14 March 2005

The A's and Revenue Sharing

It looks like this season the A's will be the recipients of a handsome revenue sharing windfall:

Unlike the NFL, baseball might not share all of its revenue. But the 300 million bucks a year it does share now are having a major effect....The A's, according to sources, will get about $19 million.

Now before anyone starts jumping up and down screaming "We won the lottery!" it's important to understand what that revenue sharing figure means in the grand scheme of things. According to the Major League Agreement, all thirty teams have to share a third of their locally-generated revenues (tickets, ads, local TV/radio). The money is then pooled and split 30 ways. So if the A's paid in $15 million (1/3 of a rough estimate of $45 million in local revenue) and got back $34 million, their revenue sharing rebate is $19 million. If Jayson Stark is right about the following:
And that doesn't even include the $20 million or so each team collects in national TV money. Or the $4 million they're about to get from the new XM radio deal. Or the $6 million to $8 million each team gets from the swelling central fund.

... then the A's should have gotten well over $100 million in revenue for 2004 when merchandise sales and other national streams are included. That makes sense considering the A's pulled $110 million in 2003 according to Forbes. Remove about $40 million in infrastructure costs such as player development, front office costs, rent on the stadium and spring training facilities, and the team's left with $60-70. Most of that will go to players. Some of it may end up becoming a small profit for the ownership group. Chances are that the payroll and revenue will remain the same or dip slightly for 2005, and the cycle will continue.