Pirates Profits at $35.3 Million...Room to Increase Payroll?

[Roberto218]

Forbes estimates Bucs profits at $35.3 million. Is it reasonable for fans to request a $15-20 million increase in payroll for 2017? Resign Nova? Bolster the bullpen? Consider a Cutch extension? Going into negotiations for a new TV deal, it's a good time to invest in success.

[rucker59@gmail.com]

I'd think that $25M-$30 would be more appropriate. Imagine Neal with $130M to work work.



Does anybody know whether Mr Nutting receives a salary?

[Roberto218]

I am good with your suggestion. Steve Philips said on MLB radio that when he was the Mets GM, they budgeted to break even. No need for a salary with Bucs increase in value, and especially if Pirates pay portion of profits as a dividend.

[Tintin]

576A676077716A37343D050 wrote: Forbes estimates Bucs profits at $35.3 million. Is it reasonable for fans to request a $15-20 million increase in payroll for 2017? Resign Nova? Bolster the bullpen? Consider a Cutch extension? Going into negotiations for a new TV deal, it's a good time to invest in success.




Forbes is estimating and have been proven wrong in the past. I see the Pirates making about 10-15 million a year.

[Roberto218]

Forbes could only be proven if the Bucs open up their books....not going to happen! Forbes has 95% degree of certainty of being within $5 million on profits. Baseball is a very profitable business. The question posed to Bob Nutting is an obvious one: will you accept a 50% reduction in profits in order to double the Bucs' possibility of winning the World Series from 1 in 30 to 1 in 15? Keep in mind that if increase spending works, your profits will rebound.

[Tintin]

5A676A6D7A7C673A3930080 wrote: Forbes could only be proven if the Bucs open up their books....not going to happen! Forbes has 95% degree of certainty of being within $5 million on profits. Baseball is a very profitable business. The question posed to Bob Nutting is an obvious one: will you accept a 50% reduction in profits in order to double the Bucs' possibility of winning the World Series from 1 in 30 to 1 in 15? Keep in mind that if increase spending works, your profits will rebound.




It did happen. A few years back. Stuff was leaked.

[SammyKhalifa]

7A474A4D5A5C471A1910280 wrote: Forbes could only be proven if the Bucs open up their books....not going to happen! Forbes has 95% degree of certainty of being within $5 million on profits. Baseball is a very profitable business. The question posed to Bob Nutting is an obvious one: will you accept a 50% reduction in profits in order to double the Bucs' possibility of winning the World Series from 1 in 30 to 1 in 15? Keep in mind that if increase spending works, your profits will rebound.


To be fair, I'm not going to open MY books either.  And I'm sure neither will you, or any company that doesn't have to. 



I'm not even going to tell any of you how much cash is in my wallet.

[OrlandoMerced]

I wouldn't be surprised if those figures are very close. My theory on the Pirates is that their financial decisions are based less on bottom line profits and more on looking for moneyball ways to extract value. I think they trust their methods of analyzing player value and can see when a market is on a bull run.



I think a test for this hypothesis will be when we see how the Pirates spend money in the international market this season (assuming the new rules go into place for this signing period). When MLB broke it's International Signing phase with that terrible incentive system that led teams to spending massive amounts in a given year because of the way the penalties were designed, the Pirates just sat out that talent acquisition phase. The teams that wanted to bust their spending cap would bid massively for the top players, that didn't make the top players better investments, just more expensive.



So now that there's the hard cap, and the Pirates are a team that faces no penalties, they should spend more. If the Pirates don't compete for top prospects, or use only a fraction of their bonus pool, then I would eat crow.

[PirateGold]

7E43445E43442A0 wrote:

Forbes is estimating and have been proven wrong in the past.  I see the Pirates making about 10-15 million a year.


It's been almost a year since I had the discussion with WTM on here about the Forbes estimates. Actually, it wasn't much of a discussion. After I showed him to be fully incorrect, he never responded to me, IIRC.



The only data that we have to compare the Forbes estimates are from the seasons in which the Pirates financial data was leaked and published on Deadspin.



Last year, WTM espoused the same non-truth that you have written above. The Forbes numbers from the leaked data era were actually VERY accurate. How this nonsense about the Forbes data being proven wrong continues to circulate boggles my mind. Here's how the conversation went down last December (thanks to the wayback machine for having the page archived).



https://web.archive.org/web/20151221083 ... ic=15183.0





WTM's comment

the leaked documents posted at Deadspin showed that Forbes' estimates of the Pirates' profits in those years were not at all accurate.



My response

That statement is not accurate at all. Forbes, in fact, was very accurate. Here are the numbers...



The leaked documents from Deadspin compared to Forbes info from the same years show the following:

Total Revenue

2008 leaked document - $146 million

Forbes 2008 estimate - $144 million

2007 leaked document - $139 million

Forbes 2007 estimate - $139 million



Operating Income (EBITDA) - combined in 2007 and 2008, Forbes actually UNDERESTIMATED the Pirates operating income. They didn't grossly overstate it.

2008 leaked document - $21.8 million

Forbes 2008 estimate - $15.9 million

2007 leaked document - $16.2 million

Forbes 2007 estimate - $17.6 million



Net Income

2008 leaked document - $14.4 million

2007 leaked document - $15.0 million



Forbes estimates were almost spot on regarding revenue and were very close (and actually an underestimate rather than an overestimate) regarding operating income. What Forbes doesn't attempt to do is to calculate net income, which is after taxes, amortization, depreciation, etc. The Pirates own document showed they made $29.4 million in 2007 and 2008 combined. And, in the aftermath of the documents being leaked, the Pirates not only confirmed the info in the leaked documents, but also opened their books for 2009, which showed net income of $5.4 million (http://www.post-gazette.com/sports/pira ... 1008230230).



There is public misconception about how accurate the Forbes info is or at least was back in leaked document time frame. Hopefully this will clear it up. I'm sure there are a lot of things that have changed since 2007 and 2008, but the numbers from Forbes from that era are very much in line with what the Pirates own information reported. To say that the leak published at Deadspin "showed that Forbes' estimates of the Pirates' profits in those years were not at all accurate" is false.

[Ecbucs]

1D2F23233705262F2227282F4E0 wrote: Forbes could only be proven if the Bucs open up their books....not going to happen! Forbes has 95% degree of certainty of being within $5 million on profits. Baseball is a very profitable business. The question posed to Bob Nutting is an obvious one: will you accept a 50% reduction in profits in order to double the Bucs' possibility of winning the World Series from 1 in 30 to 1 in 15? Keep in mind that if increase spending works, your profits will rebound.


To be fair, I'm not going to open MY books either.  And I'm sure neither will you, or any company that doesn't have to. 



I'm not even going to tell any of you how much cash is in my wallet. 


ahh, so you do carry cash in your wallet.