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Tuesday, January 29, 2013

Comments

Iceman - Amaro hasn't been 'cut off' but probably knew going into this offseason that the luxury tax threshold was a clear line of demarcation this group won't cross. He probably did know that the FO was also concerned about payroll.

Yeah the season ticket sales really go matter because the sellouts & increases in gate revenues have been the primary reason why the Phils have been able to dramatically escalate their payroll.

Gate receipts (Source: Forbes estimates)

2006: $72M (Average ticket: $27)
2007: $84M (Average ticket: $27)
2008: $103M (Average ticket: $28)
2009: $123M (Average ticket: $31)
2010: $124M (Average ticket: $33)
2011: $132M (Average ticket: $36)
2012: TBA this spring

06-11 CAGR of ~13%

Overall Revenues (Source: Forbes):

2006: $183M
2007: $192M
2008: $216M
2009: $233M
2010: $239M
2011: $249M
2012: TBA this spring

06-11 CAGR of ~6%

Phils Opening Day payroll (Source: Cot's)

2006: $88M
2007: $89M
2008: $98M
2009: $113M
2010: $138M
2011: $166M
2012: $172M

06-11 CAGR of ~13%
06-12 CAGR of ~12%

Funny how the CAGR for the increase in gate revenues is also identical to those in the MLB payroll.

Phils didn't increase ticket prices this season on any tickets even though they vent to a flexible ticket pricing system for certain games. They went out of their way to make that point to season tickets holders & that there was no net increase in cost to them. Got the letter in Nov.

So if the Phils didn't increase ticket prices and likely had a dropoff in season ticket renewals, then yeah I am sure the Montgomery and Co. are pretty concerned this season fiscally especially if they struggle early and walk-up sales aren't as strong as they are projecting.

Hell, Forbes already had the Phils with an operating loss in 2011. I am sure there estimates will show the same for the Phils in 2012 when the figures come out in March.

TTI - It isn't idle speculation. If the Phils were doing well, they would have put an article in Dec/Jan with very detailed information and specific figures on season ticket renewal rates.

First time this offseason since '07 (they did it in '08, '09, '10, '11, and last year) where they didn't.

Not just the Philly sports writers deciding to write an article on the topic. It's the Phils' Marketing Dept going to the Philly Inquirer and supplying them with very specific information to fulfill several marketing purposes.

Granted you have to take the Forbes estimates especially on overall revenues/operating income with a grain of salt since when Deadspin leaked several MLB team's actual financial records there were some real differences.

Gate revenues are easy enough to calculate with a high degree of accuracy since enough information is known (specific ticket prices and overall attendance).

Nice little piece on Brian Schneider following his decision to retire.

http://blogs.mcall.com/phillies/2013/01/phillie-annouces-his-retirement.html

MG: It is idle- for now- because you don't have any real numbers you are basing this on. If the reports come out and ticket sales are actually down quite a bit, then you have something.

TTI - Yeah but one founded with a pretty clear trend and pronounced trend.

Zero chance the Phils' Marketing Dept supplies specific numbers to the Philly Inquirer for an article noting that season ticket renewals and overall ticket sales are down at this point. Why would they remotely do that?

Good luck to Brian Schneider. He had a nice little run.

14 days.........

Rolo~ From the last thread let me to you. As far as Amaro and his aging team. No move he's made made them any younger except Revere. D, Young's only 27, but we don't know if he's an everyday player. Lannan's 31, and I'd much rather have a better # 5 starter than he.

As far as the Phils not spending "this off-season", I meant exactly that. After the Hamels deal, which HAD to be made at the time, no doubt), I bet Amao was told not to spend big money, or give out long-term deals. Every deal they've made is cost-friendly. They didn't sign any big name offensive players.

I thought they would get SOMEONE. I'm extemely disappointed and can honestly say this is the least excited I've been this team in quite some years.That's all I have to say about that. Hope that clarifies things.

Was it Clout who I had the gentlemen's bet with regarding the relative careers of Gillies and J.C. Ramirez? I said Gillies would have the better career and he said Ramirez, who I felt was nothing much.

Of course, we're not really anywhere near the end yet, but if you're DFA's for Chad Durbin, and Joe Savery is still on the 40 man ahead of you, the organization can't value you at all. I know Savery is a lefty, but he's awful, so there's that.

And I still think that if Gillies has some semblance of health, he'll be a contributor in the majors sometime this or next season.

MG~ You don't need numbers to prove the Phls weren't going the cap. I've said it all year. Evidence of whom they brought in via trade or otherwise is all the proof you need. That's why I said they didn't spend like an elite team "this Off-season". As stated above, the Hamels deal probably forced the FO to sy enough is enough.

You and I believe that. Others do not.

DPat - I agree. Based on what they've been doing for the past year or so, it's hard to conclude otherwise.

I can picture MG working in ticket sales. He runs into Rube's office all excited. "I just sold another partial-season ticket! By my calculations, you can raise the payroll by $742.13!"

Twitty-
I can also see Rube holding Cliff Lee hostage, demanding that the fans buy up all the remaining seats or Cliffie sleeps with the fishes(the ones in the Marlins fish tank that it ).

Only in the mind of DPat can the Hamels extension be separated from the overall FA spending.

Umm, well maybe not only in DPat's mind...

I always thought Brian Schneider was underrated in terms of classiness of act. I appreciated, for example, his aggressive campaigning for Ruiz's All-Star appearance last year. He also had some nice clutch hits in 2010, including one walk-off homer which won me a bar bet. I will remember his career fondly.

I thought they would get SOMEONE.

___________________________________________

They did get people. You just don't like who they got. And I bet by next off-season you will be saying, "I told you all along they should've gotten guys like Hamilton and Swisher." as if you were the only one having unique thoughts that a huge bat would've helped.

As I have said in the past- the problem with you is that you make in your head who the Phillies should get and then when they don't you complain without knowing any of the circumstances as to why they did not get that player.

No doubt the Miami PED mess influenced some offseason moves for the last several weeks. I'll cling to the dream that Ruben's Big Trade is being delayed until the investigation is swiftly completed.

TTI, they did not get SOMEONE, they got a bunch of someones. There is a difference and this team needed a SOMEONE.

Edmundo: Maybe DPat would've taken an ANYONE!

MLB.com has released their top 100 prospects list. The Phillies have Jesse Biddle listed at #60. His ratings from scouts are:

Fastball: 5/6
Curveball: 5/6
Change-up: 4/6
Control: 5/5
Overall: 5/6

The write-up goes like this:

t’s looking like the local boy is going to make good. The Philly area high school product who was drafted by his hometown team has been moving one level at a time, finishing among each league’s leaders in ERA and strikeouts for his first two full seasons. Another good sign has been Biddle's improvement, lowering his walk rate while raising his strikeout rate from 2011 to '12. He has the chance to have three above-average-to-plus offerings when all is said and done. While he’s not a flame-thrower, typically topping out at around 92 mph, his fastball plays up even more because he gets good angles on it. His big, sweeping curve is a swing-and-miss pitch, and he has a good changeup to go along with the other two. Big and strong, Biddle has a clean delivery that’s easy to repeat, which should lead to better and better command as he progresses.

Wow. MLB.com has Ethan Martin at #80. That's the highest ranking I've seen from any publication.

***Was it Clout who I had the gentlemen's bet with regarding the relative careers of Gillies and J.C. Ramirez? I said Gillies would have the better career and he said Ramirez, who I felt was nothing much. ***

Yes, it was clout.

Speaking of the pharm, don't know if it got mentioned over the weekend but John Sickles ranked the Phillies system 20th over all:

20) Philadelphia Phillies (24): Strengths: Good pitching depth with Jesse Biddle, Adam Morgan, Austin Wright standing out; they seem to find nice lefties. They also have a habit of finding Tyler Cloyd types that scouts don't like but who get people out. Some nice right-handers too with Ethan Martin and Jon Pettibone nearly ready to contribute, plus considerable bullpen material. Weaknesses: Hitting. Heavy investments in tools players have not panned out. Untoolsy Darin Ruf was a nice surprise though. Not a terrible system, clearly better than the teams behind them.

So...just misses the Bottom 10?

NEPP: Yes. Not sure the description, "not a terrible system" is one you want to see used on your team. I suppose it's better than the alternative.

Really interested to see Biddle pitch at Reading and see Morgan again. Along with Martin, the RPhils will have an interesting rotation early on

MG - Throw Wright in there too even though I think he will end up being a reliever eventually. Not much filler in that rotation at the beginning of the season.

Biddle feels like Randy Wolf 2.0.


I mean that as a compliment.

All he needs now is a good fan group to go to his starts at CBP:

Biddle's Skittles (they all dress up as various skittles flavors)
Jesse's Girls (they just play that terrible Rick Springfield song)
Biddle's Fiddles (I'd imagine some sort of bluegrass fiddle group...)
Biddle's Riddlers (Dress up like the Riddler)

The farm system's making progress, at least on the pitching side of things. Baby steps.

For what it is worth, the Phils are having an Internet presale today for season ticket holders and I checked Opening Day vs Royals.

There are tons of seats available when I checked in several different sections. The only sections that are sold out are the 1st-to-3rd base options.

In the lower levels.

MG: Oh, well that proves NOTHING!

I still really like the Revere trade.. I think Revere is going to be awesome here...

Dickson, awesome? I'm wishcasting good, expecting solid.

TTI - It proves nothing except that Opening Day is nowhere near a sellout right now which again is something that hasn't happened since the '06'-'07 offseason.

The farm system's making progress, at least on the pitching side of things. Baby steps.

Posted by: ColonelTom | Wednesday, January 30, 2013 at 10:05 AM


Considering the talent that has been dealt over the past 2-3 years, it's quite remarkable that the system isn't worse off. The jury is still out on the 2011 draft but that class could make some significant strides this upcoming season.

MG-- So it wasn't as crazy a notion as some people thought that future revenues may decline. The new TV contract may be terrific, but isn't that based on advertising and PROJECTED numbers of viewers? Therefore, if actual numbers are less than expected in 2013 and 2014 due to a .500 record, the Phils network will pay less than the club anticipates today?

"So it wasn't as crazy a notion as some people thought that future revenues may decline."


Wrong again. Again.


You have to look at the totality of revenues, not just those from gate receipts.

oogie, do you want to make a bet as to which direction the Phillies' total revenue goes in the next 5 years?

This year is going to be a big year for minors as a group. Franco and Quinn will be the two I will be watching the most. Still think cozens might be a dark horse depending on what level they start him. Joe has been aggressive and this year will be interesting.

Again-- All I said was that the revenue projected (anticipated) may be less than Phils management thinks. Overall dollars may go up by say 6% this yr. and 4% next yr.. However, that may be LESS than the team expected based of the previous yrs of sellouts. I'm not arguing revenue goes up, just saying growth will be somewhat less if this team is a .500 team in 2013 and 2014.. Why is this concept of slow growth so hard to understand?

Regardless of next year and 2014's attendance/viewers, the Phillies will massively improve on their current TV deal of $24 million a year.

Therefore, revenue will go up significantly regardless.

oogie, your initial post on the matter stated:

"...ownership who knows future monies will be lessened."


Are you backing off from that statement?

You see, I'm not sure where you stand on this.

I'll give you my position:

Based on some of the TV deal that have been done in the last year (Dodgers, Rangers, etc.) the Phillies overall revenue is due for a huge spike when their next TV deal gets done.

They have the third highest total viewership in MLB(meaning the third highest number of people actually watching them), behind only the Yankees and Mets, are in the largest single market, and their ratings number (percentage of households) has been higher than every other team, even the two in NY (NYY and NYM total viewership is higher simply because of the awesome size of the market).

Even if their viewership declines somewhat, they are going to see a huge jump in their revenue just from the TV deal.

As NEPP pointed out in the previous thread, the Dodgers are going to have $50MM more in revenue just from their TV contract than their total payroll. I'm not sure the Phillies will hit that kind of number, but don't be suprised if the team's next TV contract spike total revenue by $75 - 100MM/year.

They won't be able to spend that on players because of the lux tax threshold, but it should allow them to compete without finances being a concern.

Ass-u-ming decent baseball decisions are being made (no guarantee with this FO), that bodes well for fans.

I'd bet we get around $150 million a year...based on what other large market clubs are getting and even being conservative.

oogie urbina - Gate receipts the next 2 years are the big X factor for the Phils. The new TV deal (almost certainly with Comcast) will probably almost double their current TV deal with them at a minimum to ~$50M/annually and probably add another $30-$40M to that. The issue is I would need to look back at how much of an equity stake the Phils actually own in Comcast Sports channel in Philly.

LA Dodgers deal is a poor comparison for several reasons. Better comps are the recent deals that the Astros and Rangers both struck.

http://www.forbes.com/pictures/mlh45if/2-houston-astros/

Basically even if there is a notable decline in gate revenues the next 2 years because the product on the field is underwhelming & people decide to spend their discretionary dollars in other ways especially the younger fans (under 30) who have flocked to CBP the last few years.

My bet is that the new Comcast deal should largely offset what is going to be a decent decline in gate revenues. Just makes for another less than stellar offseason next year ('13-'14) too from a spending standpoint with the committed contracts already for '14 with too many questions to have any kind of real sense on the '14-'15 offseason.

NY's market is so large they could easily support a 3rd MLB franchise and each team would still be in the largest market in baseball (dividing NYC's market into 3rd). Sure, they'd be nearly comparable to both LA franchises and both CHI franchises but they would still be the at the top.

Which is why they should move a team to NYC.

Days of the Phils being misers who spend under the MLB average though are over unless there are kind of real financial shenanigans by one of the limited partners (highly unlikely) or the team is sold & there is a huge debt service burden that team has.

It seems to me that if TV ratings take a significant hit, the upcoming TV deal will take a significant hit too. Sure the numbers are cartoonish in nature but 50 million is 50 million. The point being, like every other team that is or will be negotiating in the near future, the Phillies will be awash in cash. Just how much might not matter too much to us but you can bet Dangerous Dave and his posse sure as hell care.

The Angels are getting $150 million a year on their new deal and the Padres (one of the smallest markets in baseball and lowest viewerships) are getting $40 million on their new deal.

MG, a midpoint between the numbers you and NEPP presented is probably in the mix.

BTW, IIRC the Phillies surrendered their ownership position in the network years ago, in exchange for being able to sell all of the advertizing revenue.

Here's why LAD, TEX etc. have gotten such huge deals:

It's based on total number of subscribers - i.e. a monthly cap fee. Essentially, the cable providers payment to the team is based on how many people actually buy the service, not how many watch the games, because of the prestige and additional marketing opportunites that carrying 162 games of baseball provide.

Here' the rub: Comcast is no longer the only games in town. (We switched to Fios about 18 months ago). Is Verizon willing to invest the money into a new channel that they control in order to compete with Comcast? If they weigh the odds and say "yes" to that, it could create a bidding war for the Phils' deal that would probably make every MLB TV deal except for the Dodgers, Mets and Yankees(the latter two who have ownership in the networks) pale in comparison.

NEPP's number above would probably be the starting point if that were to happen.

I was reading an article about the Dodgers new TV deal and this line caught my intention:
TV rights are subject to revenue sharing, and high-revenue teams, including the Dodgers, have to share approximately one-third of their rights fees with low-revenue teams.
So there will be more money for the Phillies with the new TV deal but not as much as everyone thinks.

"Which is why they should move a team to NYC."


NEPP, I'm on record here saying the latest Dodgers' sale was a chance to move them back to Brooklyn.

They could have solved two problems by doing that, by also moving the attendance challenged A's to LA and occupy A's (nee Dodger) Stadium.

That would create a cross-town AL rivalry in SoCal, and reignite a cross-town NL rivalry in NY.

there would be a 200-foot monument of Selig erected in Brooklyn as the commish who brought back the Dodgers.

SFG would have the market to themselves (and be made to pay for it), the Mets (Wilpons) would get some vig out of the deal and help solve some of their Madoff created problems (heck, Fred Wilpon grew up a Dadgers' fan - they could have engineered a deal where he was the new owner of teh 'Brookly' Dodgers and they could find a new owner for the Mets), and MLB would have been the talked about sport for years.

The only losers in the whole deal would be LAD fans, but they're losers anyway - they show up later and leave early - so WGAS how they feel.

Reverend: please provide a link.

***TV rights are subject to revenue sharing, and high-revenue teams, including the Dodgers, have to share approximately one-third of their rights fees with low-revenue teams.***

So, if they are getting $280 Million a year, the Dodgers are keeping "only" $186 million of it for themselves. Add in the $50 million a year they get in national tv rights starting in 2014 (that's every MLB team getting the same amount) and they still get $236 million a year in television revenue. Incidentally, that's about what they'll end up paying in payroll costs this year once you factor in the luxury tax for first time offenders.

"It seems to me that if TV ratings take a significant hit, the upcoming TV deal will take a significant hit too."


I disagree, because the new deals being fashioned are being based on subscriber numbers, not ratings.

There is growing recognition that having the contract to broadcast all 162 games is a huge "anchor contract" to a network (similar to the concept of an anchor store in a retail mall). Ratings will rise ans fall based on how well teams do, and no team wins ALL the time. But having the subscriber base to when the ratings DO rise during winning seasons is all-important to cable operators, because that's the foundation of where they make money - on the subscriptions. (The fees they get from channel operators are based on the total number of subscribers.)

To wit, if Fios didn't carry CSN, I wouldn't be able to watch the Phils and we wouldn't have switched. OTOH, if Verizon does secure some kind of TV deal with the Phillies, then Comcast would have to pay Verizon for the right to broadcast those games over their cable lines (which is what happens in reverse now).

It's as much, if not more, about subscribers now as opposed to pure broadcast ratings.

I find it hard, and completely ridiculous, to try and use "Opening Day isn't sold out" to further the notion that revenues are down.

Anyone want to bet opening day won't be a sell out?

"I bet Amaro was told not to spend big money, or give out long-term deals."


Too bad he wasn't told that about 3 years ago.

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