Even cashless athletes refute DeWitt by saying MLB is a money loser
One of the storylines that slipped a bit under the radar this week was St. Louis Cardinals owner Bill DeWitt’s claim that owning a Major League Baseball was actually a one-way ticket to the hospice.
It’s one thing to turn the truth a bit around in the midst of contract negotiations, but DeWitt said on a radio show in the St. Louis area that “the industry is not very profitable, to be honest. absolutely honest ”.
What audience was he trying to reach? Who ever imagined that owning a baseball franchise was a wild ride?
DeWitt may not believe it himself. He should not. He and his group bought the Cardinals in 1995 for $ 150 million. According to Forbes, the current value of the franchise is $ 2.1 billion. In a quarter of a century, its investment has seen an average increase in value of $ 78 million per year every year for the past 25 years.
I wonder if he asked for food stamps.
Uh, probably not. He and his leadership group managed to pull together enough pieces under the sofa cushions to build a Ballpark Village outside of Busch Stadium, then ditched $ 260 million for a Phase 2 expansion that includes apartments of luxury, a 29 story skyscraper and alive! By the Loews hotel.
DeWitt and his fellow owners returned to gamers with a new offer on Friday, and it looks like there are a few bucks available. The new offer is worth around $ 70 million more than the last offer, potentially more than that if full playoffs are over.
And it’s good. But it’s hard to get around the idea that DeWitt isn’t an outlier, that he’s the voice of at least some of the baseball ownership. As documented above, the Cardinals are proof that with this current incident perhaps the exception, baseball possession is a money-making machine.
We only have to look at our own Bay Area backyard at Oakland A’s, in my opinion one of the poorest franchises in the game. The A’s are on most lists every year. baseball’s most frugal teams.
Still, it’s not the same as not being a lucrative business.
When Lew Wolff and John Fisher got together to buy Oakland A’s from Steve Schott and Ken Hofmann in 1995, they paid $ 180 million. Forbes says the A’s – Wolff sold all of his stock to Fisher some time ago – are valued at $ 1.1 billion. In that same quarter century, the value of As has grown by just under $ 37 million per year for 25 years.
Earn money the A’s way
Buyer Year of purchase Purchase price
Arnold Johnson 1954 $ 3.5 million
Charlie Finley 1960 $ 1.92 million (* 52%)
Walter A Haas Jr. 1980 $ 12.7 million
Schott / Hofmann 1995 $ 72 million
Fisher / Wolff 2005 $ 180 million
Present Value (Forbes) $ 1.1 billion
(Note: Finley bought the club after Johnson died of a heart attack at age 53. Finley bought 52% of the team’s stock in 1960; months later he bought out the minority owners).
DeWitt could be the first to suggest that the cash profit is not realized until the asset is sold, and he would be right. Technically.
Counterbalancing this, however, are facts. First, owners of a multi-billion dollar franchise don’t have to go to payday lenders to get a loan.
And the income money continues to flow. Fox’s deal to stream Major League Baseball was set to expire in 2021, but it has been extended by $ 5.1 billion until 2028. Agreements with ESPN, Turner Sports and Facebook are on hold, but once finalized , the total will be more than double the national television for the 30 big clubs.
Oh, did we mention that Major League Baseball made $ 10.7 billion last year?
If owners like DeWitt approach the ongoing negotiations with the players’ association trying to trick players into believing the pit is dry, they still have a way to go.
Just ask A’s reliever Jake Diekman, who took to Twitter to demand that the owner open his financial statements and prove his poverty allegations. This does not happen. And it won’t.
But with this attitude from at least part of the homeowner group, it’s no surprise that a deal has yet to be struck.
Follow track insider John Hickey on Twitter: @ JHickey3
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