As Rays Whiff, Front Office Scores

 

By ALAN SNEL asnel@tampatrib.com

Published: Apr 20, 2005

 

 

TAMPA - The Tampa Bay Devil Rays may have one of the worst records and lowest player payrolls in Major League Baseball, but their financial picture apparently is strong.

In fact, the team is among the most profitable teams in baseball, booking $27.2 million in operating income in 2004, according to new financial analysis by Forbes magazine.

 

The Rays had a higher operating income - earnings before interest, taxes, depreciation and amortization - than any other team in the major leagues last year except the Baltimore Orioles, according to an estimate published in the latest edition of the magazine. The Orioles, Forbes estimated, had operating income of $34 million. The Cleveland Indians matched the Rays at an estimated $27.2 million in operating income, Forbes said.

 

The rosy financial picture for the Rays, which drew an average turnstile crowd of 10,570 fans a game in 2004, was aided by a $20 million subsidy the team received under an MLB revenue-sharing program.

 

The Forbes analysis and ranking comes on the heels of Tampa Bay Devil Rays manager Lou Piniella and fans complaining that team management isn't spending enough to recruit top quality players. Its $29 million payroll is baseball's lowest.

 

``As a fan, I'd like to see every penny the team made go back into the team to get better players,'' said Rays fan Robert Szasz, a Clearwater land developer who is known for his loud heckling of opposition players at Tropicana Field.

 

``As a businessman, it's hard to say what they're doing with the money they're making. Maybe it's covering previous losses,'' Szasz said.

 

Vince Naimoli, the team's managing general partner, declined to comment Tuesday on the Forbes analysis and ranking. Devil Rays spokesman Rick Vaughn, though, said the magazine is historically inaccurate.

 

``It's recognized through baseball that those numbers are not accurate,'' Vaughn said.

 

The Rays have stumbled out of the blocks this season, posting a last-place 4-9 record going into Tuesday night's game against the New York Yankees in New York. On Monday night, the Yanks clobbered the Rays, 19-8.

 

The Yankees, with a league- high $206 million payroll in 2005, paid out $63 million for the revenue-sharing pool, money that was distributed to teams such as the Devil Rays, which booked an estimated $110 in revenue last season. Revenue-sharing is designed to allow small market teams such as the Rays and Milwaukee Brewers to compete with big market teams that have more revenue to work with.

 

``The goal of revenue-sharing is to improve competitiveness. But if you don't spend the money, then it enriches the owners,'' said Allen Sanderson, an economics professor at the University of Chicago who specializes in sports business issues. ``That's one of the dangers. I'd prefer some kind of minimum payroll.''

 

Some fans, such as St. Petersburg resident Tom Chuparkoff, who got into a well- publicized verbal tiff with Naimoli after Saturday's game, believe Naimoli is pocketing profits before he yields control to general partner Stuart Sternberg. Sternberg, a retired managing director at the investment firm Goldman Sachs, led a group of investors who bought 49 percent of the team for $65 million last year.

 

Naimoli declined to comment Tuesday on the Forbes analysis and ranking.

 

The magazine does not have access to the Rays' or any other team's financial records. It uses typical revenue generators such as ticket sales, broadcast revenue and venue income and expenditures such as player salaries and stadium lease agreements to estimate what teams book on their balance sheets.

 

The Rays had revenue of $110 million for 2004 - more than a half-dozen other teams, including the Florida Marlins, Forbes said. While the Marlins had $7 million less revenue for 2004, their payroll is double the Rays' in 2005, the magazine said.

Out of 30 teams, the Rays - despite their top ranking for operating income in 2004 - ranked last in team value at $176 million, Forbes said. The Yankees have the highest valuation: $950 million.

 

This is a shock to me. My jaw literally dropped when I read this. Poor fans.

Looks like they are doing the same basic things the Clippers do.

Although I'm shocked how much they're making, this just adds more fuel to the fire that their owner is a cheap bastard that doesn't spread his money around except from his left to his right pocket :plain

this is just wrong. no team should be able to get 20 millions back from the league and sit on it.

They are expected to be getting a new ownership/management group sometime in 2006. Sternberg should be ready to take over by then.

This means the Marlins generated $103 million in revenue last year. Payroll was, what, like $55 million? Add in $40 million in operating expenses and we have ourselves... $8 million profit. Does this sound right?

``As a businessman, it's hard to say what they're doing with the money they're making. Maybe it's covering previous losses,'' Szasz said.

bingo.

This means the Marlins generated $103 million in revenue last year. Payroll was, what, like $55 million? Add in $40 million in operating expenses and we have ourselves... $8 million profit. Does this sound right?

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Maybe that includes revenue sharing dollars.

many low payroll teams in the big 3 turn a profit with all the revenue sharing these days.

many low payroll teams in the big 3 turn a profit with all the revenue sharing these days.

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That and they're cheap and don't spend any money on their teams.