Red Sox sign David Price, 7 years and $217 million

[rdowdall]

It's like some fans won't be happy unless the Jays announce they made half-hearted, never-going-to-be-accepted offers to every big SP free agent just to say they did it.

Some of that is the unknown versus the known though.  Fans know what AA was able to accomplish this year.  They don't know what the new management team is going to do.  This breeds concern that they are doing the wrong thing, even if what they are doing isn't all that bad.

 

[Kin]

The Blue Jays are going to be profitable with or without the Price signing.

Given that you neglected to include any actual facts that back up this assertion, I'm going to assume you don't have any.

 

[Kin]

Just like you don't have any.

It is hard to establish one way or another given that we don't have concrete numbers.

Indeed. One might even say that in the absence of those numbers it would be foolish to make definitive claims about what effect signing Price would have on the team's bottom line.

 

[bustaheims]

Rogers makes money off the Blue Jays' ticket sales, merchandise, concessions and television. ALDS Game 1 was the highest watched program in Sportsnet history with over 6 million viewers. There was another game which I forget where at some point, half of the country watched at some point. Then think about the fact they owned the stadium and television. How much extra money did the baseball team generate outside of their general annual report? How much advertising? How many extra cable and phone subscriptions and other services did they get as a result of the team's success?

These numbers are absolutely meaningless in terms of revenue generation, as all advertising time would have been sold long before the game aired, and the subsequent ratings/viewership has no impact on what those fees were. And, since those numbers are absolutely not sustainable during the regular season, they would have had minimal impact on Rogers' ability to increase their advertising rates for the upcoming season.

It's also incredibly unlikely they generated much by way of new business because of the Jays' success. People aren't suddenly going to switch cable, internet or phone providers because the Jays did will. It's not like there's a huge portion of the population that suddenly decided they needed Rogers' services. If they wanted them, they already had them, and if they didn't have them, they didn't make the decision before of the Jays, but, rather, because of who offered them the best deal. Cable/Internet/cell phones are among the few products people legitimately shop around for if they don't already have a provider.

Rogers saw some increase in terms of ticket sales late in the season, as well as the extra revenue generated by the 6 home playoff games (and the portion of merchandise and food sales they would have received from those games), but that's really it. A nice increase, sure, but hardly a boatload.

 

[Kin]

It's also incredibly unlikely they generated much by way of new business because of the Jays' success. People aren't suddenly going to switch cable, internet or phone providers because the Jays did will. It's not like there's a huge portion of the population that suddenly decided they needed Rogers' services. If they wanted them, they already had them, and if they didn't have them, they didn't make the decision before of the Jays, but, rather, because of who offered them the best deal. Cable/Internet/cell phones are among the few products people legitimately shop around for if they don't already have a provider.

Just to expand on this a little, my brother-in-law didn't have cable last year but, with the Blue Jays going well and my nephew getting into the team, he did decide to...subscribe to MLB.tv

And, he says, he might subscribe next year too. So the Jays caught 1/30th of the money generated his increased fandom.

 

[bustaheims]

When it comes to the exact level of increase, it is speculation until we know the numbers but we know that they made significantly more off this team than in any other previous year and that accounts for something.

Sure, but you also have to remember that, for years, the Jays were reportedly losing money for Rogers, so a good portion of whatever increase in revenue the team saw simply bridged that gap, and, in order to repeat that, the team would have to rely on having seasons similar to this one for the entirety of Price's contract (and, that's not even factoring in increases in salaries elsewhere on the team now and in the future). That's just an unrealistic expectation. As much as Price could have helped to achieve that goal, in no way does he guarantee it, which mean that there's no guarantee that signing him doesn't become a financial sinkhole for the Jays. No businessman worth anything is going to put their business in that position.

 

[Kin]

Yet we know that signing Price exponentially boosts this team's chances of winning. And we all saw what  a winning product on the field meant for Rogers.

No, we didn't. We saw that a winning team excites the city. We did not see what it meant for the team's bottom line. You've admitted we don't know, so it's not self-evident.

The dramatic impact came from tickets and merchandises.  When it comes to the exact level of increase, it is speculation until we know the numbers but we know that they made significantly more off this team than in any other previous year and that accounts for something.

We actually don't have to guess at what it meant in terms of attendance dollars. They actually count these things.

http://www.baseball-reference.com/teams/TOR/attend.shtml

This season, the Blue Jays attendance was 2,794,891. Last year, it was 2,375,525. So the Jays sold 419,366 more tickets. The Blue Jays average ticket price was 25.14.

So, 419,366 times 25.14 is about ten million dollars. If you assume the average fan then spent 20 dollars on concessions you'd get to another eight million. So 18 million dollars.

(It's important to note here that the Blue Jays don't reap all of their merchandise sales, they simply get 1/30th of all MLB merchandise sales)

Now, keep in mind that this money coming in is in Canadian dollars and their payroll is in US dollars. I'm sure Jays have some sort of currency hedge here but not to the point where the dollar doesn't matter at all.

So even if you do want to argue that Price is solely responsible for the increase in ticket sales(400,000 or so) or merchandise sales(which the Jays split with the rest of the league) there's really no good reason to believe that this last season generated the sorts of revenues you're talking about.

 

[Kin]

Sure, but you also have to remember that, for years, the Jays were reportedly losing money for Rogers, so a good portion of whatever increase in revenue the team saw simply bridged that gap, and, in order to repeat that, the team would have to rely on having seasons similar to this one for the entirety of Price's contract (and, that's not even factoring in increases in salaries elsewhere on the team now and in the future). That's just an unrealistic expectation. As much as Price could have helped to achieve that goal, in no way does he guarantee it, which mean that there's no guarantee that signing him doesn't become a financial sinkhole for the Jays. No businessman worth anything is going to put their business in that position.

But even beyond that, let's look at this judiciously for a second. Let's say that there's real evidence that the team winning the way it did last season led to significant revenue increases.

If you were running the Blue Jays as a business, wouldn't your reaction to that not be "Hey, let's sign David Price to a risky, long-term contract" but rather "Hey, let's try and build a foundation that will hopefully let us be competitive long-term"?

I think there's a sort of contention here that if the Jays won the World Series next year then revenues would not only jump significantly but that they'd stay that way for the foreseeable future. I think, though, that if we look at attendance numbers we see that's not really true. The Jays, for instance, won those 2 World Series' and then their attendance dropped by 20% in '95 and then another 25% in 96.

Or the White Sox. The White Sox won the World Series in 2005 and their attendance jumped 8,000 a game the next year. Then, in 2007, they were bad and their attendance dropped. Then they made the playoffs again in 2008...and their attendance dropped.

Or the Phillies. The Phillies won the World Series in 2009. Then they made the next three years. Then they missed the playoffs and their attendance dropped by 7,000 a game the next year. Then another 8,000 a game the year after that.

Really, the only thing that I think you can look at as resulting in long-term attendance gains is sustained success. Short-term thinking is counter-productive to that, no matter how much success you have in a given year.

 

[Kin]

We did though. We saw Rogers profits jump in August and September alone (40% according to the Glove and Mail), so at the end of the day there was an impact whether moderate or significant.

Right but you said we know what that impact was. I said we didn't. I crunched the numbers above to show that, yes, there was probably an uptick in Blue Jays revenues in those months but it was fairly limited. The news stories about Rogers profitability backs that up.

Rogers Profits increase

Revenue in its media operations, which include the Jays and its slate of TV channels, grew eight per cent to $473 million...

So all of Rogers Media, which includes the Blue Jays, increased their revenues, not profits, 8 percent.

You neglect to mention that the Jays run some of their own shops, the one at Rogers Centre and Eatons so that 1/30th isn't always the case and with the Jays being the only team in Canada, they virtually have a monopoly on MLB merchandise in Canada.

I don't mention that because it's not all that important. It doesn't matter where MLB merchandise is sold or who runs the store it's sold in. MLB merchandising revenues are split 30 ways.

I'm not sure why you cited the White Sox as an example given that they are virtually a perennial disappointment, aside from a few good years in the mid-2000s. They are at the bottom in terms of Chicago sports fans' interest and will always be second cousins to the Cubs, so their attendance numbers will always suffer. Not to mention they play at the outdated Comiskey Park that needs more than just a few renovations.

First of all, the White Sox play in a stadium(which is called AT&T Cellular Field) that's newer than the Rogers Centre, so that's not really much of a factor.

But more to the point, the reason I mention the White Sox is because despite all of your contentions about how unpopular the White Sox are, when they rose to prominence in 2005 their increase in attendance was virtually identical to the Blue Jays increase this year(5178 per game for the Blue Jays, 5090 for the White Sox). Then it vanished when they stopped being good.

Building lasting success is the only way to see perpetually higher attendances. You do that by internal growth.

If you want proof of great attendance as a result of a winning product on the field you have to look no further than the Blue Jays from 1985-94 while having a high payroll much of those years.

Right. And were those teams built on high priced free agents? Or did the Blue Jays grow their team into a contender and then spend? Those 1980's teams were almost entirely homegrown. When the Blue Jays faltered is when they started to try and take shortcuts and spend their way to victory. 

The Yankees for instance have been mediocre at best the last few years but it hasn't hurt their attendance at all, they're still #1, and they will probably still draw good numbers if they continue to be sub-par for a few years, kinda like how the Maple Leafs still draw well despite putting on a shoddy product on the field year after year.

Again, that is just flat out untrue. The Yankees, when they moved into their new Yankee Stadium and made the playoffs for four years in a row, drew between 45 and 46 thousand fans a night. In the last three years of being "mediocre at best" they've drawn significantly less. This last year they drew 39,430, a decrease of 15% of their 2010 high of 46,491.

 

[bustaheims]

Again, that is just flat out untrue. The Yankees, when they moved into their new Yankee Stadium and made the playoffs for four years in a row, drew between 45 and 46 thousand fans a night. In the last three years of being "mediocre at best" they've drawn significantly less. This last year they drew 39,430, a decrease of 15% of their 2010 high of 46,491.

Never mind the fact that they're the Yankees! They're part of cultural fabric of the city of New York in a similar way to the Leafs in Toronto (championship success notwithstanding). They're always going to draw a decent number of fans to their games. That's not true of the Jays (or the overwhelming majority of professional sports teams).

 

[Kin]

Again, that is just flat out untrue. The Yankees, when they moved into their new Yankee Stadium and made the playoffs for four years in a row, drew between 45 and 46 thousand fans a night. In the last three years of being "mediocre at best" they've drawn significantly less. This last year they drew 39,430, a decrease of 15% of their 2010 high of 46,491.

Never mind the fact that they're the Yankees! They're part of cultural fabric of the city of New York in a similar way to the Leafs in Toronto (championship success notwithstanding). They're always going to draw a decent number of fans to their games. That's not true of the Jays (or the overwhelming majority of professional sports teams).

That's true but even then, you know who else isn't spending like a drunken sailor this off-season? The Yankees. In fact, over the last few years, it looks like they've been more interested in cutting payroll.

You can print money like the Yankees, be owned by private individuals and yet you're still going to have a budget.

 

[TML fan]

Although at this point I've lost all interest in the Blue Jays, I would like someone to explain to me why I'm supposed to care about the company's bottom line and why I should value it more than seeing a championship?

I mean, it's clear that's what the organization values. I would just like to know why I'm supposed to be on board with that?

 

[Kin]

Although at this point I've lost all interest in the Blue Jays, I would like someone to explain to me why I'm supposed to care about the company's bottom line and why I should value it more than seeing a championship?

I mean, it's clear that's what the organization values. I would just like to know why I'm supposed to be on board with that?

I don't know how to answer this outside of apologizing for the fact that you've apparently gone this far into your adult life without realizing that professional sports teams are businesses and that being a sports fan, loyal to a particular team, is an entirely illogical thing.

You don't have to care about those things but criticizing the team outside of that context is exactly the same thing as getting mad at your bank for charging you service fees because you'd be happier if they didn't.

 

[Kin]

Teams like the Tampa Bay Rays and Oakland Athletics have used that exact formula in recent years and yet they're constantly ranked in the bottom in terms of attendance, in the case of the Rays, the very bottom. So that's just not always true. Your circumstance and surroundings are a big factor.

