Once again Forbes Magazine has released its MLB team valuations, once again they make the Padres look pretty bad, once again (probably) the team will deny Forbes’ accuracy, and once again I’ll sit with a confused look on my face trying to figure out where the truth is.
Despite a modest payroll relative to years previous and teams in similar markets, Forbes reports the team’s operating income (defined as earnings before interest, taxes, depreciation and amortization) at $29.9 million, good for third largest among all of MLB. This is likely to raise questions from fans about current payroll levels and why the gosh danged heck the team saw Jason Marquis as the only suitable free agent acquisition this offseason.
Of course Forbes is in the business of attracting attention, page views and ad / subscriber revenue. From that perspective, publishing any numbers that merely appear accurate might get the job done for those goals. On the other hand, should they ever get caught fudging and / or inventing they would lose all credibility, which in turn would cost a ton in terms of that delicious subscriber base and ad revenue.
The Padres on the other hand are in the business of memory making, or, selling tickets and broadcasting rights (mostly) for access to those memories. Their job is to convince fans they’re doing everything they can to create fun, which for most people involves winning baseball games. Fans tend not to like spending money that doesn’t contribute towards that goal.
The Padres will likely refute the numbers, as they have in years past, and us fans will be stuck with more questions than answers. The problem is that while both sides make lots of claims, neither is willing to actually show their work.
Got a handful of stacks, better grab an umbrella
The Padres “stand out” in another category of the Forbes numbers, their Debt/Value %, defined by Forbes to include stadium debt. It shows the team at 50% D/V, which is third highest among Major League Baseball teams. And while I majored in business, I’m not qualified to explain what that all means aside from probably not good.
The team’s reported debt has me thinking–the Padres aren’t the only small-mid market team in a new-ish stadium. Why is their debt / value so much larger than say, the Reds? A large part of that has to do with stadium debt, and while I am somewhat vaguely aware that the Padres are responsible for $153 million of Petco Park’s $457 million total cost, I’m not all that sure sure what kind of context to put that in. So I set a browser tab or two to Ballparks.com and Wikipedia (the references section, as any college student knows) to find out.
These are in millions:
|Cincinnati||$22.5 ($2.5/year)||280 + $45 naming rights||$320|
|Washington, DC||$165 (5.5/year)||everything else, apparently||$610|
|City||Percentage Paid By Team|
|San Francisco||complicated, but 0% from public|
Before I get to talking about the numbers, I need to point out this isn’t any kind of grand research project. It’s merely an attempt to make some sense of the Padres’ stadium debt relative to other teams, so if anyone has insight into these numbers I’m all ears. There were a couple places where Wikipedia’s numbers were slightly different than Ballparks.com, so I did my best. Also keep in mind that these numbers are not region or inflation adjusted, so the most important is the percentage of the park paid for by the team since that’s not affected by inflation.
While doing this research, one thing immediately became clear: comparing stadium monies across different deals is tough. San Francisco, Cincinnati, Washington DC were all complex, with Pittsburgh’s deal being the worst since it combined a stadium for the Steelers, a new convention center, and a bunch of other crap into one huge project.
Another lesson: these deals tend to vary a lot. When I started I expected a variance closer to 10%-20%, but some cities got great deals (Detroit, San Francisco) while others essentially handed private businesses a free stadium courtesy of taxpayers (Cincinnati).
The Padres fared near the middle, but the higher end of the middle. So after all that, we gain some context into the varying structures of these deals and where the Padres fit in, but it doesn’t help much with the question of why Forbes might report their Debt/Value % so high compared to other teams. Oh well. Enjoy this gif: