Originally posted on isportsweb.com  |  Last updated 2/14/14
Follow me on Twitter @jim_krug Some visual aides to help fans of the Pittsburgh Pirates come to terms with an utterly disheartening offseason… You might not know Pirates’ Inside Sales Representative Kyle G., but I do.  I know Kyle well.  Ever since I bought two Wild Card game tickets in October, Kyle has been e-mailing me once or twice a month to tell me about all of the GREAT season ticket opportunities that the Pirates are offering me personally this year! I even got one phone call from the Pirates about buying season tickets.  It was interesting that they were more than willing to tell me tons of positive things about the team, but when I asked why the Pirates did not give a qualifying offer to SP A.J. Burnett, and spent hardly anything on free agency, I was told that they were “not allowed to comment on team matters.” Anywho, I’ve gotten at least 4x more sales inquiries about buying season tickets plans than the Pirates have signed actual free agents this offseason.  (SP Edinson Volquez, 5.71 ERA, 60 ERA+ in 2013, and SS Clint Barmes, .558 OPS, 58 OPS+ in 2014, if you’re keeping track at home.)  Can’t wait to hear from you in March, Kyle!   At right, we can see how dire the Pirates’ payroll situation has become.  Long promised “competitive payrolls”, Pirates’ fans- fresh off the bliss of the team’s first winning season in 21 years- must stomach a 2014 payroll that looks to be 28th in all of Major League Baseball.  Also note how all of the “small market” clubs that Pirates’ ownership and management conveniently compare themselves to are all now above the Pirates in payroll.   Clearly, this is not the type of company the Pirates or their fans should want to keep.  As you can see at left, both the Houston Astros and Miami Marlins lost 100 or more games in 2013- usually a watermark for competitive futility. And unlike the Pirates, both are in the full-blown stages of franchise facelifts, as the Astros and Marlins have sold off nearly all pricey veteran talent, and are attempting to rebuild with a glut of young, cheap, cost-controlled players and prospects.  One would not expect these franchisesto have high payrolls at this stage of their rebuilds. In contrast, the Pirates are coming off of a 94-win season, which was the 5th highest win tally in MLB in 2013.  One of these teams is not like the others. At right, a slightly varied representation shows that the Pirates are once again in the minutest of minorities when it comes to total MLB spending.  The 2013-2014 offseason has seen an unprecedented infusion of cash, largely courtesy of two massive FOX and ESPN TV contracts that both kick in this season. Teams have taken advantage of the $25MM divvied out to each, helping fuel payroll increases for 28 of the 30 franchises. The only teams that have decreased payroll?  The New York Yankees and the Pittsburgh Pirates.  And obviously, one must take the Yankees’ “decrease” with a grain of salt, as their ownership has dished out around half a BILLION dollars in free agent contracts in this offseason alone.  Simply put, the Pirates have been given more money than ever, but are spending less still. . Here, we have some profit projections over a 2-year period for the Pirates.  Keep in mind, MLB profits are kept closely guarded by their teams, although every now and then, fans are treated to a delicious information leak- like the MLB financial document expose from Deadspin in 2010. As mentioned in previous articles, Forbes Magazine cited a $26.8MM profit for the Pirates in 2013.  MLB writer John Perrotto recently projected a $40MM profit for the Pirates this coming season, although it’s unclear whether Perrotto factored in the $25MM new TV money, or the current $15MM difference between the Pirates’ 2013 Opening Day roster (~$79MM) vs. the current 2014 team (~$64MM). Club President Frank Coonelly has drawn heat from Pirates’ fans in the past, for stating that attendance must improve before payroll does.  This notion is counterintuitive to every aspect of running a competitive professional sports franchise. Yet still, despite many lean years, the fans have kept their promise!  As you can see at right, attendance has increased steadily over the past 5 seasons, and is up 40% from 2009 to 2013! . Unfortunately, Pirates’ ownership has not kept up their end of the bargain.  The past 4 seasons featured slowly growing payrolls that were always mired in the bottom third of the league, but this year has broken the trend with a clear decrease in payroll! Barring any significant free agent additions during Spring Training, the Pirates as currently constructed look to defend their 2013 playoff appearance and Wild Card victory with a payroll around $15,000,000 lower than the 2013 team. So, just to be clear on the bigger picture here… 1.  The Pirates have more fan commitment than ever 2.  The Pirates are being given more money than ever 3.  The Pirates are defending their first winning season and playoff appearance in 21 years …and for some reason, payroll has gone down.   But here is where the numbers get really shocking.  Folks, if you have any small children with you in the room at this point, I would hastily usher them out before reading on. At right, we have the purported franchise value of the Pittsburgh Pirates.  At the far right, you can see bars representing the ~$30MM (if you’re counting actual cash paid) to ~$90MM (if you’re including old ownership debt) paid by the McClatchy-Nutting group in 1996 to purchase the team. In fairness, there would be substantial inflation over the past 18 years, and had the group not bought the team, perhaps we aren’t debating the Pittsburgh Pirates at all!  But now check out the bars on the left of the graph.  Prior to their historic 2013 season, Forbes Magazine valued the Pirates at $479MM.  Clearly, a season of serious contention vaulted the Pirates to a new financial level, as Bloomberg LP pegged the franchises value at a whopping $610MM in October! That would be an increase in value of somewhere around $130,000,000 in one season alone, and an eye-popping $580,000,000 increase over the initial $30,000,000 cash outlay for the team.  Is this really an organization that should self-saddle its payroll to the bottom 3 teams in the league? Ah, what offseason update wouldn’t be complete without some Frank Coonelly shenanigans?  I’ve covered the team’s President many times before, and it’s not like I set out to do so.  Coonelly just can’t help making headlines with quotes to the media that obviously contradict actual established facts. At left, we essentially have the Cliffs’ Notes version of the Club President’s offseason of franchise spin control. Fans and the media alike are still waiting on clarification to back up Coonelly’s very questionable claims about the value of the ROOT Sports TV contract.  And even if Coonelly actually is right, and the Pirates DO have a local TV deal vaulting them into the top third of baseball… …wouldn’t that be even more money that the Pirates could put towards a competitive payroll? Until Pirates fans and the media alike take a public stand against these financial shenanigans, the Pirates’ self-imposed payroll doldrums- and staggering bottom-line profits- will continue.  Thanks for reading.
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