Actually, the Rays and Athletics are perfect examples of what I'm saying. You just don't seem to really understand the point.

I didn't say that long term success will turn the Rays into the Yankees. What I said is that the only way to maintain short spikes in attendance is to keep being good. The A's and Rays illustrate this perfectly. When they're good, their attendance spikes by nearly 25%. When they're bad, that goes away.

Building a team for short term success, like you're advocating, does not lead to maintaining attendance after the team falls to earth.

No team is perpetually good, every team goes through periods of re-building and struggles at some point. The plan of building up the team from within might result in you having success for a period of 5 years or more or 3 years or it might never happen, like J.P. Ricciardi's failed 5 year plan. Then your attendance dwindles because you never reached that goal. In the same way, spending in order to keep your core can yield the worse or same or better results. So no, there isn't a single way to guarantee long lasting success.

Again, you're missing the point. I'm not saying that there's a way to guarantee perpetual success. What I'm saying is that the "Win now, don't care about later" philosophy you're espousing, contrary to your claim otherwise does not lead to some sort of lasting effect on attendance. If the Jays were to sign Price to a 7 year deal and won the world series next year but were then lousy in years, say, 4-7 of the contract then the evidence overwhelmingly tells us that that world series title won't lead to sustainable revenue/attendance increases in those four lousy years.

 

[TML fan]

Although at this point I've lost all interest in the Blue Jays, I would like someone to explain to me why I'm supposed to care about the company's bottom line and why I should value it more than seeing a championship?

I mean, it's clear that's what the organization values. I would just like to know why I'm supposed to be on board with that?

I don't know how to answer this outside of apologizing for the fact that you've apparently gone this far into your adult life without realizing that professional sports teams are businesses and that being a sports fan, loyal to a particular team, is an entirely illogical thing.

You don't have to care about those things but criticizing the team outside of that context is exactly the same thing as getting mad at your bank for charging you service fees because you'd be happier if they didn't.

People watch sports for a variety of reasons, all of which I think are ultimately illogical. It seems to me that you'd get just as much enjoyment from hanging around Bay St. offices watching the bean counters crunch numbers as you would from taking in a baseball game, but hey, whatever floats your boat. Like I said, everyone has their reasons.

I probably wouldn't be able to manage my money without keeping it in a bank, so I don't really have a choice but to pay service fees. I absolutely do have a choice of whether or not to pay for baseball. If their business model is to rely on people who will pay for a shoddy product because it's the only game in town then I'm not in their target market, so I guess they don't care whether they get my money or not.

 

[Kin]

If their business model is to rely on people who will pay for a shoddy product because it's the only game in town then I'm not in their target market, so I guess they don't care whether they get my money or not.

I just want you to know how much I deeply enjoyed the irony of someone calling themselves "TML Fan" saying this indignantly.

 

[Heroic Shrimp]

If their business model is to rely on people who will pay for a shoddy product because it's the only game in town then I'm not in their target market, so I guess they don't care whether they get my money or not.

I just want you to know how much I deeply enjoyed the irony of someone calling themselves "TML Fan" saying this indignantly.

So says Nik the Rogers Fan.

 

[Kin]

So says Nik the Rogers Fan.

Sympathy for the Devil, Inc.

 

[TML fan]

If their business model is to rely on people who will pay for a shoddy product because it's the only game in town then I'm not in their target market, so I guess they don't care whether they get my money or not.

I just want you to know how much I deeply enjoyed the irony of someone calling themselves "TML Fan" saying this indignantly.

In your typically arrogant fashion you think you've got everything figured out when you don't.

 

[WhatIfGodWasALeaf]

If their business model is to rely on people who will pay for a shoddy product because it's the only game in town then I'm not in their target market, so I guess they don't care whether they get my money or not.

I just want you to know how much I deeply enjoyed the irony of someone calling themselves "TML Fan" saying this indignantly.

In your typically arrogant fashion you think you've got everything figured out when you don't.

I for one thought the TapouT shirt comment was amusing.  ;D