess 9 years ago -- salaries have just gone up way too fast. And he'll get more than his investment back when he decides to sell. I just don't think Drayton is being particularly cheap by not adding payroll. Compared to other similar-revenue teams, I think we're spending reasonable amounts.
I think it's funny that people keep saying that the owners can afford to take operating losses because they make it up when they sell the franchise. Isn't it a bit presumtuous to assume that ALL owners will sell their team? My guess is that Bud Selig will be long gone when that family sells the team. Some people buy an MLB team because (gasp) they want to own an MLB team. What a concept!!!! Of course the owners (Drayton included) are going into a lot of debt to keep the teams afloat. In case you haven't noticed, you can't just sell an MLB team overnight like a CD or something. These things take time. So in the meantime they take on massive debt to avoid bankruptcy. A bankrupt team isn't worth much. How much is Enron worth these days? The franchise value argument is disingenuous and circular in logic. You wouldn't lose $500k operating a video store in hopes that Blockbuster will buy it from you for $1M. Why do you expect MLB owners to do what you wouldn't?
One more thing: In regards to ticket prices, Houston had more attendance than Boston, NY Mets, Atlanta, Arizona, and Texas. So, all though their ticket prices are similar or slightly more expensive than the Astros, they also averaged about 200,000 less fans than Houston.
Well...all of those teams except for Arizona has a MUCH more lucrative TV and radio deal than the Astros. Arizona bridges the gap with a LOT of debt.
Look at the demand for professional franchise teams. How many have not appreciated in value? Extremely different than a mom and pop video store. Anyone can open up a video store with 500K, becuase there is no barrier to entering that market. If you want to own a baseball team, there are only what... 28 teams?? (not sure of how many) But you must find a seller, than compete with others for that limted resource. If franchises appreciate 10% each year, and you are able to operate with only $5 million in losses, a franchise valued at $200 million rises to $220 million, subtracting $5 million in losses = a net gain of $15 million. 7.5 % return on principal, not to shabby. If the franchise value is greater, then its all the better for the owner, THUS a higher rate of return. Now if owners are borrowing against the value in their teams to meet payroll, then they have problems...
I agree that Drayton is a whiner...he helped run the Oilers out of town....remember the ole...."What, the Astrodome is a great place to watch a game Bud" then 2 years later...."The Astrodome sucks to watch a game we need a new stadium" I would be more sympathetic to the owners if they would open their books. If they are really losing that much money, let the union see.....but of course they won't because the revenue for the stadium events that they get ARE NOT part of their income for their respective teams and thus they can hide it as non related income etc. Both the owners and players are crooks.....Congress should revoke their anti trust status as they are a business anyway. DaDakota
What's the real story behind their exemption from the anti-trust laws? All the other sports are subject to the laws so why does baseball get "special" treatment?
Did you call into Kevin Wheeler's show on Sporting News Radio? Because last night, a caller from Houston, said the exact same thing. I agree totally with you.
A friend of mine did some research, gimme a few minutes to find it. edit: Here ya go...enjoy http://bbs.clutchcity.net/showthread.php?s=&postid=497099#post497099
I have seen a few people here compare Drayton's revenues to his player payroll. The problem is that there are many other expenses that are not thought of in this analysis. When we have a player go in for surgery, the Astros pay for it. Drayton has to pay the front office staff. Drayton has to put money into the MLB player's pension fund. The Astros also have one of the most expensive leases in all of baseball. All I ask is that you consider all of the costs of running a business in the analysis.
I think what nikestrad said is important to note.. even if he spent the 225 mil on the team he says he has.. if he is able to sale the team at market value.. then he has GAINED 112 million... so he would be making 112 million dollars out of a 225 million investment... I see it as he has been investing in a product that will eventually net him a big gain.. cant' feel sorry for that...
